This transcript is auto generated
00;00;00;00 - 00;00;23;00
Jonathan Porter
Welcome to another episode of Husch Blackwell’s False Claims Act Insights podcast. I’m your host, Jonathan Porter. Earlier this fall, DOJ made two big changes to the way it plans to enforce the False Claims Act. Both affect any company that gets paid with government money, whether you’re a hospital, drug or device maker, or a defense contractor. DOJ changes are in the Justice manual,
00;00;23;00 - 00;00;48;05
Jonathan Porter
that’s DOJ internal rule book for its own lawyers. Now, these aren’t laws, and judges don’t have to follow it, but it tells us how DOJ lawyers will behave and so it’s important for us to explore these in the False Claims Act. So change one is about guidance. These are policy documents agencies publish like Medicare manuals or FDA memos that explain how the agency reads the rules.
00;00;48;07 - 00;01;13;24
Jonathan Porter
Think of the difference between traffic law and the, say, DMV handbook. So the law says drive a safe speed. The handbook might say slow to 45 and heavy rain useful, but not the law. DOJ’s new policy says it can’t bring a case solely because you didn’t follow the handbook. It still has to point to the actual law or regulation that you broke, but the handbook can still show up as evidence.
00;01;13;24 - 00;01;42;01
Jonathan Porter
That’s a really complicated point we’re going to dig into today. Change two is about dismissing whistleblower cases that DOJ chooses not to join. Neither idea is new. Both bring back positions from 2017 and 2018 now with more detail. But these are really important for anyone who’s under investigation or thinking about becoming investigated in the False Claims Act. So today on the podcast, we’re unpacking these two big DOJ policy shifts.
00;01;42;03 - 00;02;04;08
Jonathan Porter
Joining me to talk about these DOJ policy shifts is my law partner, Cormac Connor. Cormac is a regular on the podcast, scoring. So we called when the administration was changing from Biden to Trump to predict how False Claims Act enforcement was going to change. He nailed a bunch of his predictions. And so we’re bringing back Cormac to talk about all of the changes that these two policy shifts can make.
00;02;04;10 - 00;02;19;07
Jonathan Porter
Cormac is located in DC, former AUSA like myself and one of my favorites to join the podcast to talk about all things False Claims Act. So Cormac, thanks for coming back on the podcast. I appreciate you telling our listeners a little bit about these DOJ policy shifts.
00;02;19;13 - 00;02;21;16
Cormac Connor
You bet, Jonathan, my favorite podcast.
00;02;21;23 - 00;02;33;23
Jonathan Porter
All right. We even talk about your taste in podcasts. But anyway, Cormac, why don’t we start with the guidance, this new guidance policy change. What did DOJ change about how it treats agency guidance.
00;02;33;26 - 00;03;07;11
Cormac Connor
Well, it’s interestingly it is a change back in many ways. So we’re in the interesting historical position where the first Trump administration was followed by the Biden administration. And then we have the second Trump administration. Normally you’d have 4 or 8 consecutive years of the same policy, but we have now, and this is where it’s broken up. What I mean by that is that under the first administration, back in 2017 and 2018, President Trump’s then attorney general, Jeff Sessions, issued a memo which was in 2017.
00;03;07;11 - 00;03;40;04
Cormac Connor
Then in 2018, the DOJ Associate Attorney General Rachel Brand issued another directive. Together, these presented the same policies that we’re again dealing with today. Essentially, it was instructing DOJ litigators not to use federal agency guidance documents as binding law when they were enforcing civil cases. That meant that they were not going to look just at those sub regulatory documents to build cases, unless there was something else.
00;03;40;07 - 00;04;00;20
Cormac Connor
Once we get to the Biden administration, DOJ backed off of that position and they were kind of looking to manuals and that sub regulatory guidance that had not gone through notice and comment procedures. They were using those more as the bases for enforcing False Claims Act cases and other civil type matters. So that happened for the next four years.
00;04;00;20 - 00;04;42;22
Cormac Connor
And now we’re kind of back to where we were in 2017, 2018, where the Sessions, Brand positions from the first Trump administration have been essentially revived in the current policy memo. So what we have is that DOJ lawyers now under this policy reinstitution, if you will, is that if DOJ is going to bring a case under the False Claims Act in particular, they’re going to be looking for a violation of a statute, namely a law that was passed by Congress or a regulation, which is a formal rule that the public got to comment on and was formally enacted as a regulation for whatever agency that regulation applied to.
