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Missouri’s Misguided Lawsuit Against China

Unfortunately, it is very unlikely to succeed.
A woman walks past a portrait of Chinese President Xi Jinping as the country is hit by the coronavirus, Shanghai, China, March 12, 2020. (Aly Song/Reuters)

A woman walks past a portrait of Chinese President Xi Jinping as the country is hit by the coronavirus, Shanghai, China, March 12, 2020. (Aly Song/Reuters)

The attorney general of Missouri, Eric Schmitt, has filed a civil lawsuit blaming China for the coronavirus and seeking restitution. Schmitt has the right target, but his lawsuit is bad law and bad policy, and unlikely to go anywhere. Imposing consequences on China is a job for the president and Congress, not state- and local-government lawsuits.

Sanctioning China is fundamentally a foreign-policy decision. Schmitt’s complaint is shot through with arguments about how Chinese national policies harm the United States. It accuses the defendants — the government and ruling Communist Party of China and major Chinese institutions — of “violation of their duties to the international community” in four major ways: (1) cover-ups of the outbreak, including public denials of the risk of human-to-human transmission; (2) arresting whistleblowing doctors; (3) inadequate steps to contain the contagion; and (4) hoarding personal protective equipment while exporting defective personal protective equipment. All of this comes back to the way China is governed and the policies of its ruling regime.

Consider, for example, the complaint’s characterization of what happened in Wuhan as a massive conspiracy. Most or all of this is quite reasonable and based on public reports. But how we deal with that is a national foreign-policy issue, one that has grave and sensitive implications for numerous strands of American defense, economic, diplomatic, human-rights, educational, and immigration policy, and for our relationships with Taiwan, Hong Kong, Japan, South Korea, India, and others. This is not a question given in our constitutional system to the attorney general of Missouri, any more than it is given to the mayor of New York or the city council of Berkeley. Conservatives are rightly upset when local left-wing governments attempt to undermine the foreign policy of the president and Congress by operating their own rogue foreign policy, and that should be equally true when it is done by a state attorney general, even a conservative Republican.

The legal obstacles are significant as well, and raise the question of why public resources should be expended on this lawsuit, however creatively it is framed by the state’s lawyers. Most of the defendants in the case are parts of the Chinese government, protected by sovereign immunity, and the rest are accused of shaping or carrying out sovereign policy through the mechanisms of government. Since 1976, foreign-sovereign immunity from civil lawsuits (which was once absolute) has been governed by a federal statute, the Foreign Sovereign Immunities Act. The FSIA applies to all suits against sovereign defendants, including provincial and local governments, ambassadors, and state-owned industries, and puts them in federal court precisely because of the national implications of such suits. It gives sovereign defendants all sorts of advantages that defendants in most lawsuits lack, including the ability to appeal immediately if the case isn’t thrown out right away.

The FSIA is a famously convoluted statute, but to simplify, the complaint here tries to meet one of two statutory exceptions to immunity. The first is for lawsuits based on a foreign commercial activity having a “direct effect” in the United States. Even if you broadly classify things like arresting doctors and official cover-ups as commercial activities, the courts have typically taken a narrow view of what qualifies as a “direct effect” in the United States, refusing to follow multi-step chains of events. Missouri will probably argue that the release of a virus is like the sale of a defective product that fails in the United States, but that is still a rather different thing from covering up an accidental viral release and thus deceiving governments in the United States and elsewhere into waiting too long to seal off the entry of the virus from China. The FSIA would not stop Missouri from suing China if a Chinese state-owned business dumped a bunch of toxic waste directly into the Mississippi River, but as bad as China’s conduct is here, the lawsuit’s theory is more indirect than that.

Legally, Schmitt’s second theory is even more of a stretch: that damages are based on a non-commercial tort that does not involve any discretionary government act (or failure to perform such act). This complaint is riddled with discretionary actions and failures to act by Chinese authorities. It explicitly targets Chinese-government decisions.

The FSIA is, moreover, hardly the only legal obstacle here. U.S. courts have long recognized, albeit somewhat inconsistently, the “act of state” doctrine. As the Ninth Circuit summarized the doctrine in 2018, applying it to bar suits for price-fixing against state-owned businesses:
 

Every sovereign State is bound to respect the independence of every other sovereign State, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory . . . the doctrine bars suit where (1) there is an official act of a foreign sovereign performed within its own territory; and (2) the relief sought or the defense interposed in the action would require a court in the United States to declare invalid the foreign sovereign’s official act. [Quotations omitted.]


Litigation against the Chinese government entities poses further challenges even beyond this. There are serious limitations on collecting evidence in China; taking a civil deposition inside China is against the law. China tends to refuse to cooperate with or even acknowledge suits in U.S. courts and is likely to be even more recalcitrant than usual here.

Eric Schmitt is to be commended for wanting to make China pay a price in the United States for its malignant role in the current global pandemic. But this lawsuit is unlikely to go far, nor should it. It is up to the president and Congress to make China pay.

More from National Review

Source: National Review

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