DOJ Just Changed Its False Claims Act Enforcement Playbook
For years, businesses that deal with federal agencies have faced a familiar compliance problem: the binding rule may be in a statute, regulation, or contract, while the practical instructions live in manuals, FAQs, bulletins, policy statements, and technical guidance. When a False Claims Act case follows, the line between the two can become critical.
On September 18, 2026, the U.S. Department of Justice (DOJ) revised the Justice Manual in two areas that directly affect False Claims Act enforcement. First, DOJ restored and expanded limits on using sub-regulatory guidance as the basis for enforcement. Second, DOJ instructed its attorneys to assess whether declined whistleblower cases should be dismissed and to revisit that question as litigation develops. DOJ announced the revisions here.
This is not an amendment to the False Claims Act (FCA), and it is not a signal that federal fraud enforcement is going away. It is an internal enforcement-policy change that tells DOJ lawyers how to analyze two recurring questions: what counts as a binding obligation, and when the government should allow a private qui tam case to continue in its name.
For companies that sell to the government, bill federal programs, receive grants, or make certifications tied to federal money, those distinctions deserve attention now.
What DOJ Changed in False Claims Act Enforcement
1. Agency Guidance Cannot Create a Legal Duty by Itself
The revised Justice Manual states that criminal and civil enforcement actions must be based on violations of applicable legal requirements, not merely on noncompliance with agency guidance. DOJ attorneys are instructed not to treat a guidance document as if it independently created a binding requirement that does not already exist in a statute or regulation. Justice Manual §§ 1-19.200 through 1-19.260.
That sounds straightforward, but there is an important qualification: guidance is not irrelevant.
The revised policy expressly permits DOJ to use guidance for legitimate evidentiary purposes. Depending on the facts, guidance may be relevant to scienter, notice, knowledge, professional or industry standards, scientific or technical processes, a false certification, or the factual context of a case. The Manual also makes clear that if a government contract or provider agreement requires compliance with particular agency guidance, the obligation comes from the contract or agreement. In that circumstance, the guidance can become highly relevant because the binding contract incorporated it.
That distinction is especially important for government contractors. Earlier this month, for example, DOJ announced a False Claims Act settlement with Honeywell Aerospace involving allegations that the company failed to comply with NIST SP 800-171 cybersecurity requirements where those requirements were imposed through a Department of Defense contract and regulation. The settlement allegations illustrate the difference between a technical standard existing in the abstract and a contractual obligation requiring compliance with that standard. DOJ's Honeywell settlement announcement is available here.
2. DOJ Attorneys Must Assess Whether Declined Qui Tam Cases Should Be Dismissed
The second change concerns qui tam litigation. Under the FCA, a private whistleblower, known as a relator, may bring an action on behalf of the United States. DOJ may intervene and take over the case, or it may decline intervention and allow the relator to continue litigating. 31 U.S.C. § 3730 sets out that framework.
The revised Justice Manual now says that when DOJ is evaluating a recommendation to decline intervention, its attorneys will assess whether the government's interests would be served by seeking dismissal under 31 U.S.C. § 3730(c)(2)(A). If DOJ does not seek dismissal at that point, it may revisit the issue later as the case develops. Justice Manual § 4-4.111.
Importantly, DOJ also says that a decision not to intervene does not necessarily mean the case is meritless. The government may simply have investigated far enough to decide that intervention is not the best use of its resources.
The revised Manual identifies seven non-exclusive grounds that may support dismissal:
curbing meritless qui tam cases;
preventing parasitic or opportunistic cases that duplicate an existing government investigation without adding useful information;
preventing interference with an agency's policies or administration of its programs;
protecting DOJ's control over litigation brought in the name of the United States;
safeguarding classified information and national-security interests;
preserving government resources where the expected costs outweigh the likely benefit; and
addressing serious procedural errors that could interfere with a proper government investigation.
The dismissal authority itself is not new. The FCA already permits the government to seek dismissal over a relator's objection, subject to the statute's procedural protections. In United States ex rel. Polansky v. Executive Health Resources, Inc., the Supreme Court held that the government may seek dismissal even later in a qui tam case after intervening, with Federal Rule of Civil Procedure 41 supplying the governing dismissal standard. United States ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419 (2023).
What the DOJ Revisions Do Not Change
The most important point for businesses is what the new policy does not do.
It does not rewrite the False Claims Act. It does not eliminate qui tam suits. It does not convert a DOJ declination into a dismissal. And it does not make agency guidance meaningless.
A relator may still continue a case after DOJ declines intervention. DOJ may still use guidance as evidence where legally appropriate. A contract can still incorporate technical standards or agency requirements. A false certification of compliance can still create serious exposure when the certification is material to payment and the other FCA elements are satisfied.
In short, the new policy draws a sharper line between a legal obligation and evidence relating to that obligation. That is a useful distinction, but it is not a safe harbor.
False Claims Act Enforcement Is Not Being Scaled Back
The numbers make that clear. DOJ reported more than $6.8 billion in False Claims Act settlements and judgments for fiscal year 2025, the highest single-year total in the statute's history. Whistleblowers filed 1,297 qui tam actions, also a record. DOJ reported that FCA settlements and judgments since 1986 now exceed $85 billion. DOJ's fiscal year 2025 FCA statistics are available here.
The September 18 revisions therefore should be read as a change in enforcement discipline, not a retreat from enforcement. DOJ is telling its lawyers to focus on violations of binding obligations and to consider ending declined qui tam cases that do not advance the interests of the United States.
