Saving Seafood

Federal Court Dismisses False Claims Act “Whistleblower” Lawsuit Against Ocean Harvesters, Cooke Inc., Omega Protein

Allegations against all defendants dismissed in full

January 6, 2025 — REEDVILLE, Va. — The following was released by Ocean Harvesters:

The United States District Court for the Southern District of New York on Friday dismissed in full the qui tam “whistleblower” lawsuit United States of America ex rel. Chiles and Manthey v. Cooke Inc. et al. brought by relators W. Benson Chiles and Chris Manthey. 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 (FCA), misstated the facts and ignored the law. In granting the companies’ motions to dismiss, the court agreed that the relators’ theory was unfounded and failed as a matter of law.

At issue in the litigation is the companies’ compliance with vessel citizenship laws. For years, federal regulators have repeatedly found Ocean Harvesters to meet the relevant requirements to lawfully engage in commercial fishing activities. Through the lawsuit, the relators attempted to supplant this regulatory regime by substituting their judgment for the considered views of federal officials. In dismissing the lawsuit, the court concluded that the FCA does not permit the relators to do that, as they failed to meet the foundational requirement of even alleging that the companies deprived the U.S. government of money or property.

Separately, the court rejected the relators’ so-called reverse FCA theory, under which they asked the court to step into regulators’ shoes and assess penalties against the companies, notwithstanding the fact that those very same regulators never deemed it appropriate to pursue such remedies. Indeed, as the companies have maintained throughout, their compliance with vessel citizenship requirements meant that there would be no basis to assess any penalties.

Historical Context: Regulatory Compliance and MARAD’s Review
Ocean Harvesters has consistently demonstrated transparency with federal regulators. Beginning in 2020, the U.S. Maritime Administration (MARAD) reviewed Ocean Harvesters documentation and, as reported by Undercurrent News, “found it to be satisfactory and in compliance with fishery endorsement requirements.”

Documentation submitted earlier in the lawsuit by the defendants demonstrated that relevant ownership details were fully disclosed to MARAD, including information regarding the ownership structure. This evidence contradicted the relators’ allegations of improper concealment.

Ocean Harvesters Responds
“We are pleased that the court has dismissed this baseless lawsuit,” said Ben Landry, spokesperson for Ocean Harvesters. “The decision underscores our commitment to full compliance with federal laws and regulations, and vindicates the integrity of our operations. From the outset, we have been transparent with regulators.”

This case was decided by United States District Judge Jesse M. Furman, who has been on the court since 2012.

Gulf Menhaden Population Continues to be Sustainably Harvested, According to Recent Scientific Stock Assessment

November 10, 2021 — The following was released by the Menhaden Fisheries Coalition:

The Gulf menhaden population has once again been confirmed to be sustainably harvested, based on the results of a recently approved stock assessment conducted by NOAA Fisheries biologists and the Gulf States Marine Fisheries Commission (GSMFC). Managers at the GSMFC approved the final assessment at their annual meeting in late October.

The assessment, which is based on data from the Gulf menhaden fishery for 2018-2020, finds that Gulf menhaden are neither overfished, nor are they experiencing overfishing. This confirms the results of the last major Gulf menhaden assessment, released in 2019, which reached the same conclusions about the health of the species.

The assessment document went so far as to state that “In general, there is little risk of overfishing or of being overfished.” This statement truly drives home the point that this is a very healthy stock and responsible fishery.

“This latest assessment continues a long trend of positive information coming out about this fishery, which has long been healthy and sustainable,” said Ben Landry, Director of Public Affairs for Ocean Harvesters, which operates a fleet of menhaden fishing vessels.

“This positive assessment validates that the current Gulf menhaden fishing effort is at a level which is both responsible and sustainable,” said Francois Kuttel of Westbank Fishing.

In addition to its conclusions about the overall state of the Gulf menhaden stock, the assessment also finds several other positive indicators for the species. It found that menhaden abundance was particularly strong in 2018, and that fishing mortality is stable and well below historic highs. These indicators support the overall conclusion that overfishing is not an issue with Gulf menhaden.

Gulf menhaden has been internationally recognized as a sustainable fishery. Since 2019, the fishery has been certified as sustainable by the Marine Stewardship Council (MSC), the most prominent international seafood certification program. Much like this assessment, the MSC certification cited the long-term health of the menhaden population, as well as noting the limited environmental impact of the fishery.

Big debate over tiny fish goes unresolved as Louisiana pogie legislation dies

June 16, 2021 — The effort to create a buffer between Louisiana’s coastline and huge menhaden ships fell flat in the 2021 legislative session, dying last week in a House-Senate conference committee.

Sponsored by Rep. Joseph Orgeron, R-Larose, House Bill 535 initially proposed a half-mile exclusion zone, with wider buffers around some barrier islands. Conservationists and recreational fishers backed the bill, arguing it would provide fragile fish nursery grounds in nearshore habitats more protection from the industry’s 1,500-foot-long nets. Menhaden industry representatives said trawling a half mile farther from the coast could cut their revenue by 20% if captains couldn’t make up that catch elsewhere.