00;04;42;24 - 00;05;25;14
Cormac Connor
In DOJ’s words, the new policy in the current policy is that it will, quote, DOJ may not bring actions based solely on noncompliance with guidance. This will apply to civil and criminal cases. So the reason this guidance is treated differently by Department of Justice as we go from one administration to another, is really kind of a political posture, but it emphasizes the administration’s focus on telling industry that the government is not going to be looking at enforcement actions where the basis for the enforcement is something other than a properly passed enacted statute or regulation has gone through
00;05;25;14 - 00;05;47;20
Cormac Connor
what is known as a common piece of regulatory guidance and manuals. They kind of step that public comment process so they’re less authoritative. They have kind of fair notice concerns that will come up, as you might imagine, since they haven’t gone through that whole process. And as Associate Attorney General Woodward has put it, DOJ should enforce the law, not make law through enforcement.
00;05;47;23 - 00;06;14;18
Cormac Connor
So as a practical matter, what this means is that a case from DOJ that says you didn’t follow the manual is going to be harder for them to bring unless they have some other basis to bring the case. And that’s under the return of the policy that had been in place in the first administration and now back. It does not change, however, the underlying basic requirements that healthcare providers, contractors must follow, and that is you have to follow the law.
00;06;14;20 - 00;06;40;19
Cormac Connor
You have to meet the obligations that are described in your contracts, even if those contractual obligations will incorporate those same manuals, sub regulatory guidance that we’re talking about with this policy shift, that if the contract tells you you’ve got to follow it, well, then guess what you got to follow it. And finally, you cannot certify that you will do or have done certain things and then not do them just because they involve sub regulatory guidance or complies with manuals.
00;06;40;20 - 00;06;43;03
Cormac Connor
Again, if you certify that you’re going to do it, then you got to do it.
00;06;43;05 - 00;07;02;06
Jonathan Porter
Thanks, Cormac. Yeah, I think that all makes sense. And I think the temptation here might be for listeners to say, okay, well, it sounds like I don’t need to worry about guidance anymore. I don’t need to worry about the manuals unless I’m specifically certifying to it. But I don’t think that’s exactly what’s happening, because there are some carve outs here that are worth exploring.
00;07;02;06 - 00;07;11;09
Jonathan Porter
So, Cormac, tell us what exactly matters. How are these guidance documents supposed to be used? Answer the question. I’m sure some people are asking. Does that mean the guidance no longer matters?
00;07;11;12 - 00;07;35;10
Cormac Connor
It does not. Where we are is is gets in the kind of legalese, if you will. But we’re now in a position where the guidance documents cannot create a duty that a contractor or a health care provider or someone that’s under investigation must have followed. However, it can still be evidence that that person or that company did not meet their obligations that were imposed by the statute or regulation.
00;07;35;10 - 00;07;54;15
Cormac Connor
So it becomes sort of like if you’re building your case, it’s another brick in the wall, but it’s not the wall itself. How might that be used? As far as evidence versus the duty itself, DOJ is no longer going to look at just the manual, for example, and say you didn’t follow the manual. So now we’re bringing a case.
00;07;54;20 - 00;08;32;26
Cormac Connor
What it will be used now instead is to say we’re going to look at the manual as putting a company or person on notice. And so for example, if a manual clearly explains a rule or another regulation that a company or person might think was ambiguous or had some concerns about how to apply it, and if DOJ can show that that manual provided an explanation and can develop proof that the person or the company under investigation actually read it and actually internalized it, then DOJ can look to those manuals to show that the person or the company under investigation knew the rule.
00;08;32;26 - 00;09;01;06
Cormac Connor
And importantly, if there is some ambiguity about the rule that that ambiguity had been resolved. So you kind of take that defense off the table as an evidentiary basis. DOJ is not going to treat the awareness of the manual as an admission right, that the agency’s reading was correct, or the application of the rule was correct. But what it means is that if the company has been reviewing the manual and its employees have been reviewing the manual, they can’t come back around and say, oh, we didn’t know what it meant.
00;09;01;09 - 00;09;26;11
Cormac Connor
That’s really how that’s going to play out as a piece of evidence. Another application would be evidence of an industry standard. So for example, in the healthcare context, if a doctor prescribes opioids that are in a volume that’s far beyond CDC guidelines or a Medicare manual suggests that a service was not medically necessary, this is going to be evidence.
