The Department of Justice has clarified two prior memos suggesting less enforcement of False Claims Act cases. One – the “Granston” memo – encouraged federal prosecutors to actively oppose FCA cases brought by whistleblowers that the government views as weak. Another – the “Brand” memo – instructed federal prosecutors not to use “agency guidance” as a basis for proving a violation of law.
In a recent speech at the Federal Bar Association, Deputy Assistant Attorney General Stephen Cox clarified that qui tam cases will continue play an important role in FCA enforcement. Although the government only chooses to participate (or intervene) in 1 of 5 whistleblower cases, it will seek to dismiss these cases only if “the underlying factual or legal theories clearly lack merit.”
Cox also said that while the regulatory process is slow and cumbersome, “sometimes agencies have used guidance as a short-cut to effectively make new rules” without following the proper rulemaking procedures. He added that although agency guidance may serve to educate the public concerning certain regulatory requirements, it is not legally binding unless formally adopted as law or regulation.
