Following the spread of the coronavirus pandemic to the United States (“U.S.”), a series of lawsuits have been filed in U.S. courts against the Chinese government, seeking compensation for the pandemic’s impact on U.S. individuals and businesses. Over the last nine months, at least 24 such cases have been filed, including cases filed by the States of Missouri and Mississippi. Eight of these lawsuits have already been dismissed, mostly on routine procedural grounds such as failure to prosecute or failure to state a recognizable claim. The remaining 16 lawsuits and any future ones face inherent challenges as China enjoys sovereign immunity under the Foreign Sovereign Immunity Act (“FSIA”), which normally denies U.S. courts jurisdiction over these cases unless a specific exception applies. In addition, most of these lawsuits, which are filed as putative class actions, are unlikely to pass the class certification stage in any event.
That said, some of the lawsuits advance novel theories regarding sovereign immunity and it cannot be ruled out that some of them or portions thereof might survive immunity review. Additionally, in light of several bills introduced by members of Congress aiming at stripping China of sovereign immunity, there is a possibility that these or similar civil lawsuits might one day be able to proceed. In the unlikely case that a judgment (including possibly a default judgment) is issued against the Chinese government, the prevailing plaintiffs might seek to execute on the assets of not only the Chinese government, but also Chinese state-owned-enterprises in the U.S. or other jurisdictions.
I. Overview of Lawsuits & Legislative Attempts
At least 24 lawsuits have been filed against China for damages associated with the coronavirus pandemic. Except the lawsuits filed by Missouri, Mississippi and several individual prisoner actions, the vast majority of the cases have been putative class actions, which purport to represent an extremely large group of individuals or entities who have suffered injury from the pandemic.
In light of the legal obstacles to bringing suit against a sovereign defendant, Republican lawmakers and the occasional Democratic lawmaker in both the Senate and the House have introduced bills aiming to strip China of its sovereign immunity under the FSIA for its actions relating to the outbreak of the pandemic. While the fate of such bills and how they might affect the COVID-19 lawsuits, if at all, is highly uncertain, it is not the first time that the U.S. Congress has tried to restrict the principle of sovereign immunity through legislation targeting specific states—Congress previously amended the FSIA to allow September 11 victims to sue Saudi Arabia.
II. Service
None of the plaintiffs of the COVID-19 lawsuits against China have managed to effectuate service, which is the first hurdle for the lawsuits to proceed. In several of the cases, service packages have been delivered to the Hague Service Convention handling office in Beijing. However, significant delays have been reported by the service vendors involved due to closure of that office during the height of the pandemic and a resulting backlog of service requests. See, e.g., Alters v. People’s Republic of China, No. 1:20-CV-21108 (S.D. Fla., filed Mar. 12, 2020), Dkt. No. 123 at 1 ¶ 2; see also Aharon v. Chinese Communist Party, No. 9:20-CV-80604 (S.D. Fla., filed Apr. 7, 2020), Dkt. No. 35 at 4 ¶ 4. None of these service packages are as yet reported as having been delivered to the defendants involved.
The means by which service is attempted is a critical issue. According to the Federal Rules of Civil Procedure, service on a foreign state, political subdivision thereof (e.g. the Wuhan Municipal Government), or agency or instrumentality thereof (e.g. the Wuhan Institute of Virology) must be done in accordance with the FSIA, which in turn requires service in accordance with any applicable international convention, which for China and the United States means the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, otherwise known as the Hague Service Convention. Zhang v. Baidu.com Inc., 932 F. Supp. 2d 561, 564-65 (S.D.N.Y. 2013) (explaining the application of the rules for a foreign state defendant, and holding that the Hague Service Convention governs service on the People’s Republic of China). Under the text of that Convention and the reservations and...
