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Will DOJ’s False Claims Act ‘Voluntary’ Dismissals Accelerate Under Attorney General Barr?

February 16, 2019 By Alston Government Contracts Team

It has been a few months since the 2015 “Yates Memo” was updated by Deputy Attorney General Rod Rosenstein’s announcement in late November 2018, as reflected by our colleagues in our White Collar Group.  While the principles behind the earlier policy were laudable – objectionable behavior will be deterred better when individual managers are at risk of criminal liability and financial ruin – the revised policy may not have had a sufficient time “in force” to result in actual behavioral modification.  At least from our vantage point of the government contracts industry.  Keep in mind, many False Claims Act civil qui tam cases linger for many years before the consequences are felt and DOJ’s Office of Public Affairs (or the local US Attorney’s Office) issues a press release announcing the prosecution of a senior manager or corporate officer.

Rather than a loosing of the reins, the newest version of enforcement policies shifts back toward greater discretion at the USAO and DOJ line attorney level, at least for civil enforcement. FCA recoveries in 2018 fell from the previous year—a second consecutive year in which this has occurred. With that background, we are interested to see whether the new Attorney General, confirmed this very week, would spur an uptick in FCA dismissals that do not “serve the government’s interest” under the Granston memo, particularly in light of this exchange from Attorney General Barr’s nomination hearing:

SENATOR GRASSLEY:  “Just to show you that there is some forces out there that I’m suspicious about within the Department of Justice, we have a new Department of Justice guidance document out last year known as about the Granston Memo, provides a long list of reasons that the Department can use to dismiss False Claims Act cases. Some of them pretty darn vague, such as preserving — these — these are their words, “Preserving government resources.” Just think of all the mischief those three words can bring.

Of course the government can dismiss, obviously, meritless cases — I don’t argue with that. But even when the Department declines to participate in False Claims Act cases the taxpayer can, in many cases, still recovery financially.

So it’s important to allow whistleblowers to pursue cases even when the Department isn’t able to be involved.

…

In circumstances where the government doesn’t intervene in False Claims cases, if confirmed, will you commit to ensuring the Department doesn’t unnecessarily dismiss False Act (sic) cases?”

AG NOMINEE BARR: “Yes, senator. I will — I will enforce the law in good faith.”

Read the full transcript here. Stay tuned.

Filed Under: Advice to Contractors & Grant Recipients, Defense, Government Contract-Related Investigations and the False Claims Act Tagged With: Attorney General, False Claims Act (FCA), Granston Memo

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This blog is a service of Alston & Bird’s Government Contracts team and provides insights on cases, rules, trends, and latest developments in local, state, and federal government contracting. Our attorney observations include analysis of investigations, litigation, protests and issues affecting present or prospective prime contractors, subcontractors, and grant recipients across various industries.

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