Case of the Day: Missouri v. China

The case of the day is Missouri ex rel. Schmitt v. People’s Republic of China (E.D. Mo. 2022). This was my “unmeritorious case of the day” from April 27, 2020, and the subject of my informal Letters Blogatory amicus post in March 2021. The state of Missouri sued the Chinese state, as well as several Chinese government agencies, the Chinese Communist Party, and the Chinese Academy of Sciences, asserting that they are liable for damages on account of the COVID pandemic. In the earlier posts, I noted a service of process challenge for Missouri. On the one hand, Missouri claimed that the court would have personal jurisdiction over all of the defendants because they all were within the scope of the FSIA. On the other hand, Missouri sought leave to serve process by alternate means on some of them under FRCP 4(f)(3), even though the FSIA’s methods of service are exclusive. Apparently, the plaintiffs later changed their view and asserted that the CCP, the Chinese Academy of Science, and the Wuhan Institute of Virology were non-governmental defendants, and on that basis, the court authorized service by email on them. When they failed to answer, defaults entered.

Before entering default judgment, the court had to decide, sua sponte, whether the three defendants were, in fact, non-governmental. The court, taking judicial notice of some basic facts about the CCP and the allegations in Missouri’s complaint regarding the CCP’s control over the other defendants, held that the CCP is, in fact, within the scope of the FSIA. That seems obviously correct given the fundamental and controlling role the Party plays in China. Although the situation for the CAS and the WIV was a little less self-evident, the court held that both entities were at least agencies or instrumentalities of the Chinese state. Again, the court took judicial notice of some undisputed facts about the two entities and the plaintiff’s own allegations, e.g., of orders the Chinese government gave to the entities. I am not 100% sure the decision was correct as to the CAS and the WIV, though if they are not FSIA defendants, it is difficult to see a basis for the exercise of personal jursidiction.

The court rejected the argument that the commercial activity exception to foreign sovereign immunity applied. It reasoned that the gravamen of the complaint was the failure to contain the outbreak in Wuhan or China while lying to the world about the transmissibility of the virus. Such activity is plainly the kind of thing a government does, not that a private commercial party does. Nor did the court find a sufficient link between the gravamens of the case and Chinese activity that could be construed as commercial, or a sufficient “direct effect” in the United States. All of this seems basically right to me, although I think I would have focused on a step the court passes over. It assumes that China’s operation of a healthcare system, research on viruses, etc., are commercial activities. Really?

The court also easily rejected application of the noncommercial tort exception to foreign sovereign immunity. China’s actions obviously were not ministerial.

Thus the court dismissed the action for lack of jurisdiction. One would hope that with the 2020 election and the partial retreat of Donald Trump from the national scene, this lawsuit would come to an end. But Trumpism remains strong, and Missouri immediately appealed. It’s not over yet.

2 responses to “Case of the Day: Missouri v. China”

  1. Tom

    It is worth considering why Missouri sought leave to serve process by alternate means even though the FSIA’s methods of service are exclusive. FSIA’s rules on service of process are hierarchical and exclude service by alternate means. Certainly, the Missouri AG must know this. So, why the end run rule on FSIA’s rules? It is not possible to obtain the address for service of governmental agencies; even when you have long term working relationships with Chinese attorneys. It seems the disclosure of Chinese governmental addresses is verboten; this is a likely reason why there is so little litigation in the US concerning the alleged negligence of Chinese government in the handling of the Wuhan outbreak in late 2019-20.

    1. Ted Folkman

      Tom, thanks for the comment. Leaving aside the question of which defendants were agencies or instrumentalities of the Chinese state and which were not, the likeliest reason for seeking alternative service, it seems to me, is that Missouri knew that the Chinese government would not execute a request for service under the Service Convention. For non-governmental defendants, a refusal to execute the request leaves service by alternate means under FRCP 4(f)(3) as the only available alternative. For governmental defendants, Missouri could (indeed would have had to) serve process by letters rogatory through the diplomatic channel, but that takes a long time.

      I think the main reason there hasn’t been much litigation against the Chinese government isn’t related to service of process. It’s just pretty obvious that foreign sovereign immunity will apply given the nature of the allegations.

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