[Editor’s note: This article was originally published on March 31, 2020. The Addendum below was added on April 8, 2020.]
There is plenty of blame to go around for the dire personal, social, and economic costs occasioned by the spread of the novel coronavirus, which currently afflicts most countries in the world. As David Fidler wrote in Just Security last week, the World Health Organization updated the International Health Regulations in 2005 in an attempt to prevent the worst harms from precisely this sort of outbreak. U.S. domestic authorities also prepared plans, including the 2006 National Strategy for Pandemic Influenza promulgated by President George W. Bush and the 2016 Playbook for Early Response to High-Consequence Emerging Infectious Disease Threats developed under President Barack Obama. It seems clear that Chinese authorities failed to adequately report and to contain the spread of this new disease, and that the U.S. Executive Branch botched its response, with highly predictable and deadly results. Private actors may also bear legal responsibility for exacerbating the harms caused by unsafe working conditions, equipment shortages, termination of employment and other contracts, and other problems, which will, in turn, lead to litigation with insurers and reinsurers for the foreseeable future. In addition to protecting their own families and communities, lawyers are understandably thinking about how best to protect, and to seek redress for, their clients. Unfortunately, some attorneys appear to have chosen the one path that is virtually guaranteed not to provide any meaningful recovery: suing China. This article explains why claims against China will be dismissed on sovereign immunity grounds, among other likely bases for dismissal.
The two complaints that have attracted publicity so far—one filed in Florida on March 12 and another filed in Nevada on March 23—follow the same template. Each names as defendants the People’s Republic of China, the National Health Commission of the Republic of China, the Ministry of Emergency Management of the People’s Republic of China, the Ministry of Community (or Civil) Affairs of the People’s Republic of China, the People’s Government of Hubei Province, and the People’s Government of the City of Wuhan, China. Both are seeking class certification on behalf of a nationwide class, the first comprising “all persons and legal entities in the United States who have suffered injury, damage, and loss related to the outbreak of the COVID-19 virus” plus “all persons and legal entities in the United States whose businesses have suffered injury, damage, and loss related to the outbreak of the COVID-19 virus,” and the second comprising “all small businesses in the United States … which have sustained, among other things, financial/monetary damages and/or losses related to the outbreak of the COVID-19 virus.” The language in both complaints is virtually identical, including a bizarre claim for strict liability for “ultrahazardous activity” associated with allegedly operating “bio-weapons laboratories” near the Wuhan animal market. The Florida complaint identifies named plaintiffs but does not indicate what specific harms they have already suffered or expect to suffer; the Nevada complaint indicates that the named small businesses are currently experiencing “a substantial reduction in income and profits because of the coronavirus.” It is inconceivable in light of applicable class certification standards that any of the proposed classes would be certified.
Both complaints seek unspecified monetary damages. The Florida complaint seeks to certify an injunctive relief class but does not specify the injunctive relief sought; the Nevada complaint omits injunctive relief but includes a claim for punitive damages.
In the rush to be the first to file, the attorneys who drafted the (virtually identical) jurisdiction and venue sections of these complaints seem to have fundamentally misunderstood the Foreign Sovereign Immunities Act of 1976, which governs these actions. Clearly, all of the named defendants qualify as a “foreign state” under § 1603(a) of the act, which indicates that a foreign state “includes a political subdivision of a foreign state or an agency or instrumentality of a foreign state.” The FSIA specifies the procedure for serving a foreign state or its agency or instrumentality, and it contains other relevant limitations, including the express exclusion of punitive damages from the scope of available relief. Most fundamentally, the FSIA provides that foreign states enjoy immunity from the civil jurisdiction of U.S. courts, subject to certain enumerated exceptions. Unequivocal Supreme Court precedent makes clear that the FSIA provides the “sole basis” for obtaining civil jurisdiction over a foreign state in U.S. courts, and that it provides “a comprehensive set of legal standards governing claims of immunity” from civil suit. The suggestion in the complaints that the respective federal courts also “ha[ve] subject matter jurisdiction over this class action pursuant to the Class Action Fairness Act of 2005 (CAFA) and 28 U.S.C. § 1332(d)” is incorrect.
