The Wall Street Journal on Friday reported on the ongoing discussions regarding the Granston and Brand memorandums that were released earlier this year and their effect on the False Claims Act. On January 10th, 2018, Michael Granston, the director of the commercial litigation branch of DOJ’s civil fraud section, released a memorandum discussing when the department should or could seek dismissal of “meritless” False Claims Act cases. The memorandum was in response to the increase in False Claims Act cases in the last five years and the resources DOJ spends monitoring those cases. The memorandum spelled out seven circumstances the government has previously used to attempt to dismiss matters including cases that seem legally flawed or frivolous; whistleblowers trying to claim credit on an existing government case, without adding new information; and an agency that supposedly was defrauded says a suit would interfere with its policies or programs.
The second memorandum was released on January 25, 2018 from former Associate Attorney General Rachel Brand. This memorandum prohibits DOJ lawyers from using a failure to comply with guidance issued by other agencies to prove a False Claims Act case. The memorandum was issued as a follow-up to Attorney General Sessions’ November 2017 ban on DOJ issuing guidance documents that create requirements for the public without undergoing notice-and-comment rulemaking.
Plaintiff-side and defense-side whistleblower attorneys have reacted very differently to the two memoranda. Defense side attorneys see the memoranda as new tools for their clients to stave off meritless False Claims Act cases. For example a Gibson Dunn & Crutcher note from February sees the two memos as “presenting substantial arguments for defendants fighting claims under the [False Claims] act.” Defense-side firms see the seven considerations from the Granston memorandum as ammunition for convincing DOJ to drop cases.
Plaintiff-side whistleblower attorneys see the memoranda as carrying less weight. For example, Vincent McKnight of Sanford, Heisler Sharp noted that the seven conditions in the Granston memorandum are already supported by existing law. This implies that DOJ is merely reemphasizing the powers it already has as it tries to deal with the increased numbers of cases filed in recent years. It remains to be seen what the overall effect will be of the two memoranda on False Claims Act enforcement moving forward, however, what is clear is that discussion between plaintiff and defense-side whistleblower attorneys will continue vigorously.
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