The Senate amended the buffer to an industry-supported quarter mile. Orgeron and the House rejected that June 8, throwing the bill into a conference committee to resolve differences between the two chambers, but the legislative session ended two days later without a report from the committee.

Ben Landry, Omega Protein’s director of public affairs, thinks additional regulation isn’t “biologically necessary,” and that it places undue burden on an industry already navigating natural burdens such as tropical storms and hurricane.

“It’s easy for the environmental groups to say, ‘They can go fish somewhere else.’ That’s really not the case,” Landry said. “User conflicts are inherent, and we try our best to minimize those, but a blanket coastwide ban is not something that we thought … was scientifically supportable.”

Read the full story at NOLA.com

Recreational fishers want Louisiana’s biggest commercial fishery to back off nearshore waters

June 7, 2021 — A small silver fish was the topic of a nearly three hour discussion among fishers, environmental advocates and lawmakers at the Louisiana Capitol this week. At issue was House Bill 535, which would not allow menhaden fishing within a quarter mile of Louisiana’s shore.

Menhaden, also called pogies, are small bait fish caught in the Gulf of Mexico to be sold as animal feed, fish oil and bait. It’s the largest commercial fishery in the state by volume. More than 1.1 billion pounds of menhaden were netted in Gulf waters in 2019, according to the National Oceanic and Atmospheric Administration.

But recreational fishers say that the boats used to catch the fish are coming too close to shore, and red drum and speckled trout are getting caught in their nets. Rep. Joseph Orgeron (R-Larose) introduced the bill at a Louisiana Senate Committee on Natural Resources meeting Wednesday. He said the legislation keeping menhaden fishers at least a quarter mile from shore was an attempt to compromise between pogie fishers, who want to continue to be able to fish closer to shore, and recreational fishers, who want to push the pogie boats a mile offshore.

Menhaden companies in Louisiana said that about 18% of the fish they catch are within a half mile of the coast. Orgeron’s bill initially proposed a buffer zone similar to Texas, but an amendment added to HB 535 during the committee hearing cut the buffer zone down from a half mile from shore to a quarter mile from shore. Still, companies said they would spend more time and money on fuel trying to catch fish further offshore.

The pogie industry has already shrunk because of economic difficulties, said Ben Landry, the director of public affairs for Omega Protein, one of three menhaden processors in the state. “It’s a little disingenuous to hear, ‘Well, they can just go someplace else and catch those fish, or it won’t hurt them,’” he said. Making up the 18% of catch caught in nearshore waters would be “awfully difficult,” he said.

While discussing the bill Orgeron said that a quarter mile buffer zone equates to 1,300 feet, about the distance from the state Capitol to the Mississippi River levee. Landry said that might seem like a small area. “But if I were looking for legislators this is where I’d go,” he said. “This is where menhaden are.”

Read the full story at the Louisiana Illuminator

Pogie ships would be forced farther from Louisiana coastline under bill OK’d by House

May 20, 2021 — After decades under lax regulation, the Louisiana House voted 67-28 Wednesday to require the state’s largest commercial fishery to cast its nets farther from the state’s fragile coastline.

Louisiana waters supplied 40% of the menhaden caught in 2019 across the United States, a catch worth tens of millions of dollars, according to National Oceanic and Atmospheric Administration data. In a given year, the industry’s 180-foot-long vessels and 1,500-foot-long nets ensnare 700 million to 1 billion pounds of the tiny, dart-like silver fish off the state’s shores.

But if House Bill 535 becomes law, Louisiana would forbid menhaden trawling within a half mile of shore, to reduce coastal erosion and limit damage to shallow nurseries of popular game fish species such as redfish and speckled trout. The bill now goes to the Senate. (Here’s how the House voted.)

Menhaden, also known as pogies or shad, are a keystone species in marine ecosystems, providing food for a wide range of larger fish and birds. When caught commercially, the oil-rich fish is ground up into animal feed, health supplements and fertilizers.

In negotiating the latest bill’s text, menhaden industry representatives stood firmly behind a quarter-mile exclusion zone, stating reports from recreational anglers were hyperbolic. Omega Proteins owns two of the three menhaden reduction plants on the Gulf Coast; Daybrook Fisheries owns the other. Louisiana hosts one in Abbeville and one in Empire.

Omega Proteins’ public affairs manager, Ben Landry, said a half-mile exclusion could cut into the industry’s bottom line as almost one fifth of menhaden harvest occurs within a half mile of the coast. That means some could lose jobs.

“I’m not saying some of that won’t be made up outside of that half mile,” Landry said. “But I can’t promise you that. Who’s family around here could face a 20% cut and then be told, ‘Oh, that’s not going to impact you.'”

Read the full story at NOLA.com

ASMFC could reallocate menhaden quota, industry pushes for equity

February 3, 2021 — The Atlantic States Marine Fisheries Commission (ASMFC) will likely look into how the U.S. Atlantic menhaden fishery allocates its quota in 2021.

