US ex rel. Sargent v. Collins

Court of Appeals for the First Circuit·Decided January 22, 2026·No. 25-1153·Published

Opinion

United States Court of Appeals For the First Circuit

No. 25-1153 UNITED STATES, ex rel. ERIK K. SARGENT, Plaintiff, Appellant,

UNITED STATES, ex rel.,

Plaintiff,

v.

DOUGLAS A. COLLINS, in his official capacity as Secretary of the Department of Veterans Affairs,

Defendant, Appellee,

TRACYE B. DAVIS; TODD STAPLEY, Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE

[Hon. Stacey D. Neumann, U.S. District Judge]

Before

Gelpí, Rikelman, and Dunlap, Circuit Judges.

Cynthia A. Dill on brief for appellant.

Brett A. Shumate, Assistant Attorney General, Craig M. Wolff, Acting United States Attorney, and Michael S. Raab, Charles W. Scarborough, and Maxwell A. Baldi, Attorneys, Appellate Staff, Civil Division, U.S. Department of Justice, on brief for appellees.

January 22, 2026

DUNLAP, Circuit Judge. Plaintiff-Appellant Erik K.

Sargent appeals from the district court's dismissal of his retaliation claim under the False Claims Act ("FCA"), 31 U.S.C. § 3730(h), for lack of subject-matter jurisdiction. Mr. Sargent, a federal employee, sued the Secretary of the Department of Veterans Affairs (the "Secretary") in his official capacity.1 Mr. Sargent alleged that he had suffered on-the-job retaliation at Veterans Affairs Maine Healthcare System after refusing to cooperate with fraudulent acts by his supervisors and reporting those acts. The district court determined, sua sponte, that Congress had not expressly waived federal sovereign immunity for retaliation claims under Section 3730(h), and so "the FCA d[id] not authorize [Mr. Sargent] to pursue his FCA-derived retaliation claim against the United States." United States ex rel. Sargent v. McDonough, No. 1:23-cv-00328-SDN, 2024 WL 5159170, at *2 (D. Me. Dec. 18, 2024). The court thus granted the motion to dismiss. Id. at *4. Upon review, we affirm the district court's judgment and hold that federal sovereign immunity bars Mr. Sargent's retaliation claim under 31 U.S.C. § 3730(h).

1 Mr. Sargent's amended complaint named as a defendant Denis R. McDonough, in his official capacity as the Secretary, but Douglas A. Collins has since assumed the role.

I.

When reviewing a district court's grant of a motion to dismiss, we accept the amended complaint's well-pleaded factual allegations as true. Better Way Ford, LLC v. Ford Motor Co., 142 F.4th 67, 77 (1st Cir. 2025). We also "draw all reasonable inferences in favor of the non-moving party." Id. (quoting Cheng v. Neumann, 51 F.4th 438, 443 (1st Cir. 2022)). "We do not . . . credit legal labels or conclusory statements, but rather focus on the complaint's non-conclusory, non-speculative factual allegations and ask whether they plausibly narrate a claim for relief." Id. (quoting Cheng, 51 F.4th at 443). Applying this familiar standard, we draw the facts summarized below from the amended complaint. A. Relevant Facts Mr. Sargent worked for the Veterans Affairs Maine Healthcare System ("VA Maine"), a local organization of the Veterans Health Administration, which is in turn an agency of the U.S. Department of Veterans Affairs. One of his responsibilities was to approve overtime worked by a family nurse practitioner who performed physical-therapy consults. In August 2021, Mr. Sargent learned that the nurse practitioner had reached her overtime cap for the year and was not eligible for any further overtime unless it was COVID-related -- which the consults were not. Around two months later, Mr. Sargent learned the nurse practitioner had not

been logging on to her computer when she claimed to be performing overtime consults, indicating she had not actually worked overtime.