That fits with DOJ's broader fraud-enforcement expansion discussed in my earlier article, DOJ Fraud Enforcement Is Expanding: What Businesses Should Do Now.
Why Contract Language and Certifications Deserve a Fresh Review
One of the most practical consequences of the new guidance policy is that contract language becomes even more important.
A manual, technical standard, agency FAQ, or policy document may not independently create a legal duty. But if a federal contract incorporates that document by reference, requires compliance with it, or requires the contractor to certify compliance with it, the analysis changes.
Businesses should therefore know exactly which obligations arise from statutes and regulations, which arise from contracts and commercial agreements, and which documents are merely advisory. Those categories often get blurred operationally, particularly when procurement, information technology, compliance, and legal personnel are working from different sets of requirements.
The same is true for certifications. A routine checkbox, invoice representation, cybersecurity attestation, cost certification, eligibility statement, or compliance certification can become much more significant when payment depends on its accuracy.
General Counsel should be asking a basic question before a certification is made: what, exactly, are we certifying, and where does that obligation come from?
What General Counsel Should Do Now
For companies exposed to federal contracting, reimbursement, grant, or program requirements, the September 18 revisions justify a focused compliance review rather than a wholesale rewrite of existing programs.
Build an obligation map. Separate requirements imposed by statute, regulation, contract, certification, agency guidance, technical standards, and internal company policy.
Review incorporation-by-reference provisions. Determine whether contracts or provider agreements transform otherwise nonbinding guidance or technical standards into contractual duties.
Audit certifications and attestations. Confirm that the company can substantiate representations made in bids, invoices, reimbursement requests, cybersecurity attestations, grant submissions, and other requests for government money.
Escalate known gaps before they become claims. A compliance problem is easier to address before a certification, invoice, or payment request creates a potential FCA issue. Internal investigation and compliance review can help determine what happened, what obligations actually apply, and what remediation is appropriate.
Do not treat DOJ declination as an automatic victory. A relator may continue litigating after the government declines to intervene. The new policy may create a stronger basis for DOJ to evaluate dismissal in appropriate cases, but dismissal remains case-specific.
Review disclosure and remediation strategy. DOJ's existing FCA policy continues to provide potential cooperation credit for timely voluntary disclosure, meaningful cooperation, and effective remediation. See Justice Manual § 4-4.112.
Do not ignore state exposure. The Justice Manual governs federal DOJ attorneys. It does not rewrite state false-claims statutes or state enforcement policy.
Federal Policy Does Not Eliminate State False Claims Risk
Businesses dealing with state and local government funds should analyze that exposure separately.
New York, for example, has its own False Claims Act in Article 13 of the State Finance Law, §§ 187 through 194. New York False Claims Act, State Finance Law § 187. The federal Justice Manual revisions do not control how the New York Attorney General or other state and local enforcement authorities apply their own laws.
For multistate businesses, government contractors, healthcare organizations, and companies receiving public funds, that means the compliance analysis cannot stop with federal DOJ policy.
The Practical Takeaway
DOJ has drawn a clearer line, but not a simpler one.
Agency guidance cannot create a binding legal obligation merely because an agency published it. At the same time, guidance can still be powerful evidence, and a contract or certification can give that guidance legal significance. DOJ is also directing its lawyers to take a more deliberate look at whether weak or counterproductive declined qui tam cases should continue in the government's name.
For businesses, the best response is not less compliance. It is more precise compliance.
Know which obligations are binding. Know where they come from. Know what the company is certifying. Know what its contracts incorporate. And when a potential problem surfaces, determine the legal and factual landscape before the issue becomes a government claim or whistleblower case.
For companies without a full-time in-house legal department, an experienced Fractional General Counsel/Outside General Counsel can help connect contracts, compliance, investigations, management decisions, and outside specialists before those issues become disconnected risk.
About Todd B. Nurick
Todd B. Nurick is a Pennsylvania and New York business attorney with approximately 30 years of experience advising businesses on contracts, transactions, corporate governance, investigations, compliance, employment-related business issues, risk management, and disputes. Through the Law Office of Todd B. Nurick, he also serves businesses as Fractional General Counsel/Outside General Counsel, providing experienced legal oversight without requiring a full-time in-house legal department.
Sources
U.S. Department of Justice, DOJ Revises Justice Manual to Strengthen False Claims Act Enforcement, Sept. 18, 2026. DOJ source
U.S. Department of Justice, Justice Manual § 1-19.000, Limitations on Issuance and Use of Guidance Documents. Justice Manual source
U.S. Department of Justice, Justice Manual §§ 4-4.110 through 4-4.112, Civil Fraud Litigation and Qui Tam Dismissal. Justice Manual source
31 U.S.C. § 3730, Civil Actions for False Claims. U.S. Code source
United States ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419 (2023). U.S. Supreme Court opinion
U.S. Department of Justice, False Claims Act Settlements and Judgments Exceed $6.8B in Fiscal Year 2025, Jan. 16, 2026. DOJ source
U.S. Department of Justice, Honeywell Aerospace Inc. Agrees to Pay Over $2M to Settle False Claims Act Allegations of Failing to Comply with Cybersecurity Requirements, Sept. 1, 2026. DOJ source
New York State Finance Law, Article 13, New York False Claims Act. New York statutory source
This article is for general informational purposes only and does not constitute legal advice or create an attorney-client relationship. False Claims Act matters are highly fact-specific, and businesses should obtain legal advice concerning their particular contracts, certifications, regulatory obligations, investigations, and potential claims.
