On July 1, 2021, the Department of Justice (DOJ) released a memorandum signed by Attorney General Merrick Garland regarding the issuance and use of guidance documents. Addressed to the heads of all DOJ components, the memorandum rescinds two previous DOJ memoranda and outlines the principles governing the DOJ’s revised approach in evaluating guidance documents.
On November 16, 2017, then Attorney General Jeff Sessions published a memorandum entitled “Prohibition on Improper Guidance Documents” (the “2017 Memorandum”). The 2017 Memorandum sought to address instances in which guidance documents published by the DOJ were being used to “effectively bind private parties without undergoing the [notice-and-comment] rulemaking process.” Under the 2017 Memorandum, Attorney General Sessions prohibited publication of guidance documents “that purport to create rights or obligations binding on persons or entities outside the Executive Branch (including state, local and tribal governments).” The 2017 Memorandum directed the DOJ to also adhere to several principles in constructing and publishing guidance documents. These included avoiding the use of mandatory language, specifically noting that voluntary standard non-compliance would not result in enforcement action and including unambiguous statements that published guidance documents were not legally-binding final agency actions.
Following the 2017 Memorandum, then Associate Attorney General Rachel Brand released a memorandum entitled “Limiting Use of Agency Guidance Documents In Affirmative Civil Enforcement Cases” (the “Brand Memo”). The Brand Memo built upon the publication principles outlined in the 2017 Memorandum and extended them to the DOJ’s legal actions, preventing DOJ lawyers from utilizing non-compliance with guidance documents as a basis for filing a civil lawsuit. While DOJ lawyers could still use guidance documents read by a party as evidence that such party had knowledge of a legal mandate, “that a party fails to comply with agency guidance [documents] expanding upon statutory or regulatory requirements does not mean that the party violated those underlying legal requirements.”
In describing the motivations behind rescinding both the 2017 Memorandum and the Brand Memo through this July 2021 memorandum, Attorney General Garland highlighted that the changes initiated as a result of the past memorandums were “overly restrictive,” “have discouraged the development of valuable guidance” and “generated collateral disputes and otherwise hampered [DOJ] attorneys when litigating cases where there is relevant agency guidance.” The Attorney General acknowledged that guidance documents serve a valuable practical and advisory function, helping “collect related statutes, regulations, and other requirements in a single place,” and citing language in the 2019 Supreme Court decision in Kisor v. Wilkie (139 S. Ct. 2400, 2420 (2019)), that such documents are “meant only to ‘advise the public’ of how the [DOJ] understands, and is likely to apply, its binding statues and legislative rules.” It is in this desire to utilize guidance documents as “an important tool to promote transparency, fairness, and efficiency” that the Attorney General sought to revise the DOJ’s existing approach to its publication and enforcement of guidance documents.
DOJ’s new position on guidance documents
Under the 2021 memorandum, guidance documents should be drafted with the understanding that they are not equivalent to the force and effect of law. While guidance documents may continue to “set forth the [DOJ’s] interpretation of binding regulations, statutes, and constitutional provisions,” the source of any such legal requirements must be cited and guidance documents clearly labeled as such. Publication of guidance documents should also occur on public-facing websites in addition to the DOJ’s Online Guidance Portal and contain issuance and revision dates for such guidance documents if applicable.
Furthermore, the 2021 memorandum relies heavily on the language from the Kisor decision in delineating the DOJ’s revised enforcement approach to guidance documents. DOJ attorneys may still utilize guidance documents in situations where the guidance documents are deferred to or serve as persuasive authority. However, in order for an enforcement action to be brought before the courts, there must be a violation of a statutory, legislative or contractual requirement. This is because guidance requirements cannot “impose any ‘legally binding requirements’ on private parties” and thus by themselves cannot be the basis for an enforcement action, according to the Supreme Court’s opinion. (Kisor, 139 S. Ct. at 2420).
The DOJ’s revised approach to guidance documents under the July 2021 memorandum may raise the stakes for companies that find themselves preparing for or currently undergoing FDA and similar regulatory inspections.
Reed Smith will continue to track developments involving this memorandum and its impact on regulated entities. Should you have any questions related to this, please do not hesitate to reach out to the health care attorneys at Reed Smith.