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"...
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