00;09;26;13 - 00;09;51;23
Cormac Connor
But if a health care provider, the doctor or the person providing the service doesn’t meet the definition that’s in the manual, that’s not going to be the legal standard. It’s again, it’s just separate from the other duties of care that are imposed by regulation. In that circumstance, the health care provider or the company, the doctor or the physician, etc. can push back with other kinds of evidence, some perhaps expert testimony, something like that
00;09;51;23 - 00;10;15;19
Cormac Connor
to say that if the manual itself is not the violation and you’re just using it as evidence, then I’m going to offer other evidence to show that I was doing the right thing. Another instance that where this might come into play is a false certification. So, for example, if a person signs a form or the company’s representative signs a form saying that we follow the manual in order to get paid, and that’s not actually true
00;10;15;19 - 00;10;57;04
Cormac Connor
like they didn’t actually follow the manual, or there’s ways that the government can prove that didn’t actually happen. Then it’s really the lie, right, the the certification that was false. That’s the problem. Rather than failing to follow the manual because the manual, again is not the binding law, it’s what the hook here is, is your certification that you followed. Similar context when you look at contracts, as I mentioned before, if you’re operating under a contract that has a provision that requires the contractor to follow a manual, a provision or any sort of sub regulatory guidance that would on its own be outside of DOJ’s enforcement priorities
00;10;57;05 - 00;11;19;08
Cormac Connor
now, the fact that the contract incorporates that sub regulatory guidance or that manual into the contract makes compliance with it enforceable, and then that again becomes the basis for an enforcement action. So think of it as like a lease that says a tenant has to follow the building rules handbook and the tenant doesn’t follow the building rules handbook.
00;11;19;08 - 00;11;42;07
Cormac Connor
It’s not the building rules handbooks and watch that’s in play as the tenant’s failure to follow them because they said that they would. That’s where you and I come into play here, unfortunately for most people, right, that this is where the lawyers get in. But it is a meaningful distinction when you think of it from a perspective of a person who is trying to comply with these manuals, the important piece is what’s your contract say?
00;11;42;07 - 00;11;47;04
Cormac Connor
What are the regulations say, what the statutes say, and then the manuals are kind of an add on to that.
00;11;47;07 - 00;12;07;17
Jonathan Porter
Thanks, Cormac. And what I think we’re saying here is there are some really important exceptions to this policy. What I don’t want our listeners to think is, okay, well, now the guidance doesn’t matter. These exceptions are really, really important. What this policy shift is aimed at is DOJ promising an entire investigation on something that’s not in the regulations.
00;12;07;23 - 00;12;26;04
Jonathan Porter
That’s really important. When it comes to certifications or contracts, that’s where it’s important that Cormac and I, we talk about materiality because there’s a lot of rules out there, a lot of things that are in coverage, determinations and the like that might not be material. And so that’s where we get to earn our keep is to dig into those types of issues.
00;12;26;04 - 00;12;43;00
Jonathan Porter
So Cormac I would imagine some of our listeners are sitting here thinking, okay, well would I understand this, but what do I do about it? So why don’t you give us some practical advice on this before we pivot to the other policy shift? What should a company do about this guidance, policy shift and what’s still uncertain?
00;12;43;03 - 00;13;07;12
Cormac Connor
If you’re a company or person that’s in the unfortunate position of being under investigation, the first gating question is going to be what was the actual law, the regulation or the contract provision that DOJ is saying you violated. That’s really going to be the main focus. What that means is don’t push those manuals to the back of the shelf or dump them in the back corner of the closet.
00;13;07;14 - 00;13;39;15
Cormac Connor
They’re still important. There’s still going to be potentially used as evidence about what you or your business knew. And it may, as we’ve talked about, may be incorporated into your contract. So the focus is on those legal requirements that are in the statutes, that are in the contracts, that are in the regulations, but keep tracking those agency documents because they’re out there and again, they can be pulled in by investigators as evidence of what the standard of care was, what general knowledge was, what your company or what your employees knew.
00;13;39;22 - 00;14;11;17
Cormac Connor
So be careful again, as we talked about with certifications. So any time that you or your company is submitting a document or a claim for payment or a request or an invoice to the government and saying that you complied, be very careful about what you’re certifying to and certifying that you complied with. Because if that compliance certification includes and references manuals or other sub regulatory guidance, that all gets pulled back into the primary focus for a DOJ investigation.
00;14;11;17 - 00;14;33;02
Cormac Connor
So you’ve got to be sure that you’ve actually done it. It’s not so much the manual in that circumstance that’s the issue, it’s the certification of compliance that creates a risk. Whistleblower lawyers in these circumstances are probably going to be adapting to this. And as we mentioned, they’ve already been through this before. Right? They were in this posture four years ago.
