Commercial Litigation Update

The Highlights

• Accelerated FCA Investigative Timeline: The U.S. Department of Justice (DOJ) is taking new steps to implement the directives of Executive Order 14395 of March 16, 2026, “Establishing the Task Force To Eliminate Fraud,” by expediting the review for newly filed False Claims Act (FCA) qui tam actions involving federally funded state-administered benefits programs. The May 27, 2026, memorandum from Assistant Attorney General Brett A. Shumate (“Shumate Memo”) states that all newly filed state-administered benefits program fraud qui tam actions will now be reviewed by DOJ in 60 to 120 days after filing to determine if the government will continue its investigation, permit the whistleblower to proceed, or act to dismiss the case.
• DOJ Reaffirmation of Relator Authority: The Shumate Memo reaffirms DOJ’s position that whistleblowers may “stand in the shoes” of the government and indicates that the agency will let relators lead litigation subject to DOJ’s “oversight and ultimate control.”
• Automatic Criminal and Administrative Referrals: New benefits program fraud qui tam matters will be automatically referred to the Criminal Division and/or the National Fraud Enforcement Division for evaluation of potential criminal violations and to the affected agency for potential administrative action, including payment suspension.