The federal court in Wilmington, Delaware has dismissed a civil action suit against Dongwon Industries — owner of StarKist Co., and StarKist Samoa — and four others, who were accused of using “U.S. citizen straw-people” to fraudulently obtain U.S. fishing vessel documentation and tuna fishing licenses to fish in the exclusive economic zone (EEZ) of Pacific Island Nations for two vessels that are actually Korean owned.

Defendants in the suit include Dongwon, Majestic Blue Fisheries LLC, Pacific Breeze Fisheries LLC, Jayne Songmi Kim and her sister Joyce Jungmi Kim, along with their father Jaewoong Kim.

The two sisters listed as owning the two fisheries companies, i.e. fishing vessels, are the nieces of the Chairman of Dongwon Industries, Jae-Chul Kim, as Jaewoong Kim is his brother. Court documents note that Jaewoong Kim used to be an executive of the South Korean based Dongwon Industries.

The lawsuit was filed in November 2012 by Moore & Company, a Florida based law firm, and included the U.S. government, as plaintiff. The feds, however, declined to intervene in the case.

Plaintiffs claim that the suit arises from false and fraudulent statements made by defendants to the government for the purpose of obtaining U.S. vessel documentation and tuna fishing licenses for two Korean owned and operated purse seiner tuna fishing vessels.

Plaintiffs claim that Majestic Blue and Pacific Breeze are actually owned by Dongwon, a South Korean company.

Defendants sought dismissal of the suit arguing lack of subject matter jurisdiction and failure to state a claim pursuant to Federal Rule of Civil Procedure.

The defendants also argued that through its representation, secondhand knowledge of purported information and allegations outlined in the complaint, Moore & Company brings this action before the court claiming “it has information of fraud against the government”.

However, the defendants assert the lawsuit does not even profess to have any firsthand, inside information of fraud, but instead filed the suit based upon publicly available information and allegations and therefore the complaint should be dismissed under the False Claims Act’s public disclosure bar.

In a 22-page opinion issued early last week, U.S. District Court Judge Susan Robinson agrees with the defense, on a number of issues including that Moore & Company “is not an original source” of information under the FCA.

A footnote in the decision, says the court is “more than a little alarmed” if the conduct of the defendants, as alleged by the Moore & Company “goes uncorrected by the government agencies responsible for oversight of the fishing industry.”

According to court documents, plaintiffs allege, among other things, the defendants “set up sham ownership structures using U.S. citizen straw-people, and fraudulently certified the vessels would be controlled by U.S. citizens. This fraudulent certification allowed defendants to obtain” U.S. certificates, which allowed them to obtain fishing licenses under the South Pacific Tuna Treaty (SPTT).