HOW IMMUNE IS CHINA AGAINST CIVIL LAWSUITS IN U.S. COURTS?
A reply to Missouri's Attorney General.
The COVID-19 pandemic has severely disrupted the lives of virtually everyone in almost all countries around the globe. After several weeks of lockdown in many states, the calls for holding someone responsible are becoming louder. Especially in the United States, the country most affected in numbers, more and more citizens are demanding action against the Peoples Republic of China (China) from where the outbreak allegedly originated. On 21 April, the Attorney General (AG) of the State of Missouri, Eric S. Schmitt, filed a complaint with the U.S. District Court for the Eastern District of Missouri, requesting the Court to hold China accountable and to award damages. The son of President Trump, Donald Trump Jr., immediately re-tweeted the news from Missouri and called on other states to follow this example. It can be expected to see some similar lawsuits being initiated in several other US courts or even in courts of other jurisdictions.
Therefore, this blog post will analyze how the principle of foreign sovereign immunity is protecting China under international law from such a civil lawsuit. Moreover, it will be discussed if state courts should be able to adjudicate civil claims against China in the context of the COVID-19 pandemic. This post will not discuss the validity of any of the facts stated in the AG’s complaint or any news outlet.
The Complaint of the Attorney General of Missouri
The complaint, lodged by the AG on April 21 (acting on behalf of the State of Missouri as plaintiff), was filed against China and several other Chinese government entities, including the Communist Party of China, the National Health Commission, the Ministry of Emergency Management, the Ministry of Civil Affairs, the government of the Hubei province, the government of the Wuhan city, the Wuhan Institute of Virology, and the Chinese Academy of Sciences (as defendants).
"The defendants are liable for the tort of 'creating a public nuisance' by 'unreasonably interfering' with Missouri's public health an public safety."
The complaint is requesting the Court to render a judgment against the defendants on four common law counts. First, it is argued that the defendants are liable for the tort of ‘creating a public nuisance’ by 'unreasonably interfering' with Missouri's public health and public safety (paras. 139-148). The second count alleges that the defendants have engaged in an ‘abnormally dangerous activity.’ Here, the AG argues that particularly the Wuhan Institute of Virology conducted such activity with the allegedly faulty research and may even be the source of the novel coronavirus (paras. 149-162). Third, the complaint asks to hold the defendants liable for one count of a ‘breach of duty.’ It is argued that China had an international duty under article 6.1 of the International Health Regulations to report “all events which may constitute a public health emergency of international concern within its territory” to the WHO within 24 hours. The AG alleges that the defendants have instead concealed the outbreak, delayed, and misinformed the international community. This is claimed to be a ‘breach of duty’ owed to other states and all Missourians (163-173). The fourth count is another ‘breach of duty,’ claiming that China has breached a duty not to hoard personal protective gear for commercial interests such as increasing the retail prices (174-181).
Finally, the AG requests the Court to find all defendants jointly and severally liable for the four torts and award different kinds of actual, consequential and punitive damages to Missouri and all concerned Missourians.
The role of state immunity
State immunity exempts one state from the jurisdiction of the courts of another state. It applies to administrative, civil, criminal, and enforcement proceedings alike. State immunity is the expression of the principle of sovereign equality (article 2(1) UN Charter); that the courts of one state cannot judge over another equal state. While many countries have national laws on state immunity (e.g. the US 1976 Foreign Sovereign Immunities Act (FSIA)) it is also customary international law. From 1978 onwards, the International Law Commission codified the customary law on state immunity which eventually led to the adoption of the ‘United Nations Convention on Jurisdictional Immunities of States and Their Property’ (UNCSI) in 2004 which has not entered into force yet.
"Only sovereign states are protected by state immunity but not the Communist Party, local or city governments, the Wuhan Institute of Virology, or the Chinese Academy of Sciences."
