DOJ Emphasizes Limitations on the Permissible Uses of Agency Guidance Documents in Civil Enforcement Cases

Associate Attorney General Rachel Brand recently issued a memo (available here) reiterating DOJ’s new position that its litigators cannot use noncompliance with agency guidance documents as evidence of a legal or regulatory violation.  As the Associate AG commented in DOJ’s official press release (available here), “this policy helps restore the appropriate role of guidance documents and avoids rulemaking by enforcement.”  In the past, DOJ and relators frequently relied upon statements in a variety of sub-regulatory guidance, including HHS-OIG Advisory Opinions and CMS National and Local Coverage Determinations, as evidence of liability under the FCA.  However, the new policy constrains the permissible uses of such guidance.  While plaintiffs/relators can still use guidance documents for narrow purposes, such as to establish that a defendant had the requisite knowledge of relevant legal obligations, they cannot wield guidance documents as presumptive evidence of noncompliance.

The memo implements a November 16, 2017 proclamation from Attorney General Jeff Sessions that prohibited all DOJ offices from “issu[ing] guidance documents that purport to create rights or obligations binding on persons or entities outside the Executive Branch” or “creat[ing] binding standards by which the Department will determine compliance with existing regulatory or statutory requirements.”  The Sessions memo emphasized the importance of DOJ adhering to the rule of law by using notice-and-comment rulemaking procedures when imposing new regulatory requirements.

Some within DOJ are contesting the reach of the Brand memo, as highlighted by a recently publicized exchange between defense counsel and representatives of DOJ’s Civil and Criminal Divisions.  Defense counsel asserted that DOJ must modify its complaint (alleging violations of the Anti-Kickback Statute and FCA) to comply with Brand’s memo, and that the criminal prosecutors must similarly update their perspective in their ongoing investigation.  In response, a DOJ Civil lawyer stated that the government has “no plans to amend [the] civil complaint to remove references to HHS-OIG’s decades-plus of guidance.”  Furthermore, the Civil lawyer implied that the Brand memo’s policy is more restrictive than the Sessions memo, but that the Brand memo ostensibly does not apply to the Criminal Division because “the Criminal Division does not report to the Associate AG.”

Copies of the email exchange can be found here and here.