From Misinformation to Hidden Economic Agendas: The Coronavirus Lawsuit Against China

Courtesy of Robert Gatter & Ana Santos Rutschman

On April 21st, the State of Missouri became the first state to sue China, Chinese government-run entities, including the Wuhan Institute of Virology, and the Chinese Communist Party for damages related to Covid-19. The complaint claims that Chinese authorities caused “enormous economic disruption” to governments, corporations, and citizens of the U.S., including in Missouri, with the economic disruption adding to the human suffering from infections and deaths. More specifically, Missouri lists among its economic harms record jobless rates, shuttered businesses, disrupted production and trade, diminished government revenues, mounting shortfalls in public budgets, diminishing public services, shrinking public pension plans, and untold business opportunities lost. The State estimates that the resulting damages may be in the tens of billions of dollars.

The lawsuit blames these economic harms not on the virus generally, not on all governments for being poorly prepared and slow to react, but, instead, on China and Chinese officials alone. At its core, the complaint alleges that commercial research on coronaviruses at the Wuhan Institute created SarsCoV-2, the virus that causes COVID-19. It goes on to claim that, as the virus began infecting individuals in Wuhan, Chinese officials deliberately misled the Chinese public and the worldwide community about the dangers of the virus, and—all the while—hoarded and stockpiled masks and other personal protective equipment (PPE) with the plan to benefit from later increases in global demand when the virus spread to pandemic levels.

The lawsuit, in this way, deliberately paints a sinister picture of the Chinese government recklessly participating in dangerous research on coronaviruses and then manipulating the PPE market while simultaneously ignoring international obligations to inform the worldwide community of the mounting epidemic and to share genetic information about the virus so that drug manufacturers could begin developing vaccines and treatments.

We argue that the complaint is deeply flawed both as a matter of law and policy. Moreover, we explain how the move by the State of Missouri is part of a larger plan to instrumentalize both the pandemic and the judicial process as a way to pursue a hidden economic agenda.

Legal Flaws of Missouri’s Complaint

First, we address the complaint’s legal flaws. There are several: reliance on factually inaccurate sources, such as popular press accounts claiming that SarsCoV-2 was man-made; the absence of a legally enforceable duty under International Health Regulations; and the many contributing causes of the pandemic and its consequences in the U.S. and Missouri.

The most significant legal flaw, however, is the complaint’s inability to get around the Foreign Sovereign Immunities Act (FSIA), which is designed “to promote the functioning of all governments by protecting a state from the burden of defending lawsuits abroad which are based on its public acts.” In short, the Act protects foreign states and governments from being sued unless one of the statute’s exceptions apply. Missouri’s complaint relies primarily on the “commercial activities” exception to FSIA. Under this exception, foreign immunity is lifted when actions by a foreign state consist of a commercial activity either performed in, or having an impact on, the United States. The lawsuit claims that conducting “commercial research” on coronaviruses at the Wuhan Institute and hoarding masks and other PPE that otherwise would have been available for purchase in the U.S. constitute such commercial activity. Yet, the commercial activity exception generally applies when a foreign state behaves like a commercial actor, and not in a governmental capacity. Conducting virus research and stockpiling PPE are actions easily depicted as governmental in nature, and not purely commercial, and this is especially true given the need for every nation to prepare for novel pathogens and the pandemics they might trigger. Moreover, the complaint’s allegations that Chinese officials suppressed information about early infections, failed to quarantine exposed individuals quickly, and allowed travelers in and out of Wuhan for too long are not commercial actions; rather, they are the actions of a state governing—perhaps very poorly—during a worsening disease outbreak.

As a fallback, Missouri claims that the tort exception to FSIA also applies, but the prospects here are poor. This exception has been interpreted narrowly and never has been used to extinguish foreign immunity in the case of a pandemic. Moreover, the statute provides that this exception does not apply to “any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function regardless of whether the discretion be abused.” Again, decisions of the Chinese government to withhold or release information, to permit or stop travel, and to begin or delay quarantines of exposed individuals are all discretionary governmental determinations, and so they are excluded from this exception.

Factual Flaws of Missouri’s Complaint

Worse than these legal flaws, however, is Missouri’s decision to accuse China of a coronavirus misinformation campaign while simultaneously attempting to pass-off conspiracy theories and falsehoods as facts. Most fundamentally, a central claim of the complaint—that SarsCoV-2 was man-made in a Chinese lab—has been debunked, and reports about the inaccuracy of this conspiracy theory were available before and at the time Missouri drafted its complaint. Multiple Fox News stories, which ran in mid-April, claiming that SarsCoV-2 was made in a lab, were cited by Missouri in its lawsuit. And, while Fox News itself issued a report correcting its own news before the lawsuit was filed, that information did not make it into the complaint.

Throughout the complaint, Missouri implies that China acted deliberately to harm the global community. “The virus unleashed by the Communist Party of China and the Chinese government has left no community in the world untouched.” The allegations that Chinese officials were slow to react to mounting infections, that they denied human-to-human transmission until it was impossible to ignore, that they refused to allow American scientists into China to observe, and that they hoarded PPE are all designed to depict China as, at best, reckless in the face of a global public health emergency.

Conclusion

We are not here to defend China. Its conduct was irresponsible, even reprehensible, and it contributed to the scope of the pandemic today. But so too were the actions and inactions of nearly every country, including the United States. The Trump administration and several state governments—including Missouri’s—ignored the warning signs in China until it was too late. They downplayed infections in Italy, and the first infections in the U.S. Wishful thinking passed for policy until there was no denying reality. Now, rather than cope with the complicated truth, Missouri’s Attorney General—mimicking discourses emanating from the federal government—has used this lawsuit to write a melodrama. It casts China as the mustache-twisting villain and Missourians as the damsel tied to the tracks as a coronavirus train rounds the corner full speed ahead.

While much of the United States’ inadequate response to COVID-19 is attributable to basic failures in pandemic preparedness and flawed early-stage interventions—recall, among other examples, the extinction of the Directorate for Global Health Security and Biodefense at the National Security Council in 2018, or the lack of COVID-19 tests months into the pandemic—there is also a strategic component to the Missouri lawsuit that helps pave the way for the United States to turn finger-pointing at China into a tool of economic retaliation. On April 30th, it was reported that the Trump Administration was planning to impose economic sanctions on China for its role in the pandemic—a role that has been grossly overblown by the Administration and echoed in the Missouri lawsuit, and for which the United States is not allowed to retaliate under international law. As reported, these sanctions are aimed at curtailing the growth of strategic sectors of the Chinese economy, a move already attempted before the outbreak through the imposition of tariffs. If new sanctions are indeed imposed, the trade war between the two countries will enter a new chapter, brought about by the instrumentalization of a public health crisis for economic purposes. The (mis)use of the judicial process to shift the blame abroad in the Missouri lawsuit is but one piece of a larger plan with an increasingly visible economic agenda.

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