At the outset, it seems clear that state immunity would protect China from the jurisdiction of a U.S. district court (article 5 UNSCI; 28 USC 1604). In contrast, the AG argues that only sovereign states are protected by state immunity but not the Communist Party, local or city governments, the Wuhan Institute of Virology, or the Chinese Academy of Sciences. This simply is not true under international law and a misconstruction of the FSIA (28 USC 1603(a) and (b)). Under article 2(1)(b) UNSCI and 28 USC 1603(a) and (b) a state encompasses all its organs of government (e.g. ministries), constituent units of a federal state (e.g. provincial or local governments), or “political subdivisions […], which are entitled to perform acts in the exercise of sovereign authority” (article 2(1)(b)(i) UNSCI). Thus, when the Communist Party of China governs the country and takes important decisions with regard to national health policy, it is exercising sovereign functions and is covered by state immunity. With regards to the Wuhan Institute and the Academy of Sciences the same is true. They are fully controlled by the Chinese state and exercise sovereign functions (i.e. national health policy). Even if all the defendants were engaged in a coverup of the coronavirus outbreak, as alleged by the complaint, this would be clear evidence that they were performing sovereign functions as part of the Chinese state. Therefore, the AG’s claim that some of the defendants are not protected from the district court’s jurisdiction is unfounded.
As stated in article 10 of the UNSCI, there is an exception to state immunity for commercial transactions. The idea behind this is that states doing business abroad should not have an unfair advantage over local businesses and should be held liable for violating local laws if acting in a commercial capacity. The AG claims that China and the other defendants were in fact acting in a commercial capacity by operating a healthcare system in Wuhan, conducting commercial research, operating social media platforms, and trading with protective gear. Thus, state immunity does not apply to the defendants. However, these claims are incorrect since a transactional element is missing. The acts described in the complaint may or may not be of a commercial nature, but the important point is that they all occurred on Chinese territory and not as part of a commercial transaction with the U.S. Since no commercial transaction between the defendants and a private or legal person in Missouri is in question, the commercial transaction exception is not applicable.
As the third basis for jurisdiction the AG presents the ‘personal injuries and damage to property’ exception (article 12 UNSCI, 28 USC 1605(5)). Accordingly, a foreign state cannot claim immunity in proceedings concerning “pecuniary compensation for death or injury to the person, or damage to or loss of tangible property […]” (article 12 UNSCI). The classical example would be car accidents with diplomatic vehicles. However, this exception requires (a) that the act or omission causing death, injury, damage, or loss is attributable to the foreign state, and (b) that this act or omission occurred (in whole or in part) on the territory of the forum state and the author was present. It seems highly unlikely, that the 5800 COVID-19 cases, 177 deaths, and all other damages which occurred in Missouri are attributable to the defendants. The chain of events would be too long. In addition, the acts or omission which according to the complaint caused all the suffering in Missouri did not occur on Missourian territory neither were any of the defendants present. Therefore, this exception does not apply to the given case.
How immune is China?
It can be concluded, that all Chinese defendants are covered by state immunity and no exception is applicable. Any district judge should find that the complaint is unsubstantiated, state immunity should be extended to the defendants, and the case should be dismissed. If the district court was to allow the case to proceed it can be expected that the Department of State will file an amicus brief at the appeals level asking the appeals judge to grant immunity. In the highly unlikely scenario that a U.S. court would hold China liable, this would constitute an internationally wrongful act triggering state responsibility.
One of the rationales of state immunity is the protection of sovereign states from politicized proceedings before courts of other states. The complaint by the AG of Missouri is a good example of such a politicized lawsuit on questionable legal grounds. Although state immunity is an often-criticized concept, this case demonstrates how it helps to protect states from a plethora of lawsuits all around the globe and thereby secures more peaceful diplomatic relations. It seems misguided to try to hold China accountable for the COVID-19 outbreak and will certainly not help to better cope with the global pandemic.
Jan-Phillip Graf, Geneva