00;14;33;05 - 00;14;59;27
Cormac Connor
It’s not going to be too difficult for them to reorient themselves on this new guidance. We should expect that when presenting cases to DOJ for review, they’ll be sure to focus on the other statutes. The regulation that surrounds a manual or sub regulatory guns, and making sure that those are kind of their primary focus, and then they’ll bring in experts earlier to help justify their allegation.
00;14;59;27 - 00;15;22;12
Cormac Connor
So I don’t expect that this is going to mean, you know, lots of whistleblower cases are going to go away because the attorneys that are bringing them in the qui tam bar will be able to pivot and react to these policy shifts. So what is still unknown is how is this going to apply to cases that are already in the system that are already underway because as we know, these things can take a long time.
00;15;22;15 - 00;15;43;25
Cormac Connor
And it’s an opportunity, frankly, for attorneys like you and me, if we’ve got an active case and we know that it is really focused on sub regulatory guidance as being the core aspect of some accused violation space, we’re now in a position where we can maybe push back on that a little bit and point to this policy shift, but again, that’s going to remain.
00;15;43;25 - 00;16;11;13
Cormac Connor
That remains unclear. And you can be sure that if there case is underway, the attorneys running that case are going to be less than excited to be told that their policy has changed and now they get to drop the case. Worth evaluating. But with caution, I guess, as to how to tactically and strategically approach that. Another question is going to be whether judges are going to agree with this approach, right, as cases make their way into the courts, if this policy gets in front of a judge, whether a judge is going to agree that this is the right way to go.
00;16;11;16 - 00;16;35;00
Cormac Connor
Unknown. And then finally, will agencies turn their key guidance documents into formal regulations, right. Or are they just going to say, all right, fine. We’ve been talking about this sub regulatory guidance. We’re just going to make it regulatory and go through the process so that now that’s no longer a focal point for the investigation. So, those are all issues that remain to be seen.
00;16;35;03 - 00;16;49;12
Cormac Connor
It may be that if you fast forward two years and we’ve got another president in the White House, that changes gears. By the time these FDA cases work the way through. We may be talking about this from the other end of the telescope, as it were. But those are all things that we expect will be coming here in the next year
00;16;49;12 - 00;16;50;03
Cormac Connor
plus.
00;16;50;06 - 00;17;06;10
Jonathan Porter
Thanks, Cormac. And that’s a good way of framing it, because thinking back to the brand memo, which did a lot of this in the first Trump administration, I mean, looking back at it, there was not this big jarring shift from one to the other, at least in terms of a boots on the ground situation from a high level policy perspective.
00;17;06;10 - 00;17;24;05
Jonathan Porter
Yeah, there was a shift. I just don’t know that it actually impacted all that many cases. I’m sure there’s going to be some particular cases where there’s DOJ bringing it and there’s a particular coverage determination, and it’s not in any sort of law or regulation. There’s no certification out there. So this may have an actual impact on some things.
00;17;24;07 - 00;17;41;17
Jonathan Porter
If we were to shift to a different administration in a couple of years, but like you said, remains to be seen. For now, it’s important that our colleagues that are the defense bar on the FCA side knows about this and make sure to argue it any time you’re straying away from a law, statute, regulation or anything like that.
00;17;41;17 - 00;18;04;21
Jonathan Porter
So, Cormac, thank you for that. Let’s shift now to talk about dismissing declined whistleblower cases. Very quick primer for those who are perhaps new to the podcast. You know, a lot of FCA investigations are triggered now by qui tams, whistleblower filing something under seal. The majority of qui tams never go anywhere. DOJ doesn’t take them. They don’t settle it.
00;18;04;21 - 00;18;24;03
Jonathan Porter
They end up declining to intervene. And sometimes the whistleblower will say, okay, I tried, so I’ll go away now. I’ll dismiss it on my own. But sometimes when the whistleblower decides to go forward anyway, and when the whistleblower is going forward, they’re going forward in the shoes of the government. And yet the government itself is the one who is the real party in interest.
00;18;24;03 - 00;18;54;00
Jonathan Porter
And so there is this mechanism in the False Claims Act that lets DOJ step in and dismiss cases that they’re not participating in. That’s called C2A or affirmative dismissal. All these things, as we said in the open, DOJ made a big shift in their procedures for dismissing declined qui tams. And so Cormac let’s dig into that. So when DOJ declines to join a whistleblower case, what’s changed now about what happens next.
