Sharel Farmer v. Eagle Systems and Services, Incorporated; Data Solutions & Technology (dst), Inc.

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-1124
SHAREL FARMER,
Plaintiff - Appellant,
v.
EAGLE SYSTEMS AND SERVICES, INCORPORATED; DATA SOLUTIONS &
TECHNOLOGY (DST), INC.,
Defendants - Appellees.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh. W. Earl Britt, Senior
District Judge. (5:14-cv-00403-BR)
Argued: March 22, 2016 Decided: July 1, 2016
Before WYNN and DIAZ, Circuit Judges, and DAVIS, Senior Circuit
Judge.
Affirmed by unpublished opinion. Judge Wynn wrote the opinion,
in which Judge Diaz and Senior Judge Davis joined.
ARGUED: Ralph Thomas Bryant, Jr., Newport, North Carolina, for
Appellant. Justin N. Davis, MULLEN HOLLAND & COOPER, P.A.,
Gastonia, North Carolina; Jang Hwan Jo, SMITH, ANDERSON, BLOUNT,
DORSETT, MITCHELL & JERNIGAN, L.L.P., Raleigh, North Carolina,
for Appellees. ON BRIEF: Mario White, Clinton, North Carolina,
for Appellant. Kerry A. Shad, SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL & JERNIGAN, L.L.P., Raleigh, North Carolina, for
Appellee Eagle Systems and Services, Incorporated; Nancy B.

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Paschall, MULLEN HOLLAND & COOPER, P.A., Gastonia, North
Carolina, for Appellee Data Solutions & Technology (DST), Inc.
Unpublished opinions are not binding precedent in this circuit.

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WYNN, Circuit Judge:
Plaintiff Sharell1 Farmer contends that he engaged in an
activity protected by the anti-retaliation provision of the
False Claims Act (FCA) when, in the course of an internal
investigation, he reported a single incident of theft of
government property from a warehouse operated by his employers.
Because Farmer’s report of theft was neither “in furtherance of
an action under” the FCA nor an “effort[] to stop” an FCA
violation, 31 U.S.C. § 3730(h)(1), we affirm.
I.
Farmer was employed by Defendants Eagle Systems and
Services, Inc. (Eagle Systems) and Data Solutions & Technology,
Inc. (DST) under a joint contract, and he was supervised by DST.2
Defendants are federal government contractors who jointly
operate a supply warehouse.
In August 2012, Farmer witnessed warehouse supervisor Keith
Armstrong and his assistant steal government-owned night vision
goggles and convey them to a third person. A few days later, at
1 According to counsel, Mr. Farmer’s first name is
“Sharell.” The first name was initially misspelled in the
complaint, and an amended complaint was filed specifically to
correct the error. The lower court docket was never corrected
to reflect the change, however.
2 We accept the facts Farmer alleged in his amended
complaint as true and draw reasonable inferences in his favor in
reviewing this dismissal for failure to state a claim. See E.I.
du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435,
440 (4th Cir. 2011).

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the request of Eagle Systems Project Manager Roy Fischel, Farmer
wrote a statement reporting the theft he had witnessed. After
receiving the report, Fischel disclosed Armstrong—the supervisor
who had committed the theft—the contents of the report and that
Farmer had authored it.
From then until the day Farmer left his employment, he
suffered “persistent and numerous incidences of retaliation,
ridicule, threats, intimidation and harassment.” J.A. 5. His
supervisors isolated him from all other employees, stared at him
threateningly, and issued numerous disciplinary write-ups to him
“for frivolous and baseless reasons.” J.A. 6–7. Although
Farmer tried to get help from the Eagle Systems and DST
management teams regarding the mistreatment, they did not
intervene to stop it. Farmer eventually found this working
environment unbearable and left his job in April 2013.
In July 2014, Farmer filed a complaint alleging, inter
alia, that Defendants violated the anti-retaliation provision of
the FCA.3 Defendants filed motions to dismiss under Federal Rule
3 Farmer also brought a claim for breach of non-delegable
duty under North Carolina common law, a negligence claim under
North Carolina common law, and a North Carolina civil conspiracy
claim. Farmer consented below to the dismissal of the breach of
non-delegable duty claim. On appeal, we affirm the district
court’s dismissal of Farmer’s negligence claim because Farmer
has not cited, and we are not aware of, any North Carolina case
articulating a duty to keep an employee’s identity confidential
during internal investigations—the conduct undergirding this

