During COVID I wrote about what I regarded as an absurd case: the state of Missouri suing China and Chinese government instrumentalities for damages arising from the pandemic. I thought the case was absurd mainly because of foreign sovereign immunity, but also because the service of process on the two arguably non-governmental defendants was bad. But we live in absurd times, and as I reported in an earlier post, after the district court dismissed the action on FSIA grounds, the Eighth Circuit revived one of the claims, a claim that China had hoarded PPE by nationalizing factories that had been producing PPE for US firms, thus violating US antitrust law and Missouri law. On remand, the district court has now granted a default judgment for Missouri for nearly $25 billion in damages. I continue to think this is a case that should never have been brought. And although the case attracted some amicus attention, I think that US judges need to do better, in cases where the foreign state does not appear, to get the law of foreign sovereign immunity right, especially in such a politically fraught, high dollar-value case.

Service of Process

As we know, China and the United States are parties to the Hague Service Convention. The Supreme Court has held that the Convention is mandatory, or in the terms more often used internationally, exclusive. That means that if the Convention applies, then the plaintiff must serve process using one of the methods that the Convention authorizes, or at least permits. The Federal Rules of Civil Procedure reflect this rule. FRCP 4(f)(3) allows the court to authorize alternate methods of service, even if they violate foreign law, but not if they violate the Convention.

Missouri served process on the Chinese Communist Party, the Chinese Academy of Sciences, and the Wuhan Institute of Virology by email, after seeking and receiving permission from the court under FRCP 4(f)(3). Leaving aside the question of whether any of these defendants is an instrumentality of the Chinese state (it is hard to see how the Chinese Communist Party would not be at least an instrumentality of the state),¹See my prior post on the case for a discussion of this point. The bottom line is that service by email is not permissible for any defendant that is an alter ego of the state, or an instrumentality of the state. China has objected to service by postal channels under Article 10 of the Convention, and service by email is permissible under the Convention, if at all, only if one conceives of email as part of the postal channel. Here is a good explanation of the issue, and you can also find many posts on the topic in this archive. Thus the service of process on these defendants was improper, and the resulting judgment (in my view) void.²Missouri served the Chinese state itself, and several entities that are deemed to be a part of the Chinese state for these purposes, through the diplomatic channel. That seems okay, since the Chinese government refused, under Article 13 of the Convention, to execute the request for service of process, and since China has objected to service by postal channels, making service by mail on the Minister of Foreign Affairs unavailable.

Foreign Sovereign Immunity

Although the district court originally dismissed the complaint in its entirety on FSIA grounds, the Eighth Circuit reversed as to one claim—the claim that China hoarded PPE in the early stages of the pandemic. The gist of the claim is that China nationalized factories that made PPE for American companies. The Eighth Circuit thought that that claim came within the commercial activity exception to foreign sovereign immunity. But that seems absurd to me, since nationalization of property is a quintessentially sovereign act, and it’s hard to think of a better example than nationalization of property in order to marshal resources to respond to a public health emergency. Looking to the nature of the act rather than the purpose, as the commercial activity exception requires, we must note that only governments can nationalize property; it’s not something a commercial enterprise can do.³There is an expropriation exception to FSIA immunity, which I covered in a recent post on Hungary v. Simon. But the claim here wasn’t brought by any American company whose property was allegedly expropriated, and it’s not even clear to me that the American company owned the factories: the allegation, as recounted by the Eighth Circuit, was that China “took over factors that ma[de] masks on behalf of American companies.” So I think the premise of the Eighth Circuit’s decision was plainly wrong.

Reciprocal self interest

When we think about these cases, we have to think about what it would be like if the shoe were on the other foot. In 2021, the US and other western countries were accused of hoarding the COVID vaccine. Should the United States have been amenable to suit in China or elsewhere because it prioritized the public health needs of its own people? The technical term for taking seriously the question, “what if the shoe were on the other foot?” is comity. We need more of it.

• 1
  See my prior post on the case for a discussion of this point. The bottom line is that service by email is not permissible for any defendant that is an alter ego of the state, or an instrumentality of the state.
• 2
  Missouri served the Chinese state itself, and several entities that are deemed to be a part of the Chinese state for these purposes, through the diplomatic channel. That seems okay, since the Chinese government refused, under Article 13 of the Convention, to execute the request for service of process, and since China has objected to service by postal channels, making service by mail on the Minister of Foreign Affairs unavailable.
• 3
  There is an expropriation exception to FSIA immunity, which I covered in a recent post on Hungary v. Simon. But the claim here wasn’t brought by any American company whose property was allegedly expropriated, and it’s not even clear to me that the American company owned the factories: the allegation, as recounted by the Eighth Circuit, was that China “took over factors that ma[de] masks on behalf of American companies.”