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U.S. ex rel. Schutte v. SuperValu Inc.

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Supreme Court of the United States
U.S. ex rel. Schutte v. SuperValu Inc.
Term: 2022
Important Dates
Argued: April 18, 2023
Decided: June 1, 2023
Outcome
vacated and remanded
Vote
9-0
Majority
Chief Justice John Roberts • Clarence Thomas • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh • Amy Coney Barrett • Ketanji Brown Jackson

U.S. ex rel. Schutte v. SuperValu Inc. is a case that was decided by the Supreme Court of the United States on June 1, 2023, during the court's October 2022-2023 term. The case was argued before the Supreme Court of the United States on April 18, 2023. It was consolidated with U.S. ex rel. Proctor v. Safeway, Inc. In a 9-0 opinion, the Court vacated and remanded the judgment of the United States Court of Appeals for the Seventh Circuit, holding that the scienter element of the False Claims Act was based on the alleged offender's knowledge and subjective beliefs; it was not based on what an objectively reasonable person would know or believe. Justice Clarence Thomas delivered the opinion of the Court.[1]

HIGHLIGHTS
  • The issue: The case concerned the False Claims Act. Click here to learn more about the case's background.
  • The questions presented: "Whether and when a defendant’s contemporaneous subjective understanding or beliefs about the lawfulness of its conduct are relevant to whether it “knowingly” violated the False Claims Act."[2]
  • The outcome: In a 9-0 opinion, the Court vacated and remanded the judgment of the United States Court of Appeals for the Seventh Circuit, holding that the scienter element of the False Claims Act was based on the alleged offender's knowledge and subjective beliefs; it was not based on what an objectively reasonable person would know or believe. Justice Clarence Thomas delivered the opinion of the Court.[1]



    • United States ex rel. Schutte v. SuperValu Inc. came on a writ of certiorari to the United States Court of Appeals for the Seventh Circuit. Click here to review the lower court's opinion.
    United States ex rel. Proctor v. Safeway, Inc. came on a writ of certiorari to the United States Court of Appeals for the Seventh Circuit. Click here to review the lower court's opinion.

    Timeline

    The following timeline details key events in U.S. ex rel. Schutte v. SuperValu Inc.:

    The following timeline details key events in U.S. ex rel. Proctor v. Safeway, Inc.:

    Background

    U.S. ex rel. Schutte v. SuperValu Inc. and U.S. ex rel. Proctor v. Safeway, Inc. are two cases involving the False Claims Act that have been consolidated for oral argument. The False Claims Act prohibits anyone from knowingly presenting false claims or making false statements to the federal government. The justices were asked to determine to what extent a defendant’s knowledge, understanding, or beliefs about its conduct in regard to the law are relevant to whether it knowingly violated the False Claims Act.[3]

    SuperValu and Safeway are nationwide grocery chains that operate pharmacies within some of their stores. Both have been accused of knowingly making fraudulent claims to the federal government for reimbursement under Medicare and Medicaid programs by reporting retail prices for certain prescription drugs and not accounting for their discount programs.[4][5]

    The United States Court of Appeals for the Seventh Circuit determined that SuperValu and Safeway had not violated the False Claims Act in either case. According to the lower court, the usage of the term knowingly in the False Claims Act does not indicate that the term knowingly has a different meaning than the common law definition, so it could not be shown that SuperValu or Safeway violated the Act.[5][6][7]

    Questions presented

    The petitioner presented the following questions to the court:[2]

    Questions presented:
    • Whether and when a defendant’s contemporaneous subjective understanding or beliefs about the lawfulness of its conduct are relevant to whether it “knowingly” violated the False Claims Act.


    Oral argument

    Audio

    Audio of oral argument:[8]



    Transcript

    Transcript of oral argument:[9]

    Outcome

    The False Claims Act contains a scienter that asks whether the alleged offender knowingly submitted a false claim to the government]. In a 9-0 opinion, the Court vacated and remanded the judgment of the United States Court of Appeals for the Seventh Circuit, holding that the scienter element of the False Claims Act was based on the alleged offender's knowledge and subjective beliefs; it was not based on what an objectively reasonable person would know or believe. Justice Clarence Thomas delivered the opinion of the Court.[1]

    Opinion

    In the court's majority opinion, Justice Clarence Thomas wrote:[1]

    “

    Based on the FCA’s statutory text and its common-law roots, the answer to the question presented is straightforward: The FCA’s scienter element refers to respondents’ knowledge and subjective beliefs—not to what an objectively reasonable person may have known or believed. And, even though the phrase “usual and customary” may be ambiguous on its face, such facial ambiguity alone is not sufficient to preclude a finding that respondents knew their claims were false.[10]

    		”
    —JusticeClarence Thomas

    Text of the opinion

    Read the full opinion here.

    October term 2022-2023

    See also: Supreme Court cases, October term 2022-2023

    The Supreme Court began hearing cases for the term on October 3, 2022. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June.[11]


    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 Supreme Court, "United States et al. Ex Rel. Schutte et al. v. Supervalu Inc. et al. – Certiorari to the United States Court of Appeals for the Seventh Circuit," accessed June 1, 2023
    2. ↑ 2.0 2.1 Supreme Court, "21-1326 UNITED STATES EX REL. SCHUTTE V. SUPERVALU INC.," accessed January 19, 2023
    3. ↑ SCOTUSblog, "Relist-palooza: Religious exercise, the False Claims Act, takings clause, RICO, bank secrecy, and more," January 11, 2023
    4. ↑ SCOTUSblog, "Justices, signaling interest in False Claims Act, are asked to clarify a “knowing” violation," August 26, 2022
    5. ↑ 5.0 5.1 SCOTUSblog, "Court grants review in new batch of cases, including dispute on religious rights of employees," January 13, 2023
    6. ↑ United States Court of Appeals for the Seventh Circuit, "United States ex rel. Schutte v. SuperValu Inc.," August 12, 2021
    7. ↑ United States Court of Appeals for the Seventh Circuit, "United States ex rel. Proctor v. Safeway, Inc.," April 5, 2022
    8. ↑ Supreme Court of the United States, "Oral Argument - Audio," argued April 18, 2023
    9. ↑ Supreme Court of the United States, "Oral Argument - Transcript," argued April 18, 2023
    10. ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    11. ↑ SupremeCourt.gov, "The Supreme Court at Work: The Term and Caseload," accessed January 24, 2022
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