Do I have your attention? Okay, forgive me. The headline is a little click-baity. The centerpiece of the Brand Memo – the January 25, 2018 Memorandum by former Associate Attorney General Rachel Brand – is very much alive: DOJ will not treat subregulatory agency guidance as binding legal requirements in False Claims Act (healthcare fraud and other procurement fraud) or other affirmative cases and investigations.

But the headline is also true. In December 2018, DOJ adopted Justice Manual § 1-20.000, entitled Limitation on Use of Guidance Documents in Litigation. The final sentence states that “This section fully implements, clarifies, and supersedes prior Department memoranda on this topic” (emphasis added). That includes the Brand Memo.

Despite this, a number of commentators still cite the Brand Memo as though it is DOJ policy, and with no reference to the Justice Manual. In most cases this is probably shorthand. That said, I have spoken to colleagues who did not know of the Justice Manual’s abrogation of the Brand Memo as recently as this year.

I’m not playing gotcha here. Section 1-20.000 came out just before the holidays, and later than most other provisions of the Justice Manual – the reconstituted United States Attorney’s Manual (USAM) that was the project of former United States Deputy Attorney General Rod Rosenstein. It was easy to miss. The question is, does it matter?

On first blush, the policies appear similar. The Brand Memo states that “Guidance documents cannot create binding requirements that do not already exist by statute or regulation. . . . [T]he Department may not use its enforcement authority to effectively convert agency guidance documents into binding rules.” Similarly, § 1-20.100 of the Justice Manual states that

the Department should not treat a party’s noncompliance with a guidance document as itself a violation of applicable statutes or regulations. The Department must establish a violation by reference to statutes and regulations.  The Department may not bring actions based solely on allegations of noncompliance with guidance documents.”

So does the shorthand many of us use leave anything out of the equation?

You know what? Maybe.

The Brand Memo dictates that “Department litigators may not use noncompliance with guidance documents as a basis for proving violations of applicable law in ACE cases.’…The Justice Manual is different. Section 1-20.100 states that DOJ ‘may continue to rely on agency guidance documents for purposes . . . that do not treat such documents as creating by themselves binding requirements that do not already exist by statute or regulation’ (emphasis added).”

The Brand Memo dictates that “Department litigators may not use noncompliance with guidance documents as a basis for proving violations of applicable law in ACE cases.” I don’t know what that means, but it sounds pretty broad. The only use of “guidance documents” that the Brand Memo expressly permitted was to establish knowledge of legal requirements when the guidance “simply explain[ed] or paraphrase[d] legal mandates.” The entire Memo was less than two pages. This led to substantial disagreements over its true scope.

The Justice Manual is different. Section 1-20.100 states that DOJ “may continue to rely on agency guidance documents for purposes . . . that do not treat such documents as creating by themselves binding requirements that do not already exist by statute or regulation” (emphasis added). The chapter goes on to detail five “specific, but not exhaustive, illustrations of appropriate uses of guidance documents,” including

(1) establishing scienter;

(2) establishing industry standards or government practices;

(3) describing scientific or technical processes;

(4) demonstrating compliance with guidance; and

(5) providing legal or factual context.

It will take time to see how DOJ implements the Justice Manual’s expanded take on the Brand Memo. It may be a distinction without a difference depending on how lower courts interpret and apply Azar v. Allina Health Services, 139 S. Ct. 1804 (2019). But if DOJ simply wanted to put the Brand Memo’s broad prohibitions into the Justice Manual, it could have done so. It chose to expound. Parties to government investigations, and their counsel, should study the Justice Manual and tailor their approach to subregulatory guidance documents accordingly. Subscribe to our blog for further updates and contact our Government Compliance & Investigations group with any questions.

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