Knowing these facts, Mr. Sargent's supervisors -- Tracye Davis (the Medical Center Director) and Todd Stapley (the VA Maine Chief of Staff) -- allegedly created and signed a false waiver indicating that the nurse practitioner had worked overtime that was mission essential to COVID, when she had not. This waiver resulted in a payment of approximately $95,000 in unearned overtime compensation, according to Mr. Sargent. Mr. Sargent alleges that he refused to sign the waiver to override the overtime cap and falsely state that the nurse practitioner's overtime claims should be coded as COVID-related. When he subsequently disclosed what he believed was a violation of the law, gross mismanagement of funds and abuse of authority to the VA Office of Inspector General, his employer and supervisors allegedly targeted him with a campaign of harassment and discrimination in retaliation, which included a reprimand and demotion. B. Procedural History Mr. Sargent brought a qui tam action in the federal district court for the District of Maine. On behalf of the United States, he accused his direct supervisors, Ms. Davis and Mr. Stapley, of submitting a false claim and conspiring to commit

a violation of the FCA, 31 U.S.C. § 3729(a)(1)(A)-(C). On his own behalf, he alleged that unspecified "defendants" -- presumably, Ms. Davis, Mr. Stapley, and the Secretary (in his official capacity) -- had retaliated against him in violation of 31 U.S.C. § 3730(h). The government intervened and moved to dismiss the false claim and conspiracy count against Ms. Davis and Mr. Stapley, and the district court granted that motion to dismiss. United States ex rel. Sargent v. McDonough, No. 1:23-cv-00328-LEW, 2024 WL 809902, at *2 (D. Me. Feb. 26, 2024).2 Subsequently, the government moved to dismiss the remaining retaliation count. The government argued that the court lacked subject-matter jurisdiction because Mr. Sargent, as a federal employee, had not availed himself of the exclusive remedies for retaliatory personnel decisions prescribed in the Whistleblower Protection Act ("WPA"), 5 U.S.C. §§ 1214, 1221, 2302(b)(8)-(9), and so could not pursue an FCA-based retaliation claim. United States ex. rel. Sargent v. McDonough, No. 1:23-cv-00328-SDN, Dkt. No. 12 at 4-6 (Mot. Dismiss). On December 18, 2024, the district court dismissed the retaliation

2Because qui tam actions are brought in the name of the United States, the government "may dismiss the action notwithstanding the objections of" the relator as long as the relator "has been notified by the [g]overnment of the filing of the motion and the court has provided the [relator] with an opportunity for a hearing on the motion." 31 U.S.C. § 3730(c)(2)(A).

count, but primarily on a basis different than that briefed by the government.

On its own initiative, the district court determined that because "a judgment against the Secretary [in his official capacity] 'would expend itself on the public treasury or domain,'" Mr. Sargent's suit amounted to "one against the sovereign -- the United States," which "is immune from suit unless it consents to be sued." Sargent, 2024 WL 5159170, at *2 (quoting Dugan v. Rank, 372 U.S. 609, 620 (1963)). Given that such consent "must be unequivocally expressed," the district court considered whether Congress had authorized FCA actions against the government via an express waiver of sovereign immunity. Id. at *2-3 (quoting United States v. Testan, 424 U.S. 392, 399 (1976)). It held that there is no such waiver in the FCA, concluding that "the FCA allows a person to file suit on behalf of the federal government -- not against it." Id. at *3 (quoting Nance v. United States, No. 22-cv-03861, 2023 WL 5211606, at *7 (N.D. Ill. Aug. 14, 2023)). After the court granted the government's second motion to dismiss, this appeal followed.

II.

On appeal, the government argues that the district court lacked jurisdiction under either of two rationales: (1) exclusive channeling -- that is, the government's position that the WPA furnishes Mr. Sargent's exclusive remedies -- and (2) sovereign

immunity. The sovereign immunity inquiry, on which the district court focused, is dispositive, so we do not reach the government's first argument.

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