The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
THE UNITED STATES OF )
AMERICA and THE STATES OF )
CALIFORNIA, DELAWARE, )
ILLINOIS, INDIANA, )
MASSACHUSETTS, MINNESOTA, )
MONTANA, NEVADA, )
NEW JERSEY, NORTH CAROLINA, )
RHODE ISLAND, VIRGINIA, )
ex rel. TRACY SCHUTTE and )
MICHAEL YARBERRY, )
)
Plaintiffs, )
)
v. ) Case No. 11-CV-3290
)
SUPERVALU, INC., SUPERVALU )
HOLDINGS, INC., FF )
ACQUISITIONS, LLC, )
FOODARAMA, LLC, SHOPPERS )
FOOD WAREHOUSE CORP., )
SUPERVALU PHARMACIES, INC. )
ALBERTSON’S LLC, JEWEL OSCO )
SOUTHWEST LLC, NEW )
ALBERTSON’S INC., AMERICAN )
DRUG STORES, INC., SHAW’S )
SUPERMARKET, INC., STAR )
MARKET COMPANY INC., JEWEL )
FOOD STORES, INC., and AB )
ACQUISION LLC, )
)
Defendants. )
OPINION AND ORDER
SUE E. MYERSCOUGH, U.S. DISTRICT JUDGE:
Before the Court are Defendants’ Motion for Reconsideration,
Relators’ Response and Defendant’s Reply. (d/e 439, 440, 441). For
the following reasons, Defendants’ Motion (d/e 439) is DENIED.
BACKGROUND
On September 30, 2024, the Court granted partial summary
judgment in favor of the Relators on the issue of materiality. (d/e
427). On the same date, the Court also granted Relators’ Motion
Requesting the Court Exercise Supplemental Jurisdiction over State
Law Claims. (d/e 438). Relators are now proceeding with claims
pursuant to the federal False Claims Act and two state law claims
under the California False Claims Act and the Illinois False Claims
Act. (d/e 437, 438).
On October 11, 2024, Defendants filed a Motion for
Reconsideration of this Court’s September 30, 2024 Order and
Opinion, granting partial summary judgment in Relators’ favor. (d/e
437). Defendants argue that this Court erred by granting summary
judgment as to materiality by shifting the burden of proof on
materiality to SuperValu and by relying on a per se materiality
standard that Garbe does not support. (d/e 439, p. 3). Defendant
moves this Court to reconsider its prior order, or alternatively,
Defendants request the Court certify its September 2024 Order for
an interlocutory appeal as to the ruling on materiality. Id. at p. 8.
On October 25, 2024, Relators filed their response arguing
Defendants’ motion advances arguments, authorities, and caselaw
that have been considered and denied. Further, Relators argue that
this Court should not permit an interlocutory appeal as Defendants
do not meet the necessary requirements.
ANALYSIS
I. Defendants’ Motion for Reconsideration is Denied.
Motions to reconsider “serve a limited function: to correct
manifest errors of law or fact or to present newly discovered evidence.
Caisse Nationale de Credit Agricole v. CBI Indus, Inc., 90 F.3d 1264,
1269 (7th Cir. 1996). Reconsideration is not appropriate for
rehashing arguments or raising new matters that could have been
heard during the pendency of the previous motions. Id. at 1270.
Defendants raise two arguments for reconsideration. First, the
Court incorrectly articulated the burden of proof for summary
judgment. Defendants point to the language the Court utilized in its
analysis and its use of the word “some” and “could” when describing
evidence and factfinder. Defendants argue that the Court articulated
a different burden of proof in utilizing this language. Further, given
the Court analyzed the evidence presented by SuperValu, that
analysis is indicative of a factual dispute on materiality and a jury
should consider this question.
The Court, in its Opinion and Order, provided an overview of
the parties’ arguments in support of and against summary judgment.
In doing so, the Court described the evidence presented by the
parties, including that SuperValu provided evidence “some payors
may have known” about price matching. However, the Court made a
specific distinction in its finding that there was no evidence presented
that payor knew claims submitted were false in that the usual and
customary price was inflated.
The Court has not confused the summary judgment standard.
The Court emphasized that while both parties provided ample
evidence, none addressed whether the payors knew that price
matching was occurring and resulting in false claims - thus affecting
the usual and customary price and continued payment. The Court
applied the correct summary judgment standard and found Relators
were indeed entitled to summary judgment on the issue of materiality
considering both Garbe and Escobar.
To the extent Defendants argue that the burden has shifted to
the Defendants solely by utilizing the words “some” and “could” is
also incorrect. The Court evaluated each party’s motions for
summary judgment, provided information about various pieces of
evidence, and found that Relators met their burden because there
was no evidence that payors knew claims submitted were false and
continued to pay Defendants. This analysis specifically considered
the effect on the likely or actual behavior of the recipient of the alleged
misrepresentation.
