United States ex rel. Schutte v. Supervalu Inc., 598 U.S. 739

Relators brought qui tam False Claims Act suits against SuperValu and Safeway, alleging they reported higher retail prices instead of lower customer-discount prices when billing Medicare/Medicaid (contracts/regulations limited reimbursement to the pharmacy’s “usual and customary” price).
Both companies ran discount programs (price-match or membership) after Walmart’s low-price entry; petitioners presented evidence that discounted sales accounted for a large share of cash transactions for many drugs.
Petitioners allege the companies received notices indicating that “usual and customary” meant the discounted prices, believed the discounts were their U&C prices, and took steps to hide or avoid disclosing those discounts.
The district court (SuperValu) found claims false but granted summary judgment to defendants on scienter; the Seventh Circuit affirmed, applying Safeco to adopt an objectively reasonable-interpretation safe harbor before considering subjective belief.
The Supreme Court granted certiorari limited to whether FCA scienter depends on a defendant’s subjective knowledge/belief or instead is defeated whenever an objectively reasonable legal interpretation of the phrase exists.
The Court held the FCA’s scienter is subjective (actual knowledge, deliberate ignorance, or reckless disregard) and vacated and remanded the Seventh Circuit’s judgments.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the FCA’s "knowingly" scienter requires subjective awareness of falsity or is negated if the defendant’s interpretation was objectively reasonable	Relators: "knowingly" is met if defendant actually knew, deliberately avoided learning, or was recklessly indifferent to the falsity of reported U&C prices	Respondents: Safeco requires courts first to find that no objectively reasonable interpretation exists; if one does, subjective belief cannot establish scienter	Court: Scienter is subjective — actual knowledge, deliberate ignorance, or recklessness suffice; facial ambiguity or an objectively reasonable interpretation alone does not negate scienter

Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (interpreted "willfully" under the FCRA; Seventh Circuit relied on it but Court limits its import here)
Universal Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176 (2016) (describes the FCA as largely a fraud statute and guides statutory interpretation)
Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93 (2016) (counsels against importing reasoning from one statute into another; limits Safeco’s reach)
Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) (discusses ‘‘deliberate ignorance’’ as a form of scienter)
Farmer v. Brennan, 511 U.S. 825 (1994) (recognizes objective forms of recklessness but distinguishes subjective awareness)
Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, L.P.A., 559 U.S. 573 (2010) (cautions that common-law terms must be construed in their statutory context)