DOJ Says Guidance Documents Can’t Drive Enforcement Actions

Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.

By Dana A. Elfin

A new policy out of the Justice Department prevents department litigators from relying on guidance documents to establish legal violations in civil enforcement actions.

The policy announced Jan. 25 means guidance documents can no longer be used as a basis for bringing civil enforcement actions, and it could lessen the risk companies will face catastrophic punitive damages, particularly in False Claims Act cases.

The new policy follows on the heels of a November 2017 memo issued by Attorney General Jeff Sessions, which prohibited agency guidance documents from being converted into binding rules. “In the past, the Department of Justice and other agencies had blurred the distinction between regulations and guidance documents,” the DOJ said in a Jan. 25 statement announcing the policy.

“Although guidance documents can be helpful in educating the public about already existing law, they do not have the binding force or effect of law and should not be used as a substitute for rulemaking,” Associate Attorney General Rachel Brand said in the statement.

“Consistent with our duty to uphold the rule of law with fair notice and due process, this policy helps restore the appropriate role of guidance documents and avoids rulemaking by enforcement,” she said.

False Claims Impact

The new guidance will particularly affect False Claims Act cases, several health-care fraud attorneys told Bloomberg Law.

“This new policy from the Associate’s Office is a very significant development for life sciences and health-care enforcement cases,” Laurence Freedman of Mintz Levin told Bloomberg Law Jan. 26. “It is a terrific step to ensure fair notice and due process in False Claims Act and other cases, and to make it crystal clear that subregulatory guidance does not create enforceable rights and obligations.”

“In life sciences and health care, there has been an explosion of subregulatory guidance, and many have noted that this has become regulation through enforcement,” Freedman said. “The policy draws a sensible line—subregulatory guidance can be used to establish knowledge of regulatory requirements, but not to create new obligations,” he said.

Freedman’s health-care and life sciences litigation practice focuses on defending clients against allegations and investigations of fraud and abuse involving governmental programs.

“This new policy has the potential to be very significant with respect to DOJ’s enforcement of False Claims Act cases, most of which are initiated by individual whistleblowers,” Laura F. Laemmle-Weidenfeld of Jones Day in Washington told Bloomberg Law Jan. 26.

“The DOJ is the only federal agency with authority to prosecute FCA cases, although it is expected to consult with its client agencies such as FDA and HHS-OIG in the process of bringing such cases,” according to Laemmle-Weidenfeld, who is a Bloomberg Law advisory board member and specializes in defending clients in health-care fraud enforcement actions.

“The guidance has a significant impact on civil enforcement by DOJ and is aimed squarely at punitive False Claims Act enforcement that may not be supported by clear regulations or statutes,” Katie McDermott of Morgan, Lewis & Bockius LLP in Washington told Bloomberg Law Jan. 26. She is also a Bloomberg Law advisory board member and specializes in defending clients in health-care fraud enforcement actions.

No More ‘Bootstrapping’ Claims

The new policy could decrease the chances that the government will use guidance-type documents such as fraud alerts and advisory opinions to bootstrap civil claims against companies, Kevin G. McAnaney of the Law Offices of Kevin G. McAnaney in New York said. It’s also likely to be useful against relators’ counsel who routinely try to use guidance as proof of kickback violations, he told Bloomberg Law Jan. 26.

The DOJ routinely uses Office of Inspector General special fraud alerts, bulletins, and advisory opinions in support of anti-kickback and False Claims Act cases, according to McAnaney, who specializes in health-care fraud issues.

“The government loves to make the argument that the fraud alerts, advisory opinions, etc. ‘put industry on notice’ and then tries to bootstrap that into ‘knowing’ false claims,” he said.

Guidance Needed

“There is a need for this guidance in FCA cases, which are evolving too often into regulatory or contract violation cases cobbled together sometimes by no more than draft agency guidance or inconsistent guidance that purports to be lawmaking,” McDermott said.

“The guidance suggests there should no reliance on guidance documents in conference room arguments by DOJ to suggest highly punitive liability,” she said.

“There is a great deal of unaccountability and arbitrariness when enforcement rests on guidance documents which can be in draft form or even inconsistent,” McDermott told Bloomberg Law. “It is often difficult to get enforcers or policy makers to care about these issues so this guidance is a good start to reframing where enforcement should begin, which is assessing a violation of law, not policy,” she said.

To contact the reporter on this story: Dana A. Elfin in Washington at

To contact the editor responsible for this story: Brian Broderick at

For More Information

The policy is at

Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Health Care on Bloomberg Law