Defendants second argument for reconsideration is the Court
relied on an incorrect legal premise. Specifically, the Court
misapplies the holding in Garbe, finding that a misstatement
regarding the collection of more money than actually owed was
sufficient to establish materiality.
Defendants’ arguments are a restatement of those previously
before the Court. The Court evaluated these arguments at the
summary judgment stage and found them unpersuasive and found
Garbe, which evaluated a similar set of circumstances as here,
controls. Although Defendants have again argued that this holding
and this Court’s application is impermissible according to Escobar,
this Court disagrees. The Court evaluated the arguments presented
by the parties, and in reading Garbe, found that the misrepresented
prices here were capable of influencing the decision-making body to
which they were addressed, namely the payors at issue.
The arguments by the parties are similar, if not identical, to
those previously made and have provided no controlling case law that
has been ignored by this Court. The Court, therefore, declines to
reconsider its determination on materiality in its September 30, 2024
Order. Defendants’ Motion for Reconsideration (d/e 439) is,
therefore, denied.
II. Defendants’ Motion for Interlocutory Appeal is Denied.
Defendants ask the Court to certify an interlocutory appeal of
its September 2024 Order granting Relators’ Motion for Summary
Judgment as to Materiality. Defendants seek certification pursuant
to 28 U.S.C. § 1292 to determine whether: a claim for more money
than is actually owed is sufficient to establish materiality as a matter
of law under the holistic and demanding standard of Universal Health
Servs., Inc. v. United States ex rel. Escobar, 579 US. 176 (2016). (d/e
439, p. 10).
Defendants move for this relief under 28 U.S.C. § 1292(b), a
narrow exception to the general rule that a party may only appeal
when the court “shall be of the opinion that such order involved a
controlling question of law as to which there is a substantial ground
for difference of opinion and that an immediate appeal from the order
may materially advance the ultimate termination of the litigation.” 28
U.S.C. § 1292(b).
Certification under § 1292 requires four criteria be met: (1) there
must be a question of law; (2) it must be controlling; (3) it must be
contestable; and (4) its resolution must promise to speed up the
litigation. There is also a statutory requirement that the petition must
be filed in the district court within a reasonable time after the order.
Arenholz v. Board of Trustees of the Univ. of Illinois, 219 F.3d 674,
675 (7th Cir. 2000).
All of the statutory criteria must be satisfied for an order to
qualify for immediate appeal. Id. Defendants fail to satisfy the
requirements regarding a question of law and speeding up the instant
litigation. A question of law is a “question of the meaning of a
statutory or constitutional provision, regulation, or common law
doctrine” and should be “something the court of appeals could decide
quicky and cleanly without having to study the record.” Id. at 677.
Here, Defendants ask whether a claim for more money than is
actually owed is sufficient to establish materiality as a matter of law
under Escobar. This issue would require the Seventh Circuit to
examine the record in this case, the record of the Garbe case, and
analyze the Escobar case to decide whether this Court should have
denied Relators’ Motion for Summary Judgment on the issue of
materiality. Because Defendants seek to appeal the Court’s
application of the relevant facts to the Escobar standard, Defendants
claim does not fit the standard under Section 1292(b).
Additionally, this Court is not persuaded that the resolution of
the question presented by the Defendants promises to speed up the
litigation or advance the ultimate termination of this matter. Rather,
this case has been ongoing for approximately 13 years at this
juncture and, whether the Seventh Circuit answers Defendants’
question in the affirmative or not, that will not dispose of this matter
entirely. Indeed, it will again provide a limited answer on one element
in what is a complex case with many moving parts. Allowing an
immediate appeal will serve only to delay this matter further, and,
although counsel for the Defendants indicates that an answer from
the Seventh Circuit may obviate the need for a retrial, that does not
promise to speed up the litigation.
Although counsel for the Defendants provide case law in
support of certifying an interlocutory appeal where it would dispose
of the entire litigation, that is not the case here. Rather, at best, one
element of the False Claims Act would be ruled on by the Seventh
Circuit. This would still require trial on the other elements of the
False Claims Act and the other claims that remain.
As a result, the Court declines to certify its September 30, 2024
Opinion pursuant to 28 U.S.C. § 1292(b).
CONCLUSION
In ruling on the prior Motions for Summary Judgment, this
Court utilized voluminous case law, facts, and evidence. Ultimately,
the Court found Realtors met their burden as to materiality.
Defendants’ Motion for Reconsideration advances similar arguments
regarding Garbe and its application to this matter both here and in
their briefing for summary judgment. Further, Defendants have not
met the criteria to certify the Court’s September 2024 Order for
immediate appeal. Therefore, Defendants’ Motion for Reconsideration
(d/e 439) is DENIED.
IT IS SO ORDERED.
ENTERED: November 18, 2024.
FOR THE COURT
/s/ Sue E. Myerscough____________
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE