United States: DOJ lifts restrictions on the use of agency guidance documents in civil proceedings
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A recent lawsuit by the Department of Justice (“DOJ”) repeals two prior policies (commonly referred to as the Brand Memo and Sessions Memo) that restricted the federal government’s use of regulatory guidance documents in civil enforcement proceedings against private companies and individuals.
The new DOJ policy set out in the Garland Memo deals with “agency guidance,” defined as any “statement of general applicability issued by an agency to inform the public of its policies or legal interpretations” that often in the form of “interpretative memoranda and manuals, statements of principle, generally applicable statements and other similar materials.” Internal policies and guidelines or litigation filings. âThe Brand and Sessions memos had mandated that DOJ attorneys would not rely solely on such guidance documents as the basis for affirmative civil enforcement action Limitations arose from concerns about backdoor regulation without a public rulemaking process and the unfairness of, for example, alleging in a False Claims Act (“FCA”) lawsuit that a defendant was “knowingly” breaking the law rather than the alleged “law” “was violated is only part of a subordinate regulatory guideline, such as a provider manual.
The new Garland Memo claims that these earlier borders were “overly restrictive” and “created collateral disputes and were otherwise impeded” [DOJ] Lawyers when it comes to litigation involving relevant government guidance. âWhile they admit thatâ guides don’t bind the public, âthey don’t haveâ the power and effect of laws âandâ an agency guideline alone never forms the basis for an enforcement action, “the Garland Memo nevertheless authorizes the DOJ to make greater use of the instructions in court. Now in particular”[t]o to the extent that guidance documents are relevant to claims or defenses in litigation, [DOJ] Lawyers are free to refer to or rely on such documents in any FCA matters or those affecting the wide range of other laws enforced by the DOJ.
The full practical impact of the new policy remains to be seen. In the years since the previous memos were published, defendants in FCA investigations have often urged not relying on such subordinate regulations, but the government has tried to use them to show that a defendant knew they were against violate a certain law. Certain courts have ruled that the government cannot demonstrate this element of an FCA claim using subordinate regulatory guidance.
In the future, healthcare providers, life science companies, government contractors, and others faced with government enforcement or litigation can expect the DOJ to make increasing use of guidelines, and defendants should be willing to explain why such guidelines are not legally binding Set standards.
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