Supreme Court Reopens Fraud Suits Against SuperValu, Safeway (1)

The US Supreme Court on Thursday revived two False Claims Act suits filed by whistleblowers alleging that SuperValu Inc. and Safeway Inc. overcharged the government for prescription drugs.

The US Court of Appeals for the Seventh Circuit had rejected the suits for lack of scienter because their pricing arose from a reasonable regulatory interpretation. But the appeals court improperly failed to consider evidence of subjective intent, that the companies believed they were wrongly seeking payments from the government, the Supreme Court said.

The FCA’s scienter element refers to a defendant’s knowledge and subjective beliefs, not what an objectively reasonable person ...