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of Civil Procedure 12(b)(6). The district court granted the
motions and dismissed Farmer’s claims, mainly on the ground that
the reported theft was not a protected activity under the FCA’s
anti-retaliation provision. Farmer timely appealed.
II.
We review a district court’s dismissal for failure to state
a claim de novo. U.S. ex rel. Rostholder v. Omnicare, Inc., 745
F.3d 694, 700 (4th Cir. 2014). “To survive a motion to dismiss,
a complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).4
claim in Farmer’s complaint. Moreover, the duty of reasonable
care generally applies when an individual’s conduct creates a
risk of “injury to the person or property of the other,” which
cannot be inferred here. See Estate of Mullis by Dixon v.
Monroe Oil Co., 505 S.E.2d 131, 137 (N.C. 1998) (quoting Dail v.
Taylor, 66 S.E. 135, 136 (N.C. 1909)); see also Restatement
(Third) of Torts: Phys. & Emot. Harm § 7(a) (“An actor
ordinarily has a duty to exercise reasonable care when the
actor’s conduct creates a risk of physical harm.” (emphasis
added)). We also affirm the district court’s dismissal of
Farmer’s civil conspiracy claim because, as Farmer concedes,
North Carolina law does not recognize such a claim as an
independent cause of action, see Toomer v. Garrett, 574 S.E.2d
76, 92 (N.C. Ct. App. 2002), and Farmer’s civil conspiracy claim
thus rises and falls with his FCA claim.
4 To state a claim under the FCA’s anti-retaliation
provision, a plaintiff need only satisfy the notice-pleading
standard under Rule 8(a) of the Federal Rules of Civil
Procedure, not the heightened pleading standard of Rule 9(b).

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Congress passed the FCA to discourage fraud against the
federal government by contractors. See Glynn v. EDO Corp., 710
F.3d 209, 213 (4th Cir. 2013). To that end, the statute
includes an anti-retaliation provision to protect
whistleblowers. Id. at 214. That provision prohibits
retaliation against “lawful acts done . . . in furtherance of an
action” under the FCA, and thanks to a 2009 amendment, the
provision also protects “other efforts to stop 1 or more
violations of” the FCA. 31 U.S.C. § 3730(h)(1); see Young v.
CHS Middle E., LLC, 611 F. App’x 130, 132–3 (4th Cir. 2015)
(unpublished). To bring a successful claim under the anti-
retaliation provision, a plaintiff must show three elements:
“(1) he engaged in protected activity, (2) the employer knew
about the activity, and (3) the employer took adverse action
against him as a result.” Smith v. Clark/Smoot/Russell, 796
F.3d 424, 433 (4th Cir. 2015).
At the heart of this appeal is the “protected activity”
element. This Court has held that an act is protected under the
FCA when it “reasonably could lead to a viable FCA action.”
Mann v. Heckler & Koch Def., Inc., 630 F.3d 338, 344 (4th Cir.
2010) (quoting Eberhardt v. Integrated Design & Constr., Inc.,
See Smith v. Clark/Smoot/Russell, 796 F.3d 424, 433 (4th Cir.
2015).

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167 F.3d 861, 869 (4th Cir. 1999)). Although this Court has not
yet articulated the precise scope of FCA-protected activity in
light of the 2009 “efforts to stop” amendment, see Smith, 796
F.3d at 434,5 it is unnecessary to do so here. It is clear that
a single report of theft, without any facts suggesting an
underlying fraud, is not plausibly an act “in furtherance of an
action under” the FCA or an “effort[] to stop” an FCA violation.
31 U.S.C. § 3730(h)(1).
Farmer does not argue, nor could he, that the underlying
theft he reported was an FCA violation. See 31 U.S.C.
§ 3729(a)(1). However, Farmer invites us to consider how his
report of the theft might have indirectly prevented future
fraudulent deliveries to the government. While the speculative
connection Farmer seeks to draw between his report, tighter
inventory controls, and the eventual prevention of an FCA
violation is perhaps possible, Farmer has alleged no facts
making that attenuated connection plausible. See Iqbal, 556
U.S. at 678. In fact, Farmer’s complaint indicates only that an
Eagle Systems manager required him to write a statement
5 Circuit courts have adopted different approaches to the
“protected activity” element in light of the 2009 amendment.
Compare Schell v. Bluebird Media, LLC, 787 F.3d 1179, 1187 (8th
Cir. 2015) (applying the same pre-2009 protected activity test),
with Halasa v. ITT Educ. Servs., Inc., 690 F.3d 844, 847–48 (7th
Cir. 2012) (suggesting that the amended FCA anti-retaliation
provision adds a new category of protected activities).

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reporting the theft and that he complied. The complaint does
not allege facts that can plausibly demonstrate that he acted
“in furtherance of an action under” the FCA or undertook any
“efforts to stop” an FCA violation. 31 U.S.C. § 3730(h)(1).
III.
Even accepting all alleged facts as true and drawing all
reasonable inferences in Farmer’s favor, we cannot conclude that
Farmer’s activity here was protected by the FCA. Therefore, we
affirm the judgment.
AFFIRMED

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