00;18;54;02 - 00;19;17;22
Cormac Connor
To what we’ve got is a enhancement, I guess, of the authority that DOJ already had. It’s sort of, I guess, putting it more clearly into focus. So if we roll the tape back to 1986, this is when Congress gave DOJ the power to dismiss False Claims Act cases. Now, back then it was rarely used and it got a lot of attention
00;19;17;25 - 00;19;43;23
Cormac Connor
many years later in 2018, when a DOJ policy memo known as the Granston memo was published. And that memo listed a series of reasons why DOJ would step in to affirmatively dismiss the case. It got the defense bar really excited because we’re looking at this thinking, oh my goodness, we’re going to see lots of these cases go away.
00;19;43;25 - 00;20;14;27
Cormac Connor
The bases that were listed in the Granston memo included determination by DOJ that, for example, they didn’t think the case had merit or that it was duplicative of some other government investigation. They might see that it conflicts with agency policy. There’s another provision that says, we think that the burdens that the case is going to impose on the agency, such as, you know, discovery responses, depositions, things like that are going to be so heavy that it outweighs any benefit the government’s going to get from proceeding with the case.
00;20;14;27 - 00;20;39;14
Cormac Connor
And that was another reason listed in the memo why DOJ might step in and dismiss. So there again, it was recognizing a power that DOJ already had. And I think it’s important to remember that this is happening in circumstances where DOJ has reviewed a case presented to them by a qui tam relator or whistleblower, has decided that the case has enough merit to proceed.
00;20;39;14 - 00;21;00;21
Cormac Connor
But DOJ is going to back away and declined to intervene, meaning that the whistleblowers and their attorney are going to be proceeding forward. They’re going to be taking the lead on the case. DOJ is just going to stay in the background and keep an eye on things. What the Granston memo did was confirm that they are opportunities for DOJ to jump in.
00;21;00;23 - 00;21;22;20
Cormac Connor
And even though they’ve declined to intervene, dismiss the case anyway for the reasons that were outlined in the memo and some of which I just described. What is changed in this most recent policy development is that they, under the Granston memo for the last almost ten years, DOJ lawyers were instructed that they should consider dismissal when they’re declining a case.
00;21;22;20 - 00;21;44;15
Cormac Connor
Right. So that’s at the decision point where DOJ is looking at a complaint that was filed by a qui tam relator. DOJ is deciding should DOJ pick up this case and intervene or declined to intervene if they decide to decline, then what the memo said was that in making that decision, they should also consider whether they should just go ahead and dismiss it.
00;21;44;18 - 00;22;15;12
Cormac Connor
So not mandatory language, right? Is that should consider there’s room for interpretation there and room for discretion. What we have now is that it sort of cranking up the level of mandatoriness, if you will, and saying, now, under the current policy, DOJ attorneys and making a declination decision, quote will in each case assess whether to dismiss. And that’s also a question that they can revisit throughout the case at any point in the litigation, all the way up to trial.
00;22;15;15 - 00;22;37;24
Cormac Connor
And so just because DOJ is decided at the earliest stage that they don’t want to get involved in the case, they don’t want to intervene, and they have decided at the early stage that they also aren’t going to dismiss, the case goes forward, DOJ can always come back and change its mind, and it’s instructed to do so in its in much more mandatory language.
00;22;37;26 - 00;22;58;04
Cormac Connor
So what that means is that the initial decision not to dismiss is really only tentative. As the case goes forward, they can always come back and change their mind. But as we think about how these cases unfold, it’s important to remember that DOJ’s decision to decline to intervene is not the same as DOJ saying that they think this case is weak.
00;22;58;07 - 00;23;25;15
Cormac Connor
Oftentimes, DOJ will decline just because they don’t have the resources to take it on. We’re seeing a heavy influence from the Trump administration to push False Claims Act cases. And there’s only so many lawyers at DOJ. Right. And so with many more cases in the pipeline and a determined focus by the administration to push fraud cases, especially False Claims Act cases, again, there just may not be enough bodies to do the work.
00;23;25;15 - 00;23;42;29
Cormac Connor
And so that can be a reason why DOJ might decline solely because they just don’t have the people to do it. But what this policy is confirming is that that declination decision, if it does not also come with a dismissal decision, is not dispositive. It means that they can always come back and look at it again down the road
00;23;42;29 - 00;24;10;21
Cormac Connor
once the case develops and they learn more about the facts and evidence. An interesting edit that came with the policy shift is as follows. The old policy under the Granston memo would target cases that, quote, facially lacked merit. This is really when you’re looking at the complaint itself and that under the statute, a qui tam relator or whistleblower launches the case by preparing a complaint that is then delivered to DOJ for review.
