U.S. top court rejects U.S. Foods appeal in overbilling lawsuit

WASHINGTON, April 28 Mon Apr 28, 2014 10:33am EDT

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WASHINGTON, April 28 (Reuters) - The U.S. Supreme Court on Monday allowed class action claims to move forward against U.S. Foods Inc over alleged overbilling of customers.

The court declined to hear the company's appeal of a ruling that allowed the lawsuit filed on behalf of 75,000 of the food distribution company's customers to go ahead.

In August, the New York-based 2nd U.S. Circuit Court of Appeals upheld a district judge's decision to certify the class action claims. Monday's Supreme Court ruling cleared the way for those claims to proceed in lower courts.

The plaintiffs say the company violated the federal racketeering statute by inflating the costs of the food it purchased from suppliers before selling to customers.

US Foods distributes to restaurants, hotels, hospitals, schools and other institutions.

The U.S. government already has made similar claims against the company under the federal False Claims Act. In 2010, US Foods agreed to pay $30 million to settle the case.

In December, Sysco Corp said it intended to purchase the company for $3.5 billion.

The case is US Foods Inc v. Catholic Healthcare West, U.S. Supreme Court, No. 13-873. (Reporting by Lawrence Hurley; Editing by Howard Goller and Lisa Von Ahn)

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