Two whistleblowers urged the U.S. Supreme Court to revive their False Claims Act suit against SuperValu Inc. alleging that it overcharged federal healthcare programs for prescription drugs.

The U.S. Court of Appeals for the Seventh Circuit rejected the suit, ruling that SuperValu didn’t knowingly misreport the usual and customary prices it charged, which caused Medicare and Medicaid to overpay. An FCA suit lacks scienter if a defendant’s conduct falls within an objectively reasonable interpretation of the law, the Seventh Circuit said.

This ruling gives contractors “a license to defraud myriad government programs as long as they can find any way ...

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