The FSIA is an unusual statute in that it provides federal courts with both personal and subject-matter jurisdiction over a foreign state if—and only if—an applicable exception applies. (This 2018 Federal Judicial Center guide to the FSIA, written by David Stewart, remains a valuable resource.) The complaints here allege that two exceptions apply: § 1605(a)(2) for a commercial activity with a sufficient U.S. nexus, and § 1605(a)(5) for a territorial tort. Yet, the complaints utterly fail to specify what relevant commercial activity any of the Chinese defendants engaged in, let alone how that activity has a sufficient U.S. nexus. The only thing they say is that there is no “exception to jurisdiction under the FSIA for ‘discretionary acts’ because the Defendants have acted clearly contrary to the precepts of humanity, transparency, and/or their conduct is prohibited by the internal laws of the PRC and its provincial and municipal governments.” They indicate that “the PRC admitted that the Wuhan police acted improperly” and that the defendants used a coerced false statement from Dr. Li Wenliang “to mislead the international community.” These acts might be appalling, and perhaps they even violate some unspecified Chinese law—but they are indisputably sovereign acts. Moreover, even if the defendants’ conduct amount to a tortious act, the exception in § 1605(a)(5) expressly excludes “any claim arising out of … misrepresentation [or] deceit,” as well as any claim based on the exercise, or failure to exercise, a discretionary function. The provision has also been uniformly interpreted to require that the defendant’s actions or omissions occurred within the United States. (For those interested, the Restatement (Fourth) of Foreign Relations § 457 provides an up-to-date examination of this exception.)
Simply put, any scholar or practitioner with working knowledge of the law of foreign sovereign immunity would have taken one look at the headlines about these lawsuits (as I did) and assess immediately that there is no basis for jurisdiction in a U.S. court. (There would also likely be grounds to dismiss for failure to state a claim, forum non conveniens, and other defects in service or pleadings.)
More Harm than Good
Simply put, any scholar or practitioner with working knowledge of the law of foreign sovereign immunity would have taken one look at the headlines about these lawsuits (as I did) and assess immediately that there is no basis for jurisdiction in a U.S. court.
This makes one wonder: do the attorneys involved simply not know the relevant law, or is there something else going on here? The law firm that filed the Nevada suit (using virtually identical language to the Florida suit filed 10 days earlier) claims that it has done so “in part, to shed light on how the coronavirus was allowed to turn into a pandemic, and to make those responsible implement practices that would prevent a pandemic of this magnitude from occurring again.” If that is true, this is not the way to accomplish those goals. There is an understandable human impulse to assign blame, but—especially in the United States—the contributory negligence evident in many aspects of the Executive Branch’s response makes focusing on China counter-productive at this point. Indeed, a Chinese lawyer recently sued the United States and various U.S. government departments for their alleged “cover-up” of the pandemic; another Chinese suit seeks compensation for “reputational damage done by President Donald Trump’s use of the phrase ‘the Chinese virus’ to describe the coronavirus.” Casting blame exclusively on China has also fueled xenophobia and racism against individuals of Asian descent.
Although government officials in China and the United States are unlikely to face civil accountability in a court of law, they are subject to the court of public opinion. Journalists, researchers, and activists should continue to shine a light on foreign governments that fail to act with truthfulness and transparency, and that do not enforce environmental and other regulations to protect the public. We must also insist on no less from the government of the United States.
Addendum: After this initial article was filed, two more class actions came to light. The first, filed in the Central District of California on March 27, essentially mirrors the Nevada and Florida suits, although it adds the Wuhan Institute of Virology as a named defendant. The second, filed in the Northern District of Texas on March 17, names the People’s Republic of China, the People’s Liberation Army, the Wuhan Institute of Virology, the Director of the Wuhan Institute of Virology (Shi Zhengli), and PLA Major General Chen Wei. The second complaint rests entirely on the theory that coronavirus was created as part of the development of a prohibited biological weapon by China, and that it was released by China “accidentally or otherwise.” Two observations are relevant here: First, this might be one of the rare complaints against foreign officials in which the foreign state is the “real party in interest,” meaning that the Foreign Sovereign Immunity Act governs both state and official immunity in this case under the Supreme Court’s reasoning in Samantar v. Yousuf. Although the individual defendants are named as alleged joint tortfeasors, it is unlikely that the plaintiffs are seeking $20 trillion damages from the individual defendants’ pockets. Second, and more fundamentally, there is no such thing as “accidental” terrorism. Even though the deaths from COVID19 attributable to the spread of the coronavirus and US failure to take appropriate steps to prevent and mitigate damage already dwarf those suffered on 9/11, the exception to jurisdictional immunity in 28 USC 1605B does not cover these circumstances. This section, which codifies the immunity provisions of the Justice Against Terrorism Act (JASTA), explicitly precludes a suit against a foreign state for an act of war. Instead, it requires “an act of international terrorism in the United States” and a tortious act by a foreign state that cannot be an omission and that does not constitute “mere negligence.” As with the other lawsuits, the statutory predicates for civil jurisdiction over China or Chinese officials related to the spread of coronavirus simply are not present here.
Editor’s Note-1: Readers interested in additional perspectives on the issue of China’s potential responsibility for COVID-19 pandemic-related harms, please see Just Security articles by David Fidler and Russell Miller and William Starshak.
Editor’s Note-1: Readers may also be interested in professor Keitner’s follow-on article, “Missouri’s Lawsuit Doesn’t Abrogate China’s Sovereign Immunity.”