Page:U.S. ex rel. Schutte v. SuperValu.pdf/10

Rh took Safeco to ask whether a defendant’s acts were consistent with any objectively reasonable interpretation of the relevant law that had not been ruled out by definitive legal authority or guidance. This step, the Seventh Circuit held, applied regardless of whether the defendant actually believed such an interpretation at the time of its claims. Only if the defendant’s acts were not consistent with any objectively reasonable interpretation would the court proceed, at step two, to consider the defendant’s actual subjective thoughts. Thus, under the Seventh Circuit’s approach, a claim would have to be objectively unreasonable, as a legal matter, before a defendant could be held liable for “knowingly” submitting a false claim, no matter what the defendant thought.

Turning to the facts here, the Seventh Circuit held that respondents were entitled to summary judgment because their actions were consistent with an objectively reasonable interpretation of the phrase “usual and customary.” Specifically, the court reasoned that the phrase could have been understood as referring to respondents’ retail prices, not their discounted prices—even if the phrase, correctly understood, referred to their discounted prices. It thus did not matter whether respondents thought that their discounted prices were actually their “usual and customary” prices. What mattered, instead, was that someone else, standing in respondents’ shoes, may have reasonably thought that the retail prices were what counted.

We granted certiorari, see 598 U. S. ___ (2023), to resolve that legal question: If respondents’ claims were false and they actually thought that their claims were false—because they believed that their reported prices were not actually their “usual and customary” prices—then would they have “knowingly” submitted a false claim within the FCA’s meaning? Or is the Seventh Circuit correct—that respondents could not have “knowingly” submitted a false claim unless no hypothetical, reasonable person could have thought