UNITED STATES OF AMERICA ex rel. TRACY SCHUTTE v. Supervalu Inc.

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
O N R EMAND FROM THE S UPREME C OURT OF THE U NITED S TATES
Submitted July 5, 2023
Decided July 27, 2023
Before
ILANA DIAMOND ROVNER, Circuit Judge
DAVID F. HAMILTON, Circuit Judge
AMY J. ST. EVE, Circuit Judge
No. 20-2241
UNITED STATES OF AMERICA ex rel.
TRACY SCHUTTE, et al.,
Relators-Appellants,
v.
SUPERVALU INC., et al.,
Defendants-Appellees.
Appeal from the United States District
Court for the Central District of Illinois.
No. 11-cv-3290
Richard Mills,
Judge.
O R D E R
On August 12, 2021, we affirmed the district court’s grant of summary judgment
in this case, reasoning that the scienter requirement the Supreme Court announced in
Safeco Insurance Co. of America v. Burr, 551 U.S. 47 (2007), for claims under the Fair Credit
Reporting Act, also applied to claims under the False Claims Act (FCA). United States ex
rel. Schutte v. SuperValu Inc., 9 F.4th 455, 465–67 (7th Cir. 2021). The Supreme Court
granted certiorari and on June 1, 2023, held that Safeco’s scienter requirement does not
apply to the FCA. United States ex rel. Schutte v. SuperValu Inc., 143 S. Ct. 1391, 1402–03
(2023). Instead, the Supreme Court held that plaintiffs may establish scienter under the
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1

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No. 20-2241 Page 2
FCA by showing that defendants “(1) actually knew that their reported prices were not
their ‘usual and customary’ prices when they reported those prices, (2) were aware of a
substantial risk that their higher, retail prices were not their ‘usual and customary’ prices
and intentionally avoided learning whether their reports were accurate, or (3) were aware
of such a substantial and unjustifiable risk but submitted the claims anyway.” Id. at 1404
(citing 31 U.S.C. § 3729(b)(1)(A)). The Supreme Court vacated the judgment of this court
and remanded for further proceedings. Pursuant to Circuit Rule 54, the parties took the
position that we should vacate the July 2, 2020, judgment of the district court and remand
for further proceedings in light of the Supreme Court’s clarification of the proper scienter
standard.
We agree with the assessment of both parties. We thus VACATE the judgment of
the district court and R EMAND to the district court for the Central District of Illinois for
further proceedings in light of the Supreme Court’s opinion in Schutte. Further, the
district court relinquished its jurisdiction over the plaintiffs’ remaining state law claims
when it granted summary judgment on the FCA claims. On remand, the district court
should revisit the question of supplemental jurisdiction. See Stockton v. Milwaukee County,
44 F.4th 605, 621 n.4 (7th Cir. 2022).

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