At Least Four Class-Action Suits Filed Against China, Seeking Trillions Over Coronavirus Outbreak in U.S.

Wuhan
This photo taken on April 15, 2020, shows a man wearing a face mask as he offers prawns for sale at the Wuhan Baishazhou Market in Wuhan in China's central Hubei province. HECTOR RETAMAL/AFP/Getty

At least four federal class-action lawsuits have been filed against the Chinese government that aim to recover trillions of dollars in damages for what plaintiffs allege is China's failure to contain the coronavirus outbreak and notify the international community about its dangers.

In one suit filed in late March, a coalition of California property managers and an accounting firm are seeking to represent all "small businesses" in California that have suffered as a result of COVID-19, the disease caused by the novel coronavirus. A suit filed in mid-March by several Florida residents aims to assemble its own class of millions of people.

Larry Klayman, a conservative lawyer and founder of the group Freedom Watch, is leading another class-action complaint accusing China of releasing a "biological weapon" into the public.

All of the suits accuse the Chinese government of direct complicity in the COVID-19 outbreak and hope to use the machinery of the U.S. legal system to recover enormous amounts in damages. But the chance these actions will lead to any actual recoveries is slim, legal experts said.

The lawsuits will already face a substantial barrier in attempting to bring the Chinese into U.S. courts, explained Chimène Keitner, a professor of international law at the University of California, Hastings College of Law, and a former State Department Civil Service employee.

According to Keitner, the Foreign Sovereign Immunities Act of 1976 (FSIA) provides foreign governments blanket immunity from most U.S.-tried lawsuits, carving out exceptions only in a few narrow circumstances.

"The baseline grant of immunity is a fact of life in international relations," Keitner told Newsweek. "So the entire premise of the act is codifying the immunity of foreign states."

Keitner said she believes that the exemptions invoked in these four lawsuits are misguided. Several complaints, for example, cite the wet market in Wuhan, believed to be the source of China's outbreak, as an example of how negligence contributed to the virus' spread. However, for China to be held accountable for "commercial activity" such as a market, the government would have to be directing or operating the activity itself.

The commercial activity would also have to be conducted in the private marketplace: lawsuits citing potentially improper practices at the nearby Wuhan Institute of Virology could fail because, as the U.S. Supreme Court has ruled, an entity like the government-run institute might not be acting "in the manner of a private player within" the market.

Another popular exemption cited in these suits would require China to have a mandatory duty to issue specific warnings about the virus. Keitner said she does not believe this claim will find warm reception with the courts, either.

"The Chinese government, when it is acting in China, does not have any affirmative duties under United States law," observed Keitner.

The alleged act of wrongdoing here would also have to have taken place in the United States, not just the resultant harm.

Wuhan
This photo taken on April 15, 2020, shows a worker wearing a face mask as he throws ice into a pool with fish at a shop at the Wuhan Baishazhou Market in Wuhan in China's central Hubei province. HECTOR RETAMAL/AFP/Getty

Kent Schmidt, a California attorney who specializes in business and class-action litigation, noted another hurdle, expressing doubt that a federal judge will let any of the lawsuits represent a class as numerous as they are desiring. He said the chance of this was "absolutely zero."

"Every time a plaintiff wants to certify a class, they have to show that the class is manageable," explained Schmidt. "This is just an example of why you can't have a class of everyone who has been impacted by COVID-19. It's just not feasible."

But even among detractors, there was little disagreement that China bore much responsibility for the wreckage, albeit one that may not have immediate recourse in the U.S. court system.

"There's no doubt China bears a huge deal of blame in the moral sense, and responsibility in the international sense, for not containing this outbreak sooner," said Keitner. "But U.S. courts are not in a position to provide individual redress to those harmed here."

Klayman, the conservative lawyer, disagreed. His lawsuit, seeking to represent all Americans whose health or finances have been injured by the virus, is operating under a separate and rarely used liability exemption that allows lawsuits to proceed based on acts of international terrorism.

"The reason China has no immunity is because we allege they violated international conventions and treaties in terms of creating what is, in effect, a biological terrorist weapon," he told Newsweek.

Convincing a judiciary deferential to immunity grants will be challenging, especially when trying to prove that China's conduct meets the definition of international terrorism, a high bar.

But Klayman claimed he has "whistleblowers with firsthand knowledge" of China's involvement in the viral outbreak who are currently residing in Israel and the United States and who can help substantiate this charge.

"The American people should not have to pay for the damage," he said. "Communist China should have to pay for the damage."

Representatives for the Chinese Foreign Ministry did not return a request for comment.

In response to a request for comment, Matthew T. Moore, an attorney representing the class-action lawsuit in Florida, accused the Chinese government of actively concealing "the true dangers of COVID-19 when it could have been contained, allowing it to spread across the world."

"Case law since the FSIA was enacted in 1976 has provided enhancements to the FSIA exemptions, where a foreign state has acted egregiously against the precepts of humanity, and failed to warn about a known danger," Moore told Newsweek in a written statement. "The intolerable and direct impacts of COVID-19 on U.S. citizens and businesses are unprecedented, and we know China failed to warn anyone and silenced those who tried. There is a clear path to jurisdiction here."

Keitner said that the diplomatic or political process should have to resolve outstanding grievances with China's behavior once the dust has settled, an approach that she believes has been undermined by the Trump administration's foreign policy.

"This is a very clear example of how our own actions vis-a-vis international institutions have deprived us of any soft power we might otherwise have had in naming and shaming China, or in getting them to agree to any other binding mechanism," she said. "I have little faith we could get a binding international judgment that China would comply with anyway."

At Least Four Class-Action Suits Filed Against China, Seeking Trillions Over Coronavirus Outbreak in U.S. | U.S.