K&L Gates Secures Second Circuit Victory in Significant False Claims Act Appeal

Global law firm K&L Gates LLP secured a significant appellate victory for Ocean Harvesters and related defendants when the US Court of Appeals for the Second Circuit unanimously affirmed the dismissal of a False Claims Act (FCA) whistleblower lawsuit challenging the companies’ eligibility to harvest menhaden in US waters. The appeal followed the firm's successful efforts to secure the dismissal of the action in the US District Court for the Southern District of New York in January 2025.

The relators alleged that Ocean Harvesters was improperly controlled by a Canadian entity and therefore ineligible under the American Fisheries Act to participate in the US menhaden fishery. The relators claimed that the defendants had fraudulently obtained the right to harvest fish from US waters and that they could face exposure to up to $2 billion in penalties. The district court dismissed the case, concluding that the FCA did not apply because neither fishing licenses nor unharvested fish constitute government property. The Second Circuit affirmed, holding that wild fish in public waters are not government “property” within the meaning of the FCA and rejecting each of the relators’ theories of liability. The court also upheld the district court’s denial of leave to amend the complaint. 

The K&L Gates team was led by Washington, DC partners Rob Silverblatt and Andrew Wright. The decision represents a complete victory for the client and a significant appellate ruling defining the limits of FCA liability, confirming that the statute cannot be expanded to encompass claims involving the harvesting of wild fish in public waters.

“We are grateful that the Second Circuit reiterated important limits on the False Claims Act statute and completely vindicated our client’s position that this case never belonged in court in the first place,” said Silverblatt.