SCOTUS revives whistleblower lawsuits against Safeway, SuperValue

 July 10, 2023

Supermarket and pharmacy chains SuperValu and Safeway have a new legal battle after the U.S. Supreme Court revived several whistleblower lawsuits against them. 

According to a Fox News report, the high court unanimously decided to revive whistleblower suits in which evidence was introduced that alleges they defrauded Medicare and Medicaid.

"Thursday's decision provides the whistleblowers with a renewed opportunity to pursue their claims of Medicare and Medicaid fraud against SuperValu and Safeway," Fox noted.

The cases revolve around the the federal False Claims Act (FCA), which allows the government and private citizens to sue companies that have submitted false claims to the government, with private citizens able to recover a portion of the money recovered by the government in such cases.

Previously thrown out

The whistleblower lawsuits against SuperValu and Safeway were originally thrown out by the 7th U.S. Circuit Court of Appeals.

Fox News noted:

The 7th U.S. Circuit Court of Appeals dismissed the suits against both companies, holding that their decisions to report the higher prices were "not objectively unreasonable" under the federal False Claims Act.

Justice Clarence Thomas, writing the high court's unanimous decision, wrote that the lower court applied the wrong standard.

"What matters for an FCA case is whether the defendant knew the claim was false," Justice Thomas wrote.

The Epoch Times noted:

The new orders followed the court’s unanimous decision on June 1 to reinstate whistleblower actions against pharmacy operators SuperValu and Safeway for allegedly overcharging the government by filing false Medicare and Medicaid reimbursement claims for prescription drugs they sold.

That ruling, United States ex rel. Schutte v. SuperValu, held that the scienter requirement under the False Claims Act, which asks whether an accused party “knowingly” filed a “false” claim with the government, refers to the party’s knowledge and subjective beliefs, as opposed to what an objectively reasonable person may have believed.

One of the experts for the whistleblower in the Safeway case determined that it made a staggering $127 million more than it would have if the company had reported the discounted price to the government instead of the inflated one.

There's more

The whistleblowers in the revived cases have reportedly amassed evidence that shows executives in the company took actions to knowingly hide the lower, discounted prices from state and federal authorities.

It's unclear how much the whistleblowers stand to recover as part of their portion of the winnings if and when the government recovers the large sums of money.

The Supreme Court did not issue any final rulings in the matter, it only revived the cases so that they can be tried in the lower courts.

Only time will tell if the two companies can prove they're innocent, but it's not looking good for them.

" A free people [claim] their rights, as derived from the laws of nature."
Thomas Jefferson
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