Eddie Suarez and Sara Mieczkowski | www.suarezlawfirm.com
A company can persuade DOJ not to join a False Claims Act suit and still have a lawsuit to defend. The whistleblower who brought the case can continue without the government. Getting DOJ to stay out and getting the case dismissed are different things.
DOJ’s September 18, 2026, revisions to the Justice Manual give counsel a reason to ask DOJ to seek dismissal. When DOJ considers declining a qui tam case, its lawyers must also assess whether the government should ask the court to dismiss it (DOJ announcement).
A separate October 1 directive addresses corporate criminal investigations. Issued by Assistant Attorney General Colin M. McDonald, Directive 26-12 identifies the National Fraud Enforcement Division’s priorities, and the facts prosecutors should weigh when deciding whether to charge a company. Counsel handling either kind of matter now has specific policy language to work with. The challenge is showing how it applies to the client’s facts (Directive 26-12).
Explain why ending the case serves the government
DOJ’s decision not to intervene does not necessarily mean it thinks the case lacks merit. The Manual says so expressly. Counsel seeking dismissal therefore needs to explain why allowing this particular suit to continue would not serve the government’s interests (JM 4-4.111).
The Manual identifies seven possible reasons. They include a case that lacks merit, duplicates an existing government investigation without adding useful information, interferes with agency programs or policies, or is likely to cost the government more than it gains. The remaining grounds concern DOJ’s control of litigation brought in its name, classified information and national security, and egregious procedural errors that could frustrate the government’s investigation (JM 4-4.111).
Each ground calls for a different showing. If the claim fails as a matter of law, identify the defect. If it duplicates an investigation, explain why the relator adds nothing useful. If discovery would burden an agency, identify the records, witnesses, and work involved. Give DOJ enough detail to evaluate the objection.
The agency’s position matters, too. DOJ lawyers should consult the affected agency and obtain its recommendation before seeking dismissal. Counsel should understand how the litigation affects that agency, rather than assume its interests are the same as the company’s (JM 4-4.111).
DOJ can seek dismissal even after initially staying out
The FCA allows the government to seek dismissal over a relator’s objection, provided the relator receives notice and an opportunity for a hearing. In United States ex rel. Polansky v. Executive Health Resources, Inc., the Supreme Court held that DOJ must intervene before exercising that power. It can do so after initially declining, upon a showing of good cause (31 U.S.C. § 3730(c)(2)(A), (c)(3); 599 U.S. 419 (2023)).
Courts apply Rule 41(a), which governs voluntary dismissals. Once the defendant has served an answer or a summary-judgment motion, the court must consider the relator’s interests while giving substantial deference to the government. DOJ will ordinarily prevail if it reasonably explains why the burdens of continuing the suit outweigh the benefits (Polansky, slip op. at 13–17).
That makes the timing of a defense presentation worth considering. Counsel can raise dismissal while DOJ is deciding whether to intervene. If discovery later reveals a weakness in the claim or an unexpected burden on the agency, counsel can return with that evidence. The revised Manual expressly allows DOJ to reconsider dismissal as the litigation progresses (JM 4-4.111).
An agency manual is not automatically a legal obligation
The September revisions also address agency guidance. Under JM 1-19.210, DOJ cannot treat a failure to follow guidance, by itself, as a violation of law. Counsel should start by identifying the legal requirement the government says the client violated (JM 1-19.210).
Guidance can still help prove a case. It may show what a defendant knew, provide evidence of professional standards, or help establish that a certification was false. A contract or provider agreement may also require compliance with guidance. In that situation, the obligation comes from the agreement. Knowing what guidance says, however, does not amount to conceding that its interpretation of the law is correct (JM 1-19.220–.250).
Consider a hypothetical billing dispute. DOJ points to an agency manual and says the provider failed to follow it. Counsel should ask what makes that provision binding. If the theory rests only on the manual, the policy supports an objection. But if the provider agreed to follow the manual, or falsely certified compliance in a way material to payment, its nonbinding status does not dispose of the case. The agreement and the alleged misrepresentation still need examination.
In criminal cases the directive identifies facts worth addressing
The October directive concerns a different decision: whether to bring corporate criminal charges and how to resolve those cases. It prioritizes health care fraud, procurement and other government-related fraud, significant revenue evasion, and schemes involving tariffs, imports, or forced labor (Directive 26-12, pp. 3–4).
Its factors include management involvement, concealment, threats to public safety, harm to government programs, funds supporting foreign adversaries, and immigration offenses. Several have numerical thresholds: conduct lasting at least three years, affecting at least three federal districts, or causing financial harm to at least 25 victims or losses of at least $25 million. These are nonexclusive considerations, not minimum requirements for prosecution (Directive 26-12, p. 4).
Take a hypothetical involving 18 months of conduct, one district, and $4 million in losses. Counsel can point out that the duration, geographic reach, and loss amount fall below those thresholds. But management involvement or concealment may still weigh heavily against the company. The presentation needs to address those facts as well.
The directive also requires Fraud Division prosecutors to involve the Corporate Enforcement Section from the beginning of an investigation through its conclusion. It excludes cases assigned by a U.S. Attorney’s Office to District Fraud Counsel without Fraud Division supervision. Counsel should establish who is supervising the matter before relying on the directive (Directive 26-12, pp. 2–3 & n.2).
An insider reporting first does not always close the door
The directive calls for policies encouraging whistleblower reports, including reports from people involved in the misconduct. It also requires prosecutors to follow DOJ’s Corporate Enforcement and Voluntary Self-Disclosure Policy (Directive 26-12, pp. 4–5).
That disclosure policy contains an exception worth checking before assuming a company has lost its chance to avoid prosecution. Under the Corporate Whistleblower Awards Pilot Program exception, an insider may report both internally and to DOJ before the company reports. The company can still qualify for a declination if it reports as soon as reasonably practicable, no later than 120 days after receiving the internal report, and satisfies the other disclosure and declination requirements (Corporate Enforcement and Voluntary Self-Disclosure Policy, Appendix B).
The 120 days are an outside limit, not a waiting period. Counsel needs to establish when the company learned of the conduct, when it received the internal report, and whether it meets the exception’s conditions.
Before the next meeting with DOJ, identify the decision you want the government to make and the facts that support it. In a qui tam case, explain why dismissal serves the government’s interests. In a corporate investigation, address the conduct and circumstances prosecutors have been instructed to weigh. A reference to the new policies can start that conversation.
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