Seafood Industry Whistleblowers Protected Under False Claims Act

Date Published:

It seems that red snapper might be adulterated and labels might not be accurately indicating the actual fish in the packages consumers are purchasing.

The nonprofit ocean protection group, Oceana, conducted a large study of fish purchased and genetically tested in 12 areas of the United States, explained The New York Times. Of the 120 so-called red snapper packages bought for nationwide testing, some 28 different fish species were found. Of these, noted the Times, 17 were not even in the snapper family, citing the study released today.

While grocery stores were the likeliest to honestly sell red snapper and restaurants ranked in the middle, sushi bars—in every city studied—were the likeliest place in which consumers would be misled, said the Times. About one-third of the fish sampled was incorrectly labeled, with a total of 1,215 samples purchased and tested from 2010 to 2012 being mislabeled. The study’s chief author, Kimberly Warner, noted that, given the sheer number of fish in the sea, many look alike. “Even a relatively educated consumer couldn’t look at a whole fish and say, ‘I’m sure that’s a red snapper and not lane snapper,’” Warner told the Times.

Southern California residents were the likeliest, of all of the regions sampled, to be eating a different fish than expected, said the Times. In fact, more than half—52 percent—of the samples purchased and tested—were not what their packages stated. Although Seattle and Boston tested with the lowest deception rates, both areas tested with a 20 percent rate of deception. Some fish deceptions where higher by region, for instance, so-called tuna in New York was actually not tuna in 94 percent of the cases, the Times noted.

The Oceana study did consider a fish mislabeled if the seller followed federal re-naming guidelines. For instance, “orange roughy” is, in fact, “slimehead,” and “Chilean sea bass,” is “Patagonian toothfish,” the Times explained. Yet, after accounting for allowable renaming, the study discovered that mislabeling is quite insidious with retail outlets using names they perceive will make the fish more marketable. One common pattern, Warner told the Times, was that tilapia was often served in restaurants as a substitute for more expensive fish.

The research found that nearly two-thirds of all “wild” salmon sampled was farmed Atlantic salmon, a fish, said the Times, that is considered both less healthy and less environmentally sustainable. Also at issue is that some fish, such as fish that accumulates the toxin, mercury, should be avoided by certain groups. In New York, tilefish, known for high mercury content and listed on federal advisory lists, was sold as red snapper in what the study described as “one of the most egregious swaps,” according to the Times.

The trade group, The National Fisheries Institute, issued a statement indicating that reputable members of the seafood community are fighting such fraud, and that it is up to the federal government to “fulfill its mandate,” of enforcing established food regulations, the Times wrote. The study did not indicate where in the food chain the mislabeling occurred and if the mislabeling was deliberate or by misunderstanding.

Because the intent in the pervasive mislabeling is not known, it is important to note that the False Claims Act allows for private persons to file lawsuits providing the government with information about wrongdoing. Under the Act, if a person is found to have knowingly submitted or caused others to submit false or fraudulent claims to the U.S., the government can recover treble damages and $5,500-$11,000 per statute violation. Should the government be successful in resolving or litigating its claims, the initiating whistle blower can receive 15-25 percent of the amount recovered. Should the government decline to join the case, the lawsuit may proceed privately, and the whistleblower will be entitled to a 25-30 percent recovery reward.

Under the False Claims Act, companies are not allowed to retaliate against a whistleblower. An employee who is discharged, demoted, suspended, threatened, or harassed for filing a whistleblower lawsuit can bring an action for re-instatement with his/her seniority restored and is also entitled to recover double back pay with interest and other compensatory damages. Whistleblowers may also initially report fraud anonymously by filing a claim through an attorney. The whistleblower’s identity remains under seal while the Justice Department investigates the case and, should the government choose not to pursue the case, the firm will never know the identity of the whistleblower, unless the claim is privately pursued.