DOJ Memo on False Claims Act Dismissals: Insights from Marlan Wilbanks

A recent Daily Report article highlighted an important memo released by the Department of Justice (DOJ) that outlines new criteria for federal prosecutors when deciding whether to dismiss a False Claims Act (FCA) case in which the government declines to intervene. The memo provides significant guidance on when the DOJ may exercise its authority to dismiss qui tam lawsuits brought by whistleblowers.

Among the legal experts weighing in on the implications of this DOJ policy is Marlan Wilbanks, a leading False Claims Act attorney with a track record of securing multi-million dollar settlements on behalf of American taxpayers. Wilbanks offered his perspective on the DOJ’s stance, stating:

“I believe in the vast majority of FCA cases that our judges and judicial system are competent to make the decision as to which cases do and do not have merit.”

Understanding the DOJ Memo and Its Impact on Whistleblower Cases

The DOJ memo, issued earlier this month, lays out new standards for federal prosecutors to determine when dismissal of a False Claims Act case is warranted. Under the FCA, whistleblowers—also known as relators—can file lawsuits on behalf of the government against entities that commit fraud against federal programs. In these cases, the government has the option to intervene and take over litigation or decline to intervene, allowing the whistleblower and their legal team to proceed independently.

Historically, the DOJ has exercised its dismissal authority under 31 U.S.C. § 3730(c)(2)(A) sparingly, but the new guidance signals a more structured approach to evaluating when the government should move to dismiss a case. This policy shift may have far-reaching consequences for whistleblowers and FCA enforcement, particularly in cases where the government believes a lawsuit lacks merit or poses a risk to its broader enforcement priorities.

Potential Consequences for Whistleblowers and FCA Enforcement

Legal experts and whistleblower advocates are closely examining how this memo could affect FCA litigation. Some key concerns include:

• Increased DOJ Dismissals: If prosecutors follow the memo’s guidance strictly, more qui tam cases could be dismissed before reaching trial. This could discourage whistleblowers from coming forward.
• Judicial Oversight vs. Executive Discretion: The memo raises questions about the balance of power between the judiciary and executive branch in determining the viability of FCA cases. Wilbanks’ statement underscores the belief that courts, rather than DOJ officials, should decide which cases move forward.
• Impact on Fraud Recovery: The False Claims Act has been a powerful tool for recovering taxpayer funds lost to fraud. A shift toward more dismissals could reduce the financial recoveries from FCA lawsuits.

The Role of Whistleblower Attorneys in Protecting FCA Cases

Experienced whistleblower attorneys like Marlan Wilbanks play a crucial role in ensuring strong FCA cases are presented effectively, even in the face of government reluctance. With decades of experience representing whistleblowers, Wilbanks has helped recover substantial sums from fraudulent actors, reinforcing the importance of private enforcement actions when the government chooses not to intervene.

What’s Next?

The long-term effects of the DOJ memo remain to be seen, but whistleblower advocates are urging careful oversight to ensure that meritorious cases are not prematurely dismissed. As FCA litigation continues to evolve, courts, lawmakers, and legal professionals will be watching closely to see how this policy change shapes future whistleblower actions and False Claims Act dismissal.

To read the full Daily Report article and learn more about the DOJ’s position on FCA dismissals, click here.

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• Fill out our consultation form by clicking here.
• Email us at info@wilbanksgouinlock.com.
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This article is for informational purposes only and should not be considered legal advice.

Marlan Wilbanks was featured in a Daily Report article detailing a memo released by the Department of Justice  this month.  The DOJ memo lays out new criteria for federal prosecutors to use when deciding whether to dismiss a False Claims Act case when the government decides not to intervene.  Wilbanks, who has won multi-million dollar settlements on behalf of the American taxpayers over the last decade, said of the memo: “I believe in the vast majority of FCA cases that our judges and judicial system are competent to make the decision as to which cases do and do not have merit”.  Read the full article here.