The Verdict Is In: SuperValu Wins at Trial Despite Knowingly Submitting False Claims

In 2023, we wrote about the Supreme Court’s decision in United States ex. rel. Schutte v. SuperValu Inc.  interpreting the False Claims Act’s (FCA) scienter standard to require inquiry into a defendant’s subjective knowledge. 598 U.S. 739 (2023). The case subsequently made its way back to the District Court, and on March 4, 2025, a federal jury found SuperValu did not violate the FCA. While the jury determined SuperValu knowingly submitted false claims, the jury also found those false claims did not cause any damages to the government. In this article, we discuss the jury’s findings, revisit the Supreme Court’s SuperValu decision and, most importantly, analyze key aspects of how lower courts have grappled with SuperValu over the past two years.

The Supreme Court’s SuperValu Decision and Scienter

In June 2023, the Supreme Court ruled that liability in FCA suits turns on a defendant’s subjective belief rather than objective belief as to the falsity of the claim submitted to the government. Under the newly-articulated standard, the Supreme Court held that the “knowingly” scienter prong is met if, at the time a claim is submitted, the submitting party subjectively:

• Knew the submitted claim was false;
• Was aware of a substantial risk that a claim violated the FCA and intentionally avoided learning whether or not it violated the FCA; or
• Was aware of such a substantial and unjustifiable risk but submitted the claim anyway.

The SuperValu Verdict

In their complaint, plaintiffs alleged that SuperValu, a grocery chain with in-store pharmacies, violated the FCA because its pharmacies knowingly misrepresented the “usual and customary” (U&C) prices for medications. Plaintiffs claimed SuperValu’s price matching program — which matched competitors’ discounted prices for cash-paying customers — should have been factored into the U&C price because the U&C price is the price typically charged to a cash-paying customer without insurance. Plaintiffs alleged SuperValu charged the government at its retail sticker price, without consideration of its price-matching program pricing, and that doing so resulted in fraudulent claims for inflated reimbursements from federal programs such as Medicare Part D and Medicaid.

Following a lengthy trial, the jury found that, while SuperValu knowingly submitted false claims to the government, plaintiffs failed to prove that the government suffered damage, a requirement to find FCA liability. Defendants successfully persuaded the jury that Medicare customers paid the lower of the U&C price, which the jury determined meant the government failed to prove loss or harm.

Since then, plaintiffs have filed post-trial motions (including a motion for a new trial) that are pending before the court.

Interpreting SuperValu: Motions to Dismiss and Expert Opinions

The Supreme Court emphasized that a facially ambiguous statute does not preclude a finding of scienter under the new subjective standard; for example, scienter is met if a defendant was aware of a substantial risk that a submitted claim is false despite the ambiguous statutory requirements.[1] Unsurprisingly, lower courts post-SuperValu have come out on both sides at the motion to dismiss stage when addressing ambiguous statutes, with significant attention being paid to the specific factual allegations.[2] Given this close attention by the courts to the allegations, we have observed courts exploring the role experts and professionals play in determining scienter at various stages of FCA litigation.

For example, in United States ex rel. Patzer v. Sikorsky Aircraft Corp., the Eastern District of Wisconsin addressed the relevance of expert opinions in light of SuperValu. 722 F.Supp. 3d 839 (E.D. Wis. 2024). The United States alleged Sikorsky breached its contract with the Navy and violated the FCA by subcontracting with its affiliate on a cost-plus-a-percentage-of-cost (CPPC) basis. In deciding the parties’ motions to exclude the expert testimony of certain witnesses, the court noted that SuperValu made an expert’s opinion on industry standards relevant to the defendants’ subjective state of mind.

The court in Sikorsky declined to exclude defense expert witness Patrick McGeehin’s testimony because if, “as McGeehin opines, a typical participant in the government-contracting industry would not have thought that the arrangement was CPPC, then it is more probable that defendants’ witnesses are telling the truth when they testify that they did not think that they had entered into such an arrangement.” The court distinguished McGeehin’s opinion from an impermissible opinion about a witness’s state of mind, highlighting that “McGeehin does not intend to testify that defendants’ witnesses are telling the truth or did not intend to defraud the government, only that their actions were consistent with the state of knowledge within the government-contracting industry.”

In United States ex rel. Sheldon v. Forest Labs., LLC, the District of Maryland determined that Forest Laboratories did not act with deliberate ignorance or reckless disregard when it hired an attorney “to ask [the Centers for Medicare and Medicaid Services (CMS)] to change its regulations because [Forest Laboratories] knew that” CMS’ interpretation of “Best Price” differed from Forest Laboratories’. 2024 U.S. Dist. LEXIS 129331, at *73 (July 23, 2024). The court stated that to the extent the letter sent by Forest Laboratories’ attorney to CMS “discloses Forest’s subjective beliefs regarding the meaning of ‘Best Price,’ it indicates that Forest believed its practice … was consistent with the prevailing understanding of ‘Best Price.’” Furthermore, the court noted that it viewed Forest Laboratories’ “request for clarification” as “precisely the kind of ‘simple inquir[y]’ that Congress intended to encourage.” The court went so far as to say “it would be perverse to attribute deliberate ignorance or reckless disregard to Forest on the basis of a statement it made to CMS in an effort to clarify its obligations regarding the reporting of ‘Best Price.’”

Both Sikorsky and Forest Labs indicate that experts and other professionals can play a role in establishing a defendant’s subjective state of mind. Depending on the case, the use of such experts may help establish or disprove that the defendant had the requisite intent required under the FCA. Thus, companies need to be mindful of when such experts are engaged and how the company responds to their advice.

Conclusion

Ambiguity alone will not save a defendant from FCA liability. Despite SuperValu’s victory on the damages prong, the jury was convinced that, despite the statutory ambiguity, SuperValu in fact knowingly submitted a false claim. Companies must be vigilant when faced with ambiguous statutes as lower courts grapple with SuperValu’s application and should be mindful of when they seek expert advice and how they respond to such advice as they navigate the post-SuperValu world.