Second Circuit Upholds Complete Dismissal of All Claims Asserted by Private Relators
REEDVILLE, VA / ACCESS Newswire / August 5, 2026 / The United States Court of Appeals for the Second Circuit today affirmed the dismissal of a False Claims Act lawsuit brought by private relators W. Benson Chiles and Chris Manthey against Ocean Harvesters, Cooke Inc., Omega Protein and other defendants. The lawsuit arose from allegations concerning applications for and the issuance of fishery endorsements under the American Fisheries Act.
In a unanimous opinion, the Second Circuit affirmed the judgment of the United States District Court for the Southern District of New York, which had previously dismissed the relators’ amended complaint in its entirety. The appellate court agreed that the relators failed to state a claim under the False Claims Act and affirmed the dismissal of all four causes of action in the amended complaint.
The Court held that wild fish in public waters do not constitute government “property” for purposes of the False Claims Act. In rejecting the relators’ principal theory, the Court concluded that the absence of a government property interest in wild fish was “fatal to any attempt to assert an FCA cause of action.”
The Court further held that unassessed civil penalties under the American Fisheries Act do not create the type of established payment obligation necessary to support a reverse false claim. The Court found it “abundantly clear from the statutory framework” that such penalties are not self-executing and remain subject to agency discretion.
Based on those conclusions, the Second Circuit affirmed the dismissal of all claims against the defendants.
From the outset of this case, Cooke Inc., Omega Protein and Ocean Harvesters have maintained that the lawsuit, which alleged violations of the False Claims Act, misstated the facts and ignored the law. The district court dismissed the amended complaint, and the Second Circuit has now affirmed that judgment, holding that the pleaded claims failed under the False Claims Act.
“We are pleased that the Second Circuit carefully considered the legal issues and unanimously affirmed the district court’s dismissal of this case,” said Ben Landry, spokesperson for Ocean Harvesters. “This decision confirms what the defendants have maintained throughout this litigation: the claims asserted by the relators did not satisfy the requirements of the False Claims Act. The Court held that wild fish in public waters are not government property under the FCA and that unassessed, discretionary civil penalties do not create an obligation to pay under the statute.”
The Court also affirmed the district court’s denial of the relators’ request to further amend their complaint. The Second Circuit concluded that the relators had unduly delayed in asserting their proposed additional claim, noting that they could have raised it earlier and did not do so until after the district court had warned that no further amendments would be permitted.
The lawsuit was pursued by private relators under the False Claims Act after the United States declined to intervene. The Second Circuit’s decision leaves intact the district court’s complete dismissal of the action.
The case is United States ex rel. Chiles v. Cooke Inc., No. 25-155 (2d Cir. Aug. 5, 2026).
About Ocean Harvesters
Ocean Harvesters owns and operates a fleet of more than 30 fishing vessels in the Atlantic Ocean and Gulf of America. The company’s purse-seine fishing operation is exclusively engaged in the harvest of menhaden, a small, nutrient-dense fish used to produce fish meal, fish oil, and fish solubles. Both its Atlantic and Gulf Menhaden fisheries are certified sustainable by the Marine Stewardship Council. Committed to responsible fishing operations, Ocean Harvesters is proud to be heir to a fishing legacy that extends nearly 150 years.
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SOURCE: Ocean Harvesters
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