00;24;10;23 - 00;24;35;16
Cormac Connor
And if DOJ, as they look at just the complaint itself, not doing any other investigation, if just the complaint lacks merit, that was the basis to back away and dismiss a case. If the new policy softens that a bit, and it describes the basis for dismissal as meritless. Subtle, but what it means is that we’re not talking just about the complaint anymore.
00;24;35;16 - 00;25;09;20
Cormac Connor
Now we’re talking about the case as a whole. And that means that as the case unfolds and we move beyond the filing of the complaint, we get into depositions, we get into document review and learning more about the facts of the case and defenses that the parties are going to present as that case unfolds. If DOJ determines that it lacks merit or it is meritless on that continuing review, that’s an opportunity for defense to come in and ask DOJ for relief and suggest that now is an opportunity for them to come in and dismiss things.
00;25;09;22 - 00;25;28;16
Jonathan Porter
Thanks, Cormac. So that last thing you’re talking about is truly important, because there are situations where a relator says, hey, this defendant did X, and if X is true, that’s a problem. And so on the face of the qui tam that doesn’t lack merit. But when DOJ digs in it’s just like, well, it’s provably false. X is provably false.
00;25;28;16 - 00;25;56;23
Jonathan Porter
It just didn’t happen. Now with this shift that opens the door up to DOJ getting involved and dismissing it, it’s not that it facially lacks merit, but it is meritless if you actually dig behind the allegations. That’s actually an important thing for a lot of people. And so thanks for that, Cormac. One part of this that I want to make sure our listeners understand, because I think some people, they hear this and they say, okay, great, DOJ is going to dismiss all of these declined qui tams, but that’s not really what’s happening here.
00;25;56;25 - 00;26;10;16
Jonathan Porter
So Cormac how common are these C2A Granston dismissals. Is this happening a lot. And how likely is a judge to agree to a DOJ request to dismiss.
00;26;10;18 - 00;26;34;08
Cormac Connor
Let’s see very as we look back to authority for that comment that I just made, we look back to a decision from the Supreme Court in 2023 known as Polansky. And in that decision, the Supreme Court advised lower court judges to think several times over. That was the direct quote, think several times over before denying a government request to dismiss the case.
00;26;34;09 - 00;27;13;02
Cormac Connor
Right. So that’s important. They’re advising, again, the trial court level judges not to just jump in and deny a DOJ request without having thought very carefully about that decision. What this is doing is recognizing the DOJ maintains authority over the case at all points of the litigation. This is a subject for another pod. But when we talk about the constitutionality of the qui tam provision itself, that’s been litigated recently as to whether it’s lawful to allow a qui tam relator to go forward with a case, the DOJ has declined to intervene in,
00;27;13;05 - 00;27;49;02
Cormac Connor
does that give them unlawful authority as part of the executive branch? That issue is working its way through the courts right now. But one of the main arguments the DOJ and qui tam relator have presented in support of the False Claims Act and the qui tam provisions is exactly this. The DOJ at all times has the ability to jump back into the case and dismiss it, and they have that kill switch, if you will, authority at any time, which demonstrates that it’s not just allowing qui tam Relator’s and their attorneys to run amuck and take these cases without any supervision.
00;27;49;05 - 00;28;13;24
Cormac Connor
The Polansky decision reinforces that concept, and again advises trial courts that when they are presented with a DOJ motion to dismiss a qui tam relator case, that they should, to quote the Supreme Court, think several times over before denying it, which is kind of an upside down way of saying they should grant. Chances are, if DOJ files motion to dismiss, it’s going to be granted.
00;28;13;27 - 00;28;39;01
Cormac Connor
Now, how often do these things happen? How often does DOJ actually move to dismiss is changing after the Granston memo that we just talked about, DOJ’s own records and statistics show that DOJ moved to dismiss in about 45 of the almost 1200 cases that had been filed in the two years following that memo. Doing the math, that’s about 4%.
00;28;39;04 - 00;29;06;13
Cormac Connor
So a small but significant number. The DOJ has reported that in 2025, as the just last full year, DOJ dismissed 25 qui tams. And that was up from six in the previous year. So the 2024 was the last year of the Biden administration, and only six cases have been dismissed by DOJ. We’d look again, fast forward to 2025, and it’s a little more than four times as much.
