Commercial Litigation Branch Head Outlines DOJ Enforcement Priorities, Reinforces (c)(2)(a) Dismissal Authority

In keynote remarks delivered at ACI’s 13th Annual Advanced Forum on False Claims and Qui Tam Enforcement, Deputy Assistant Attorney General Brenna Jenny discussed the fiscal year 2025 False Claims Act statistics and US Department of Justice enforcement priorities for 2026. While Jenny’s emphasis on certain priorities signals the trends expected to continue steadily or increase in the coming year, also notable was her emphasis on a renewed commitment by DOJ to exercising its authority to seek dismissal of lawsuits filed by qui tam relator whistleblowers under 31 USC § 3730(c)(2)(A) in appropriate cases.

Jenny focused on DOJ’s (c)(2)(A) dismissal authority, as defined by the US Supreme Court in the 2023 case of United States ex rel. Polansky v. Executive Health Resources, declaring that “(c)(2)(A) is back.” She reported that while (c)(2)(A) dismissals fell to a rate of only six per year under the prior administration, the current administration in contrast already had exercised that authority 25 times.

Jenny signaled a commitment to considering and exercising this (c)(2)(A) authority in “appropriate cases,” describing the two most likely scenarios as those where the government determines the FCA claim is meritless or where the allegations were previously publicly disclosed or already under investigation by the government.

Jenny also noted that the DOJ under the current administration has and will continue to take action to address relators it feels have brought meritless suits to encourage voluntary dismissal even where it does not choose to exercise its (c)(2)(A) authority. Jenny added that DOJ attorneys are expected to evaluate whether a case should be dismissed each time they make a decision to decline intervention.

While defendants will welcome Jenny’s remarks to the extent they lead to a reduction in meritless cases, it remains to be seen how broadly the administration will define “appropriate” cases for the purpose of exercising this authority. With 1,297 new qui tam matters filed in fiscal year 2025, a rate of even a few dozen (c)(2)(A) dismissals would represent a very small fraction of all cases.

AREAS OF ENFORCEMENT FOCUS

Jenny highlighted four areas of enforcement priority in her remarks, including the ever-present focus on healthcare fraud, which continues to account for the majority of FCA recoveries. But Jenny also lauded the FCA as a flexible tool that is designed to respond to whatever new trends in fraudulent conduct emerge, indicating that DOJ will be poised to continue using the FCA as its primary fraud enforcement tool beyond the priorities she chose to single out.

Healthcare Fraud

Jenny identified several categories of particular note in the healthcare fraud space, all of which are familiar enforcement priorities that DOJ has been highlighting over the past year:

• Medicare Advantage/Managed Care: Beyond a continued focus on chart review practices and kickbacks, Jenny expects that the Centers for Medicare & Medicaid Services will use audit findings—driven by “enhanced” technology—as a basis for referrals to DOJ.
• Pharmaceutical Pricing: Enforcement actions targeting alleged artificial inflation of drug prices will continue to be a DOJ focus in the coming year. Per Jenny, this priority is in line with the current administration’s overall emphasis on lowering prescription drug prices.
• Unnecessary Services/Substandard Care: In emphasizing DOJ’s continued focus on this traditional area of healthcare fraud enforcement, Jenny noted that while the Civil Division’s Fraud Section is separate from the Consumer Protection Branch, the FCA has a role to play in consumer protection by aggressively pursuing violations that jeopardize patient health and safety. In this area, Jenny highlighted priorities around defective medical devices, skin substitutes, and network adequacy for managed care plans.

Trade Fraud

In keeping with the current administration’s focus on tariff policy, Jenny highlighted trade fraud related to the alleged evasion of customs duties or tariffs, principally arising from misclassification of goods, undervaluation of goods, and misstatements of country of origin. Jenny emphasized that qui tam filings in this arena skyrocketed in fiscal year 2025, with a 50% increase and the highest number to date. Jenny also noted that the administration will deploy all tools at its disposal—whether administrative, civil, or criminal—to combat alleged trade fraud, and will not rely solely upon the FCA.

Cybersecurity Fraud

As with trade fraud, Jenny cited a substantial increase in qui tam filings concerning cybersecurity in fiscal year 2025, a trend that is expected to continue. Jenny identified that the primary focus in this space was not data breaches, but rather insider information technology or security professionals alleging that security warnings were ignored by their employers or that national security or sensitive information was improperly stored, leading to alleged false statements regarding compliance with cybersecurity requirements.

Discriminatory Employment Practices

The last area Jenny highlighted as an FCA priority for the coming year was discriminatory employment practices. Jenny stated that companies doing business with the government must do so on fair and equal grounds, leading to currently active DOJ reviews of the hiring, promotion, and compensation practices of contractors and grantees to identify potential discrimination on the basis of race and sex.

DATA AS THE ‘NEXT WHISTLEBLOWER’

Jenny closed her remarks by noting that fiscal year 2025 sustained the recent trend of a substantial number of affirmative DOJ FCA filings, which everyone should expect to continue. Many of these cases were identified using data analytics that can reveal outliers on various metrics that DOJ sees with a high correlation to fraud. Jenny cautioned the audience that “your next whistleblower could be your data.”

KEY TAKEAWAYS

Jenny’s remarks should remind stakeholders that the current administration remains committed to FCA enforcement, including in more traditional areas such as healthcare fraud.

The additional focus areas selected by Jenny do not come as a surprise but rather reiterate priorities that DOJ has aggressively signaled over the past year (and that we have previously reported on) in trade, cybersecurity, and diversity/discrimination issues. Also notable in Jenny’s remarks, however, was her decision to highlight DOJ’s (c)(2)(A) authority where appropriate, which underscores it as a viable advocacy opportunity for defendants in meritless cases.

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