WASHINGTON (CN) — Supreme Court Justice Elena Kagan signaled a win Tuesday for supermarket whistleblowers who say that Supervalu and Safeway fraudulently reported drug prices to bigger reimbursements from the government.
“Your case is the easy case,” the Obama appointee the lawyer for the whistleblowers, noting that both grocery chains seem to have known their price reporting was wrong when they sent it in to the government, a clear violation of the False Claims Act.
What Kagan called easy, however, might perplex others less familiar with scienter, otherwise defines as the intent to deceive or defraud.
When a federal judge entered summary judgment for Supervalu, he did not dispute that store had misreported the drug prices. Because of some ambiguity in price-reporting requirements, however, the court determined that that such misreporting could be chalked up to an objectively reasonable misunderstanding. Pharmacist whistleblowers Tracy Schutte and Michael Yarberry, who could recover three times whatever the government paid because of fraud, appealed to the Supreme Court after a divided Seventh Circuit panel ruled against them.
Tejinder Singh, an attorney with Sparacino who represents the Supervalu pharmacists and former Safeway pharmacist Thomas Proctor, was critical of the lower court's interpretation.
“It treats defendants’ subjective beliefs about the lawfulness of its conduct as irrelevant,” Singh told the justices Tuesday. “This would permit some of the worst...
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