00;29;06;13 - 00;29;37;01
Cormac Connor
Now, keep in mind that there were also a lot more cases in the pipeline in 2025. So yes, there is a new emphasis on affirmatively dismissing cases, but there were also a lot more cases out there. What we see here is that DOJ has reinforced its policy position that it can and will jump in and dismiss cases that it finds to lack merit or to be imposing the other burdens that are discussed in the Granston memo.
00;29;37;04 - 00;30;08;09
Cormac Connor
We expect that, as we’ve seen throughout 2025, will continue into 2026, that the dismissal kill switch, if you will, is going to be used even more. It’ll still be used selectively for all the reasons that are outlined in the Granston memo, and it may even vary by U.S. Attorney’s office. Right. The reason by reason, depending on what areas of influence and enforcement priorities are localized in those U.S. Attorney’s office, we may see variations and probably will see variations based on that.
00;30;08;11 - 00;30;15;20
Cormac Connor
But overall, we expect that given the recent policy developments, that we’re going to see even more dismissals this year than we did last.
00;30;15;22 - 00;30;41;21
Jonathan Porter
All good points, Cormac. The takeaway for me is it’s still really rare. I mean, it was super, super rare before. Now it’s just plain rare. The vast majority of these DOJ’s going to let whistleblowers carry these forward, but it’s important for us to make the arguments that they shouldn’t. And so that’s why understanding the Granston factors or I guess now their justice manual factors are really important so that we can make the right arguments because rare doesn’t mean non-existent.
00;30;41;21 - 00;31;00;05
Jonathan Porter
And so that’s why we make the argument is because some of these qui tams are not supposed to go forward under these factors. So Cormac, thanks for that. Why don’t we close this out. Cormac, one last question for you. What should companies keep in mind and is this a sign that DOJ is easing up on fraud? Is that the takeaway here?
00;31;00;08 - 00;31;31;23
Cormac Connor
I would say it’s easing up on fraud so much as it is focusing on the cases that give them the biggest bang for the buck, right, that they are most likely to result in settlements, result in resolutions that remedy those allegations of fraud, and they don’t want to be wasting resources and spending time on cases that don’t have the promised rate of return, or that the case the facts a week or again, it’s going to be creating all kinds of extra burdens on agencies that are really going to be worth the outcome at the end.
00;31;31;26 - 00;31;55;23
Cormac Connor
When we think about this from the perspective of our clients, for companies, or individuals that are facing False Claims Act investigations like there is an opening to make your case to DOJ, an advocate for dismissal, whether that’s during the sealed secret period when DOJ is reviewing a qui tam relator’s complaint, and nobody else knows about it yet because it’s still confidential.
00;31;55;26 - 00;32;23;29
Cormac Connor
So there’s during that phase, of course. And then there’s after DOJ decides they’re going to decline if that happens, which let’s be clear, that’s a good development, right. For on the defense side, most cases. But it mean that your opportunity to seek dismissal is over. As the case unspools, you learn more facts, you get more evidence, your defenses come into clearer focus, as does the claims that are being asserted against you.
00;32;24;01 - 00;32;51;14
Cormac Connor
As that take shape, arguments may develop where you’re able to go back to DOJ, who’s then again, because they’ve declined doesn’t mean they’ve disappeared. To go back to those same trial attorneys and make the argument that, you know, we’re now in a spot where the case just doesn’t hold up, and to go back and present them with your best case, why you think the case doesn’t have merit, why you think it’s duplicative, some other investigation conflicts with agency polic, adds burdens.
00;32;51;14 - 00;33;19;26
Cormac Connor
All this stuff that we’ve been talking about, the kinds of things that are laid out in that Granston memo that, again, as you noted, are now formally part of the justice manual. Agency support for these investigation matters. If you’re getting the sense that the agency that’s implicated in the fraud allegations really doesn’t care, or there’s real materiality questions, or you can tell in depositions that the witnesses are really just not feeling this case.
00;33;19;26 - 00;33;41;00
Cormac Connor
Right. They don’t have a lot of real dog in this fight. You’ve got opportunities again, to take that back to the DOJ and push for dismissal. Having said all of that, don’t overdo it, because you can be sure that after the Granston memo came out, trial attorneys were getting bombarded with requests for why they should dismiss their cases.
00;33;41;03 - 00;34;01;07
Cormac Connor
You don’t want to be the boy who cried wolf, right? And very constantly claiming, oh, this case lacks merit. Blah blah blah blah blah. Because if that’s not holding up, then the next time, if you try that declination and it doesn’t work and you come back six months later after the case is developed and it’s still not there, but you’re still pushing it, it’s going to boomerang on you and it’s just not going to work.
