State ex rel. Schmitt v. People's Republic of China
| Decision Date | 08 July 2022 |
| Docket Number | Case No 1:20 CV 99 SNLJ |
| Citation | 610 F.Supp.3d 1174 |
| Parties | The State of MISSOURI, EX REL. Eric S. SCHMITT, in his official capacity as Missouri Attorney General, Plaintiff, v. The PEOPLE'S REPUBLIC OF CHINA, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
Dean John Sauer, Justin D. Smith, Office of the Missouri Attorney General, Jefferson City, MO, for Plaintiff.
Amy Collignon Gunn, The Simon Law Firm PC, St. Louis, MO, for Amicus Lawyers for Upholding International Law.
Jacqueline M. Kinder, Brown and James PC, St. Louis, MO, for Amicus The China Society of Private International Law.
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. The Court stayed the proceedings and ordered supplemental briefing on several subject matter jurisdiction issues involving the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1603, et. seq. ("FSIA"). As the Supreme Court recently stated, the FSIA "spell[s] out, as a matter of federal law, the suits against foreign sovereigns that American courts do, and do not, have power to decide." Cassirer v. Thyssen-Bornemisza Collection Foundation , ––– U.S. ––––, 142 S. Ct. 1502, 1508, 212 L.Ed.2d 451 (2022). Upon consideration of plaintiff's supplemental brief, and for the reasons explained below, the Court determines that it has no power under the FSIA to decide the merits of the case and dismisses the complaint for lack of subject matter jurisdiction.
The complaint . 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.
In support of subject matter jurisdiction, plaintiff cites 28 U.S.C. § 1330(a), which authorizes a civil action under the FSIA against a "foreign state" that "is not entitled to immunity either under sections 1605-1607 of this title or under any applicable international agreement." 28 U.S.C. § 1603(a). Plaintiff also cites the diversity-of-citizenship statute, which vests federal courts with jurisdiction over civil actions involving more than $75,000 that are between citizens of a state "and citizens or subjects of a foreign state." See 28 U.S.C. § 1332(a)(2). [R. Doc. ¶¶ 33-44.]
Procedural history. After the complaint was filed, plaintiff attempted Hague Convention service, but China posted notice on its web site that it was refusing service under Article 13 of the Convention, which allows signatories to refuse service that would violate sovereignty. See 28 U.S.C. § 1608(a)(2) ; Art. 13, Hague Convention.
Plaintiff sought and obtained alternative service methods. As to three defendants—CCP, WIV, and CAS—that plaintiffs viewed as non-foreign-state defendants and thus not subject to sovereign immunity, the Court authorized service through e-mail addresses that were publicly available and posted on websites maintained by these defendants. Plaintiff thereafter filed proof of service through e-mail; and when none of the three defendants appeared or answered, plaintiff successfully moved for clerk's entry of default judgment under Federal Rule of Civil Procedure 55. As to the remaining six defendants—whose foreign state status is uncontested—this Court authorized service through diplomatic channels. See 28 U.S.C. 1608(a)(4). After filing proof of service, plaintiff successfully moved for clerk's entry of default judgment against those defendants as well when they failed to appear. Plaintiff then sought discovery to adduce the additional evidence necessary to prove its claims before entry of judgment.
The stay. This Court denied plaintiff's motions for discovery and a case-management order without prejudice, and stayed the proceedings, sua sponte , in order to comply with its independent obligation to determine whether subject matter jurisdiction exists. See Verlinden B.V. v. Cent. Bank of Nigeria , 461 U.S. 480, 493-94, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983) () In this regard, this Court ordered additional briefing on the following issues of subject matter jurisdiction:
(1) the proper classification of CCP, CAS, and WIV, and in particular, whether they are foreign states within the meaning of the FSIA;
(2) whether plaintiff properly served CCP, CAS, and WIV;
(3) whether an FSIA exception to sovereign immunity applied to any of the defendants; and
(4) whether and to what extent additional factual information could be properly submitted to or judicially noticed by the Court. [Doc. 47.]1
A. Scope of review/material properly considered. The issue before the Court is this: what is the proper scope of review in determining whether subject matter jurisdiction exists under the FSIA when (1) the only filings are the complaint and briefs, and (2) defendants have not appeared or answered? And in these circumstances, what material may a district court consider beyond the pleadings if the court elects to do so?
The Court has not identified an Eighth Circuit case discussing subject matter jurisdiction review in an FSIA suit in which no defendant has appeared. There is some help, however, in other circuits. In an FSIA case, Nikbin v. Islamic Republic of Iran , 471 F.Supp.2d 53, 58 (D.D.C. 2007), the district court noted that the defendants’ failure to appear precluded the court from making any factual findings that were inconsistent with the allegations of the complaint, and the court limited its review "to considering jurisdiction as a matter of law"; the court thus considered whether the unchallenged factual allegations, assumed as true, were sufficient to give rise to jurisdiction over claims against a foreign state. Id.
The decision in Siderman v. Republic of Argentina , 965 F.2d 699 (9th Cir. 1992), is also helpful. There, the district court granted default judgment on a torture claim against the Republic of Argentina, which had not appeared. Argentina then appeared and moved to set aside the default based on FSIA immunity. Id. at 702. Finding...
To continue reading
Request your trial