The commission is considering reallocating the menhaden fishery this year based on Amendment 3. Implemented in 2018, the rule requires the Atlantic Menhaden Management Board to revisit its quota allocations every three years. A letter written by the MFC, which represents some of the largest players in the menhaden fishing industry, is asking the commission to take into account historic catch levels in its deliberations.

Read the full story at Seafood Source

Omega Protein anticipates few COVID-19 impacts to Virginia’s menhaden season

May 7, 2020 — Despite the ongoing COVID-19 pandemic’s widespread impact on the U.S. seafood industry, Reedville, Virginia-based Omega Protein is expecting to have relatively few impacts to the menhaden fishery.

Omega Protein, a division of Blacks Harbour, New Brunswick, Canada-based Cooke Inc., is by-far the largest fisher of menhaden in the U.S. – catching tens of thousands of tons of the species each year. Primarily used for reduction purposes, the species has avoided the economic hardships of premium seafood species, according to Ben Landry, director of public affairs for Omega Protein.

Read the full story at Seafood Source

Virginia will cut its Chesapeake menhaden catch limit under bill passed by state lawmakers

March 2, 2020 — All seven of Omega Protein’s big blue purse-seine boats will head out on the chase for menhaden as usual this spring, but legislation passed by both the House of Delegates and state Senate could mean some will be tied up in their Reedville dock in the late summer and fall.

The General Assembly agreed to give up its authority to set quotas for menhaden and turn the job over to the Virginia Marine Fisheries Commission after the federal government imposed a moratorium. The final vote came Thursday.

That freeze came after Omega exceeded the multi-state Atlantic States Marine Fisheries Commission’s cap on its Chesapeake Bay catch last year.

But federal officials postponed implementing the moratorium until June — that is, a little after the usual May start of the fishing season, when Omega’s fleet mostly operates in the ocean — in order to give the General Assembly time to overturn its quota and authorize the state commission to adopt the multi-state group’s cap.

“This year will be a trial run for us,” Omega spokesman Ben Landry said.

Read the full story at The Daily Press

Omega Protein: New York menhaden law a ‘feel good’ for environmentalists

April 26, 2019 — Omega Protein says it won’t be hurt by a new law that blocks it from fishing for menhaden in New York state waters in order to preserve the forage fish for whales and other wildlife because it never goes there.

Rather, it’s “feel-good legislation for the environmental community, but it will have zero impact on the company’s operations”, commented Ben Landry, director of public affairs for the Houston, Texas-based division of Canada’s Cooke, when called by Undercurrent News Tuesday for a response.

The legislation passed unanimously, 61-0, by New York’s Senate in February (companion bills S. 2317 and A. 2571) went into effect immediately upon being signed by Governor Andrew Cuomo on Thursday. The new law, which was sponsored by Democratic senator Todd Kaminsky and assembly member Steve Englebright, prohibits the taking of menhaden with the use of purse seine nets within three miles of the state’s coast.

Because menhaden are sensitive to oxygen levels in the water and can die off by the thousands when large schools become too confined in one area during hot weather, the law allows the state’s Department of Environmental Conservation (DEC) to issue a temporary order to allow purse seiners to reduce the population.

Read the full story at Undercurrent News

Omega Protein Applauds ASMFC Vote to Not Penalize Virginia for Failure to Adopt Chesapeake Bay Cap

February 8, 2019 — SEAFOOD NEWS — The Atlantic States Marine Fisheries Commission voted to indefinitely postpone a motion that would have found Virginia and its menhaden fishery out of compliance.

The issue of non-compliance stems from the fact that Virginia has not codified a reduced cap on Omega Protein’s menhaden harvest in the Chesapeake Bay, which was slashed by 41 percent in 2017. Omega Protein claims the Bay Cap is not scientifically derived, but rather is a political compromise and a precautionary measure adopted by the Commission. The lack of scientific evidence supporting the cap has been well documented, according to the company.

“Bluntly, we’ve outkicked our coverage with this particular action,” said ASMFC Commissioner Robert Boyles, head of South Carolina’s Marine Resources Division, during the meeting. “The law doesn’t support a non-compliance finding here. That is the hard and fast fact.”

The menhaden fishery is currently being managed sustainably. In its most recent stock assessment in 2017, the Commission found that menhaden is not overfished, nor is it experiencing overfishing. The stock is healthy enough that the Commission raised the coastwide quota each year from 2015 to 2017.

Declaring a healthy fishery non-compliant would have been unprecedented, as noted by NOAA attorney Chip Lynch at the Commission’s August 2018 meeting on menhaden. At that meeting, Mr. Lynch said a non-compliance recommendation would be “the first time ever…that the federal government would receive a non-compliance referral for a fishery that is not overfished and overfishing is not occurring. And there is record evidence from the leadership of the Commission that the measure is not related to conservation.”

“The Commission made the right decision today because the Bay Cap is not ‘necessary for the conservation of the fishery,’ as is required in a non-compliance finding,” said Ben Landry, Director of Public Affairs for Omega Protein. “The Commission’s decision to press pause on this motion signals their acknowledgement that the basis for the reduced Bay Cap was not going to meet federal standards.”

This story was originally published on SeafoodNews.com, a subscription site. It is reprinted with permission.