00;34;01;07 - 00;34;23;16
Cormac Connor
So make sure you’ve got a compelling case and make sure you’ve got a compelling argument that doesn’t suggest the DOJ is going to be backing away from enforcement by any means. What this policy shift means is that DOJ is going to stay aggressive where there are clear violations, or where they think they’ve got a meaningful chance of success at litigation.
00;34;23;18 - 00;35;00;10
Cormac Connor
And in fact, the DC US Attorney’s office just announced that it started its own dedicated fraud division. The vice president is overseeing a fraud enforcement component of DOJ. So the focus on fraud is definitely not going away. I think what this is, is emphasizing is that it’s focusing on the cases that are winnable and recognizing that not every case is in that category, but taking the next step to authorize and encourage trial attorneys to look for those cases that aren’t going to make it, that don’t have good facts and good evidence, and go ahead and trim resources and get those off the docket.
00;35;00;12 - 00;35;26;18
Cormac Connor
When we talk about, from the perspective of our clients, from the companies, from the employees, from the, individuals that are facing these investigations, keep in mind that qui tam cases typically are going to be coming from somebody who’s got an ax to grind, right. It’s often going to be somebody inside the building, a current or recent former employee that knows some information that they think is going to support a False Claims
00;35;26;18 - 00;35;54;18
Cormac Connor
Act case. There’s lots of other ways that these come about, but that is a tried and true example, which means that as employers are responding to internal whistleblower hotlines, complaints about compliance issues that are coming up through the compliance department, complaints being made to H.R. Have to keep your antenna up to things that might sound in fraud, might be jumping from
00;35;54;21 - 00;36;15;12
Cormac Connor
this is not just an employee who’s upset they got passed over for a promotion, but if they’re also saying, hey, you know what, I know that time card fraud is happening or I know that people that we’re not qualified to be providing certain health care services were, in fact, not only providing it, but then billing for it. If you start hearing those types of issues,
00;36;15;15 - 00;36;42;20
Cormac Connor
time to hit the gas and investigate, figure out what’s going on and get ahead of it, because those are the things that can pop up again as a qui tam complaint. Now, what we’re talking about today is, is whether they’re going to have merit. So solving those on the front end as best you can is as good as you can do to prevent yourself from having to go through months or maybe even years of investigation before you’re able to get to a spot where you can make the pitch to the trial attorney that the case should be dismissed.
00;36;42;23 - 00;36;47;22
Cormac Connor
Better to solve it on the front end and never have to get in a spot in the first place.
00;36;47;24 - 00;37;13;04
Jonathan Porter
Yeah, those are all excellent points, Cormac. And I think the big takeaway here is this is not in any way a signal that DOJ is easing up on fraud. This is just DOJ recognizing that not all whistleblower complaints should be treated the same. So if you’ve got something that’s meritless, that’s very different than something that is meritorious. I think DOJ’s very, very interested in meritorious whistleblowers and qui tams going forward and doing quite well.
00;37;13;07 - 00;37;28;08
Jonathan Porter
But this is an important recognition that not all whistleblowers are the same. And so I appreciate you unpacking all that force. I hope our listeners found that really helpful. But Cormac, seriously, thank you for coming on the podcast and exploring these two big policy shifts for our listeners.
00;37;28;11 - 00;37;30;29
Cormac Connor
You bet. Been great. Always is.
00;37;30;29 - 00;37;50;04
Jonathan Porter
I’m told by our podcast people that this is our 50th episode, and so there’s a bunch of people to thank, and all of those people would be mortified if I named them on the podcast. And so to the people who make this podcast happen, and I just know I’m grateful for you. I won’t embarrass you by saying your name on the podcast, but you know who you are.
00;37;50;11 - 00;38;07;02
Jonathan Porter
And so thank you to the team behind us. Cormac and I, we do some work to put this together, but there’s a bunch of people behind the scenes that do way more work than we do, and it’s nice to be at a firm with such amazing professionals who make our lives easier. And so I’m grateful to the people who make this possible.
00;38;07;02 - 00;38;22;08
Jonathan Porter
I’m grateful to our listeners who have stuck with us through 50 episodes. We’ve had some fun times here over the last couple of years, and we’ll keep it going. And so however you’re listening to this, you can continue listening to it through, you know, the buttons on your screen right now. So, you know, click the buttons. But to our podcast team here,
00;38;22;08 - 00;38;31;22
Jonathan Porter
thank you. And to our listeners, we appreciate you. And we’ll see you next time.