On Sept. 18, 2026, the U.S. Department of Justice announced updates to Justice Manual provisions governing False Claims Act (FCA) litigation. The updates (1) limit the use of nonbinding agency guidance to establish FCA liability and (2) require DOJ attorneys to assess whether the government’s interests warrant dismissal “in each case” at the time the agency decides to decline to intervene in the case. The prior version of the Justice Manual did not mandate that DOJ attorneys make that assessment at the time the agency declined to intervene.
According to DOJ, the updates reinstate aspects of guidance issued during the first Trump administration to “help ensure the Department uses its enforcement authority fairly and effectively—holding fraudsters accountable for violations of binding legal or contractual obligations while seeking dismissal of meritless qui tam actions that waste taxpayer resources and impose unjustified burdens on businesses.”
Although it remains to be seen how DOJ will implement these updates, the changes may provide organizations and individuals facing FCA exposure with additional grounds for urging the government to decline to intervene in—or seek dismissal of—those matters.
The First Update: Limited Authority of Sub-Regulatory Guidance
The Department’s approach to sub-regulatory guidance has shifted across administrations. The recent update to Section 1-19.000 of the Justice Manual, which sets forth DOJ’s internal policies and procedures, “reinstates and builds upon the Department’s 2017 policy that sub-regulatory guidance cannot impose legal obligations beyond those established by statute or regulation.” The Biden administration rescinded the 2017 policy, and the second Trump administration reinstated it in 2025.
Under the revised policy, the Department will pursue civil or criminal liability—including under the FCA—only for violations of binding legal or contractual obligations. DOJ therefore will not base an enforcement action solely on alleged noncompliance with sub-regulatory guidance documents, such as agency letters, bulletins, manuals, and similar materials meant to provide information about statutes or regulations. As DOJ explains, “guidance documents cannot by themselves create binding requirements that do not already exist by statute or regulation.”
The Justice Manual nevertheless preserves DOJ’s ability to seek to use guidance documents in FCA litigation for other permissible purposes, including as evidence of knowledge or an applicable professional standard. When a guidance document describes a relevant statute or regulation, DOJ asserts that it may use a party’s awareness of the guidance document and its contents as evidence that the party had the requisite scienter, notice, or knowledge of the statute or regulation.
The Justice Manual notes that the DOJ’s position is that other permissible uses of guidance documents include (1) establishing the professional or industry standards applicable to a party’s conduct; (2) assessing whether an action or opinion is consistent with generally accepted scientific or technical processes; and (3) addressing claims in which compliance with agency guidance is itself relevant (e.g., if a party falsely certifies compliance with a guidance document). Thus, although DOJ’s recent guidance may preclude the use of sub-regulatory guidance as an independent basis for liability, such guidance may continue to play an evidentiary role in FCA litigation.
For example, in FCA cases involving healthcare claims, DOJ may cite sub-regulatory materials such as the Medicare Benefit Policy Manual or Local Coverage Determinations as evidence of whether billed services were medically reasonable and necessary. The revised Justice Manual cautions, however, that such use does not create a presumption that the guidance in those materials correctly states the applicable professional or industry standard. Rather, a party remains free to contest or rebut the standard articulated in the guidance through other evidence.
The Second Update: Required Review of Declined Qui Tam Actions
DOJ also revised Section 4-4.111 of the Justice Manual to clarify the agency’s statutory authority to seek dismissal of qui tam actions. Historically, DOJ has exercised dismissal authority relatively sparingly—though in the past few years, dismissals are trending upward.
DOJ has emphasized that meritless qui tam actions sometimes consume substantial government resources and impose burdens on private parties. Earlier this year, Deputy Assistant Attorney General Brenna Jenny stated that DOJ would not be “reluctant to exercise its authority to dismiss” FCA cases and was “committed to doing so where cases are proven to be meritless or inconsistent with current law and where the allegedly defrauded agency does not support the case.”
In turn, the revised provision now requires DOJ attorneys to evaluate dismissal of a qui tam action “in each case” in which the agency declines to intervene. If DOJ does not seek dismissal at the time of declination, agency attorneys may reassess whether dismissal is warranted as the litigation progresses. The Justice Manual provides that DOJ may seek to dismiss a declined qui tam action to:
- Curb meritless qui tam actions;
- Prevent parasitic or opportunistic actions that duplicate an existing government investigation without contributing useful information to the investigation;
- Prevent interference with agency policies or program administration;
- Protect DOJ’s prerogatives in litigation brought on behalf of the United States;
- Safeguard classified information and national security interests;
- Preserve government resources, particularly when the government’s anticipated costs are likely to exceed any expected recovery; and
- Address egregious procedural errors that could frustrate the government’s efforts to conduct a proper investigation.
Potential Implications of The FCA’s Enforcement Reforms
The recent updates reflect DOJ’s continued commitment to FCA enforcement while refining the policies that guide its enforcement decisions. At the same time, the updates may create additional opportunities for companies and individuals facing FCA scrutiny — particularly those in highly regulated industries like healthcare, government contracting, education, financial services, and international trade — to engage with DOJ earlier and more strategically.
Where allegations depend primarily on nonbinding agency guidance, defendants may argue that the asserted obligations lack a sufficient statutory, regulatory, or contractual foundation. DOJ may still seek to rely on that guidance as evidence of scienter, notice, industry standards, or materiality. However, even when guidance is used for a permissible purpose, the Justice Manual cautions that its use does not create a presumption that the guidance correctly states the relevant standard, leaving defendants free to contest or rebut it.
The distinction between binding legal or contractual requirements—including requirements that incorporate agency guidance by reference—and voluntary adherence to nonbinding guidance may be relevant for companies assessing their compliance obligations. Identifying the source and legal status of each compliance obligation may help companies allocate compliance resources, assess potential FCA exposure, and respond effectively to government inquiries or enforcement actions.
In declined qui tam cases, defendants may also have stronger grounds to present DOJ with a focused dismissal request addressing the factors identified in the Justice Manual, including legal or factual deficiencies, interference with agency policy, litigation burdens, and the government’s likely costs relative to any anticipated recovery. Because DOJ attorneys must reassess dismissal as litigation progresses, these advocacy opportunities may continue beyond the initial intervention decision, particularly as discovery develops and the burdens or weaknesses of a relator’s claims become clearer.
The practical effect of these reforms will depend on how DOJ applies them. Companies and individuals facing FCA scrutiny should consider both policies from the earliest stages of an investigation or declined qui tam action and may wish to assess whether focused engagement with DOJ could narrow or resolve the matter.