With Justice Antonin Scalia’s death on February 13, 2016, the U.S. Supreme Court will continue to hear and decide cases with only eight justices. Senate Majority Leader Mitch McConnell, a Republican, has said that the Senate will neither hold hearings nor vote on a replacement for Justice Scalia until after President Obama leaves office on January 20, 2017. Republicans on the Senate Judiciary Committee have echoed McConnell’s position.

The Supreme Court can function with only eight justices. As long as there is a majority of five votes in favor of a particular result, the Court’s rulings will be dispositive. But in close cases, where the Court is split four to four, things are a bit more complicated.

When the Court issues an opinion with only four justices in support, and the other four justices in dissent, it has the effect of affirming the court of appeals’ decision that prompted Supreme Court review in the first place. But the other courts of appeals — and the district courts in those other circuits — will not be bound by the four-to-four Supreme Court decision. To avoid this patchwork approach, the Court may decide to hold off on issuing a four-to-four decision, by waiting for a new justice to be confirmed. Then the Court would re-hearing oral argument on the case, and issue a decision with the full slate of nine justices.

Before the end of the current term, the Supreme Court is set to hear an important case involving the False Claims Act, one that could potentially split the Court four to four. The case is Universal Health Services v. Escobar and involves the “implied certification”  theory of liability under the False Claims Act.

The False Claims Act works by empowering individuals to stand in the shoes of the U.S. government and sue a person or entity that knowingly files a false claim for payment with the U.S. government. They file what is known as a civil qui tam action, in which the whistleblowers acts as “relators” and pursue a fraud claim against the private company. If the federal government recovers money as a result of the qui tam action, either by trial or a settlement, the whistleblowers are awarded a percentage of the recovery.

There are two ways whistleblowers can show that a claim submitted to the U.S. was false. They can show that the claim was factually false like, for example, when a construction company certifies that it used U.S. steel to build a new federal office building but, in fact, used steel from China. Or the can show that the claim was legally false. That happens when a claimant knowingly certifies that it complied with a federal regulation or statute  and compliance was a condition of payment.

Legally false claims may be either express, where the claimant falsely certifies that it is in compliance with regulations. Or it can be implied, where the claimant seeks payment from the federal government without disclosing that it is not in compliance with statutes or regulations affecting eligibility for payment.

In Escobar, a teenage Medicaid patient in Massachusetts sought mental health services at a clinic owned by Universal Health Services. After the patient died, her parents filed a qui tam complaint against UHS charging that the clinic employed mental health counselors who were not licensed, another who did not have the professional degree she claimed, and a nurse who falsely held herself as a psychiatrist and illegally prescribed drugs. 

The parents claimed that when the clinic sought payment from Medicaid for the services provided to their daughter, the clinic impliedly certification that it was in full compliance with Massachusetts’ Medicaid regulations, which require a clinic’s director to ensure appropriate supervision of the clinic’s practitioners. The utter lack of supervision, the parents argued, made the request for Medicaid reimbursement legally false. The First Circuit Court of Appeals ruled in favor of the parents.

The Supreme Court will rule on two issues in Escobar: whether the False Claims Act supports an implied certification theory of liability at all; and if so, whether a claim for reimbursement can be considered legally false if the underlying contract or law does not expressly state that compliance is a condition of payment.

The Supreme Court’s three most recent decisions involving the False Claims Act have all been decided unanimously, which suggests that Justice Scalia’s death will not leave the Court deadlocked in Escobar. But those three decisions all involved an interpretation of a particular term or phrase used in the statute. In Kellogg, Brown & Root v. United States ex rel. Carter, decided in 2015, the Court ruled unanimously that the False Claims Act’s prohibition on a claim when a substantially similar one is still “pending” meant that the first action must still be active in the courts to act as a bar. In United States ex rel. Eisenstein v. City of New York, decided in 2009, the Court unanimously interpreted the False Claims Act to preclude a qui tam plaintiff from relying on certain provisions applicable only to the United States as the plaintiff. And in Allison Engine, Inc. v. United States ex rel. Sanders, issued in 2008, the Court unanimously held that in order to actionable under the False Claims Act, a false statement must be been material to the government’s decision to pay the claim. (Congress didn’t like the Allison Engine decision and amended the False Claims Act in 2009 and 2010 to, essentially, overrule it).

Escobar, on the other hand, does not present a straightforward question of how to interpret a particular term of the statute, but instead raises questions about various theories of how to prove falsity. The federal circuit courts of appeals have developed different approaches for how to answer these questions. The Seventh Circuit Court of Appeals (overseeing federal courts in Illinois, Indiana and Wisconsin) doesn’t recognize the implied certification theory at all. The First (Massachusetts, New Hampshire and Maine), Fourth (Virginia, Maryland, North Carolina and West Virginia) and D.C. Circuit Court of Appeal take a broad view of implied certification. The remaining courts of appeal have limited the implied certification theory to circumstances where the applicable statute, regulation or contracts expressly requires compliance as a condition of payment.

Escobar has attracted a great deal of attention from parties that often find themselves in False Claims Act litigation. More than a dozen organizations representing health care providers and others that receive federal funding have filed “friend of the court” briefs asking the Supreme Court to eliminate or substantially narrow the implied certification theory of liability. Organizations dedicated to fighting government fraud are likely to file “friend of the court” briefs asking the Court to uphold a broad implied certification theory.

Oral argument in Escobar is likely to take place in April. If there is no clear majority for a decision, the Court may hold the case until a new justice is confirmed by the U.S. Senate.