SuperValu is set to face trial on Feb. 10 in Springfield, Illinois, over allegations that it overbilled government health programs for prescription drugs. The case, which has been in litigation since 2011, was revived by a 2023 U.S. Supreme Court ruling that reshaped the legal standard for proving fraud under the False Claims Act (FCA).
The Allegations: Overcharging Government Programs
Two whistleblowers, Tracy Schutte and Michael Yarberry, claim that between 2006 and 2016, SuperValu ran a price-match program to compete with Walmart’s $4 prescription plan. They argue that this became the retailer’s true “usual and customary” (U&C) price, meaning government programs like Medicare, Medicaid, and Tricare should have been charged the discounted rate—not SuperValu’s higher sticker prices.
The lawsuit alleges that by keeping the price-match program hidden from the government, SuperValu wrongfully collected $123 million in reimbursements from federal and state healthcare programs.
SuperValu, however, denies any wrongdoing. The company contends that it believed its standard pricing—not the price-match rate—was the correct “usual and customary” price under the law.
Key Legal Battle: The Supreme Court’s FCA Scienter Standard
The False Claims Act requires proof that a defendant “knowingly” submitted false claims—a legal standard called scienter.
