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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

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The False Claims Act (FCA), 31 U.S.C. § 3729, et seq., authorizes whistleblowers (known as relators) to file federal lawsuits (known as qui tam actions), on behalf of the United States, alleging fraudulent claims for federal funds. Once a qui tam action is filed, the Department of Justice (DOJ) has at least 60 days, as extended with court approval, to investigate the allegations and decide whether to (1) intervene and take responsibility for litigating the case; (2) decline intervention and allow the relator to proceed with the litigation with some level of government supervision; or (3) dismiss the action, even over the relator’s objection.

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DOJ typically takes far longer than the prescribed 60 days to investigate a relator’s allegations. The FCA gives DOJ a set of investigative tools — e.g., Civil Investigative Demands (CIDs) for documents, sworn testimony and answers to interrogatories — to develop facts and determine whether a qui tam action has merit and whether it is in the government’s best interests to take over the case. The processes for issuing CIDs, and receiving and reviewing responses, are time-intensive. DOJ must not only evaluate the merits of a relator’s allegations, but determine whether dismissing a qui tam action may be appropriate because, among other things, the case is duplicative of other investigations and litigation, interferes with an agency’s policies, programs or priorities, risks creating bad law for the government or involves discovery burdens that outweigh potential recoveries. As a result, the average FCA investigation lasts a year or more — and can sometimes take years — before DOJ reaches an intervention decision.

DOJ’s perspectives on qui tam investigations and relator-led litigation may be changing. On May 27, 2026, DOJ’s Civil Division circulated a <a href="https://www.justice.gov/opa/media/1442566/dl">memo</a>, including to all Assistant U.S. Attorneys handling False Claims Act (FCA) cases, to <a href="https://www.justice.gov/opa/pr/civil-division-moves-fast-track-benefits-fraud-enforcement">prioritize and fast-track</a> the investigation of FCA whistleblower cases that involve allegations of fraud on federally-funded benefits programs administered at the state level. DOJ’s guidance applies to a host of FCA cases involving a multitude of federally-funded programs, including health care (Medicaid, CHIP), income security (SNAP, TANF), housing assistance (CDBG) and elementary and secondary education (Title I) programs. Under DOJ’s guidance, government attorneys will “to the maximum extent practicable” make an intervention decision no more than 120 days after a covered qui tam case is filed. DOJ gives that 120-day period teeth by requiring higher-level internal approvals for additional extensions of time.

The memo makes a clear push for more relator-led litigation and directs government attorneys to expedite that decision by considering specific factors, including: whether, assuming the relator’s allegations are true, the conduct violates the FCA; whether the relator supports the allegations with inside information, data analytics, or “agency information”; whether the amount of potential damages is below $10,000,000.00; and whether the allegations involve aggravating factors (i.e., beneficiary harm, ongoing fraud, or concealment and deceit).

Here’s what we’re watching as DOJ implements its new policy:

Changing Perspectives on Relator-Led Litigation We read the policy as marking a shift in how DOJ traditionally viewed relator-led litigation. While the FCA’s investigation period is not intended as a substitute for full-blown civil discovery, DOJ often treated it that way and used CIDs to carefully comb cases for pitfalls that could prejudice the government’s policies — and its positions in pending and future cases — if the qui tam action continued. The fast-track policy for benefits fraud cases reflects that DOJ may view relator-led litigation with less skepticism and with a greater tolerance for the risk of potentially poor outcomes.

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Pleading and Materiality Standards as Gatekeepers Federal Rule of Civil Procedure 9(b) requires heightened specificity for pleading fraud. These heightened standards apply to the “materiality” element of an FCA claim; that the alleged noncompliance or false statement would have affected an agency’s decision whether to award federal funds or pay a claim. The Supreme Court identified several factors relevant to the materiality analysis, which the Court and the Sixth Circuit describe as a “rigorous” and “demanding” inquiry. DOJ, with direct access to federal agencies, is often in the best position to make and support materiality allegations in an FCA case. With DOJ’s support for increased relator-led litigation, we will be watching to see whether and how the government works with relators and how relator-led litigation fares under these heightened pleading standards at the outset of litigation.

Discovery Issues The government occupies a strange position when it declines to intervene in a qui tam action. The government remains the real party in interest with modest procedural rights under the FCA but is not an actual party to the litigation. As a result, relators and defendants must treat the government as a third party for discovery by, for example, serving subpoenas for evidence under Federal Rule of Civil Procedure 45 and understanding and following an agency’s specific Touhy regulations to request information and testimony from government employees. With DOJ’s push for more relator-led litigation, we expect to see an uptick in discovery requests to and discovery disputes involving the federal government in qui tam actions. We will be watching to see how those disputes play out and how the landscape of government discovery changes.

Warner attorneys — with substantial experience prosecuting and defending FCA cases — know what to expect, in terms of timing and investigative strategy, in defending qui tam actions. Please contact <a href="https://www.wnj.com/people/adam-b-townshend/">Adam Townshend</a>, <a href="https://www.wnj.com/people/madelaine-c-lane/">Madelaine Lane</a>, or your Warner attorney if you have any questions.

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DOJ Announces New Priority Fast-Track for False Claims Act Cases Involving State-Administered Benefits Programs

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DOJ Announces New Priority Fast-Track for False Claims Act Cases Involving State-Administered Benefits Programs

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