No “Cause” for Concern: Despite Supreme Court Setback, Trial Jury Vindicates SuperValu

In June 2023, FCA practitioners around the country became familiar with U.S. ex rel. Schutte v. SuperValu Inc., when the Supreme Court issued its opinion in that case. As Qui Notes readers will recall, the Court held that scienter under the FCA is based on a defendant’s subjective intent — i.e., what the defendant actually thought at the time it submitted any allegedly false claims, rather than any other objectively reasonable interpretations of its obligations that might be later argued. While FCA practitioners have been discussing the various potential implications of that decision, the parties in that case continued to litigate and went to trial. Despite the arguably pro-relator ruling in the Supreme Court, the trial jury deliberated for just over two hours before ultimately vindicating the defendants in a notable “split decision” verdict.

The relators had alleged that SuperValu, a grocery chain, falsely reported “usual and customary” Medicare Part D prescription drug prices to the government, causing the government to overpay because it didn’t account for the prices of drugs that it provided under its “price match” program, which became its de facto prices. SuperValu initially argued that it lacked the necessary scienter, because an objectively reasonable interpretation of the applicable regulations would not have required it to report these discounts to the government. The Supreme Court rejected that argument. SuperValu then went to trial, arguing that it lacked the necessary knowledge of falsity as defined by the Supreme Court, and that Medicare Part D’s complexities meant that even if SuperValu overcharged for drugs dispensed to Part D beneficiaries, it would not necessarily have caused the government to lose money.

Trial commenced on February 11, 2025 in the U.S. District Court for the Central District of Illinois. The trial judge instructed the jury that the relators could succeed on their FCA claims only if they had proved both that the defendants “knew” they had presented false claims and that the false claims caused damages to the government. On March 5, the jury found that SuperValu is not liable. According to the special verdict form, although the jury determined that SuperValu knowingly submitted false claims, it found that those submissions did not cause the government to suffer any damages. Thus, despite finding the “essential” elements necessary for FCA liability, the jury found in SuperValu’s favor due to the relators’ failure to prove any causation of damages.

This case demonstrates how persistence can pay off in often-lengthy FCA litigations. The complaint against SuperValu was initially filed in 2011. Despite some setbacks both in the trial court and at the Supreme Court, SuperValu ultimately achieved a successful outcome before the jury.

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© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.