From Missouri ex rel. Schmitt v. People's Republic of China, decided Friday by Judge Stephen N. Limbaugh, Jr. (E.D. Mo.) (fun fact: he's the late Rush Limbaugh's cousin):
Amidst the wreckage of the COVID-19 pandemic, plaintiffs across the United States have filed civil suits seeking damages against the People's Republic of China and related entities for their role in the pandemic. This is one such suit. Plaintiff, the State of Missouri ex rel. Missouri Attorney General Eric Schmitt ("Plaintiff"), sues nine Chinese defendants for injuries suffered within the State of Missouri because of the pandemic…. [T]he Court determines that it has no power under the [Foreign Sovereign Immunities Act] to decide the merits of the case and dismisses the complaint for lack of subject matter jurisdiction….
The complaint names as defendants (1) the People's Republic of China (PRC), (2) the Communist Party of China (CCP), (3) PRC's National Health Commission, (4) PRC's Ministry of Emergency Management, (5) PRC's Ministry of Civil Affairs, (6) People's Government of Hubei Province, (7) the People's Government of Wuhan City, (8) the Wuhan Institute of Virology (WIV), and (9) the Chinese Academy of Sciences (CAS).
The following is a broad-brush summary of the complaint's allegations, with details added later in the opinion as needed to address the legal issues.
Defendants engaged in research on coronaviruses at the WIV, a laboratory with known safety concerns. On November 17 or even earlier, people began to contract COVID-19, an infectious disease caused by a novel coronavirus. One theory is that the virus originated from animals at a Wuhan seafood market while another theory (later) posited that the virus escaped from WIV's laboratory. On December 31, 2019, despite ample evidence to the contrary, the Wuhan Municipal Health Commission announced that investigation had found no obvious human-to-human transmission and no infection of medical staff. Defendants delayed reporting the virus to the World Health Organization (WHO) and misled it about the nature and extent of the problem, inducing the WHO to deny or downplay the risk of human-to-human transmission in the critical weeks while the virus was first spreading. Further, defendants moved forward with Chinese New Year celebrations, hosted a potluck dinner in Wuhan for some 40,000 residents, and allowed five million people to leave Wuhan without screening. Many of these persons travelled across the globe.
Defendants censored or silenced any reporting of human transmission of the virus. One notable example is when a Dr. Li Wenliang shared on social media that his patients were suffering from a SARS-like illness possibly linked to a coronavirus: he was publicly punished by Wuhan police for spreading rumors. Defendant National Health Commission forbade publication of information on the disease and ordered labs to transfer samples to designated testing institutions or to destroy the samples. Members of the United States Center for Disease Prevention and Control were denied entry into China.
Defendants also delayed world-wide disclosure that it had mapped the genome of the virus, and that the virus was transmissible person-to-person. They delayed as well in quarantining Wuhan's residents after initial reports of the virus and its human transmissibility. Finally, defendants hoarded personal protection equipment (PPE) by nationalizing factories that made masks for American companies, by ceasing the export and sales of its masks, and by buying much of the rest of the world's supply. What little PPE defendants did release across the world was defective. As of the filing of the Complaint in April 2020 the virus had resulted in the deaths of scores of United States citizens including Missourians. In addition to its toll on human life and health, the virus caused emotional turmoil as well as economic and educational losses.
The complaint brings four alternative tort claims: Count I for Public Nuisance, Count II for Abnormally Dangerous Activities, Count III for Breach of Duty by Allowing Transmission of COVID-19, and Count IV for Breach of Duty by Hoarding PPE. Each Count is brought against all defendants, who allegedly acted in concert, and the complaint seeks monetary damages as well as injunctive and other relief….
For more details on why the FSIA applies, see the opinion, but here's a brief excerpt related to the "discretionary function" exception to foreign sovereign immunity:
"The existence of a discretionary function under the FSIA is generally analyzed under the principles developed pursuant to the Federal Tort Claims Act's ('FTCA') discretionary function exception." … [A] two-part test governs the exception.
First, the conduct must involve an element of judgment or choice, and if a federal statute, regulation, or policy mandates certain action, the discretionary function exception will not apply. "Second, the judgment or choice must be 'the kind that the discretionary function exception was designed to shield.'" The exception is intended to prevent judicial second-guessing of legislative and administrative decisions that are grounded in social, economic, and political policy through a tort action….
[T]he complaint allegations themselves establish that the core conduct was a matter of sovereign policy. The complaint cites no Chinese statute, regulation, or policy mandating any of the conduct. The conduct does not involve ministerial tasks. Rather, the allegations reflect matters of judgment and choice, e.g., delaying information, providing misinformation, suppressing information, censoring information, allowing massive public gatherings, allowing unencumbered travel, and publicly punishing citizens who sought to warn the public about the virus. And finally, the purpose of the exception is served because it prevents lawsuits (however tragic the result for the injured parties) for torts arising out of a sovereign's exercise of public policy in conjunction with its sovereign acts. This is, after all, the very purpose of the FSIA. Because the discretionary-function exception to the non-commercial tort exception applies, it is not necessary to consider the second "exception to the exception" for claims arising out of malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract.
Thus, the Court concludes that neither the commercial-activity exception nor the non-commercial tort exception applies. The court in Eisenberg v. People's Republic of China (D. Mass. 2022) reached the same result, concluding that the "allegations that PRC government officials engineered COVID-19, decided to conceal information concerning its escape from a lab, and failed to prevent the spread of the virus by, among other things, permitting international air travel is not subject to the commercial activity or non-commercial tortious activity exceptions to the FSIA. Instead, [the plaintiff] has alleged non-commercial, discretionary acts or omissions by the PRC, and therefore it is not subject to suit under the FSIA." The court added that it had "not located a single case that has determined that any exception of the [FSIA] affirmatively applies to COVID-19 damages claims to individuals based on allegations that the PRC is responsible for the spread of the virus throughout the World."
Congratulations to Amy Collignon Gunn of The Simon Law Firm PC, who prevailed in the case. (As readers might gather, I have no love for the Chinese government, but it is entitled to legal rights in American courts, just as other litigants are, and I respect lawyers' successfully defending those rights; plus of course American courts' attempts to properly apply American law rely on lawyers effectively presenting legal arguments on behalf of their clients.) Congratulations also to Paul Larkin, Suing China Over COVID-19, which the court favorably and repeatedly cites. The state has appealed.
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