Ocean Fleet Services and Ocean Harvesters have filed a motion to dismiss a lawsuit that claimed Blacks Harbour, New Brunswick, Canada-based Cooke Inc. violated foreign ownership laws when it acquired Omega Protein in 2017.
The lawsuit, filed in 2021, was recently unsealed after the U.S. Department of Justice declined to intervene. Filed in New York’s Southern District Court by W. Benson Chiles and Chris Manthey, the lawsuit claims Cooke could be liable for up to USD 2 billion (EUR 1.84 billion) in fines for exceeding foreign ownership requirements for domestic U.S. fishing fleets.
Cooke acquired Omega Protein in 2017 and placed ownership of the company’s fishing vessels under Ocean Harvesters – which itself is 80 percent owned by Seth Dunlop, a U.S. citizen and the nephew of Cooke Owner Glenn Cooke. The lawsuit claims the arrangement was illegal and gave Cooke improper control of the company in a deal it concealed from the U.S. Maritime Administration (MARAD).
In a new filing, Ocean Harvesters and Ocean Fleet Services refuted that claim, saying the allegations that MARAD didn’t know about its ownership structure are provably false.
“From the moment we became aware of this case, we have been eager to show that the allegations are inaccurate. Our legal filing underscores several key misstatements from the complaint and offers concrete evidence that they are false,” Ocean Harvesters said.
Ocean Harvesters’ motion to dismiss also said the plaintiff’s claim of a USD 2 billion fine are “demonstrably false,” as only the government can assess penalties of that magnitude “and the government has never done so or attempted to do so here.”
“Instead, after fully reviewing [the] allegations, the government declined to intervene in these proceedings,” the motion states.
Ocean Harvesters’ motion also said the plaintiff’s lawsuit misinterpreted aspects of the deal.
“Stripped of the hyperbolic innuendo, this is a case about entities engaging in a routine business transaction, with the express authorization of a fully informed industry regulator, involving the purchase of fish processing facilities and the sale of fishing vessels,” the motion states.
In the motion, the defendants said documentation used to justify the lawsuit reveals that MARAD was completely aware of every aspect of the transaction and that Cooke, Ocean Harvesters, and Ocean Fleet Services were following federal law.
“The very documents that Relators cite in their complaint make abundantly clear that MARAD received a full and complete disclosure of relevant facts,” the motion states.
The motion also points to parts of the documentation cited in the original lawsuit that clearly state Dunlop worked for Cooke Inc. for five years and that he is related by marriage to family members of Cooke. The presence of that info debunks the lawsuit’s claims that the company concealed the relationship from MARAD, the motion states.
“In other words, the complaint’s central allegation, which is that Defendants never disclosed to MARAD the connections between Seth Dunlop and Cooke Inc., is simply false,” the motion states. “And establishing the falsity of the claim requires the court to look no further than the same documents that Relators repeatedly reference in the complaint.”
The motion to dismiss states MARAD’s approval of the deal was done under the guidance of federal law and Ocean Harvesters has continued to provide proper documentation to the administration each year affirming that it is still majority owned by a U.S. citizen.
“If anything, Relators’ own allegations demonstrate that Defendants were carefully attempting to comply with citizenship requirements,” the motion states.
