How Can China Respond to the Coronavirus-Related Lawsuits Against It?

Over the past several months, individuals, companies and even U.S. states have sued China, Chinese officials, Chinese governmental entities, the Chinese Communist Party, and Chinese companies and their American subsidiaries for their alleged role in spreading the coronavirus. Last week, PetroChina International (America), Inc., an American subsidiary of the Chinese company, became the first defendant to make an appearance in any of these cases.

PetroChina may also be the last. Usually, defendants in American courts have no choice but to appear before a judge. But China—along with its subdivisions, agencies and instrumentalities—is situated differently than most defendants. As a foreign sovereign state, it can take a more creative approach to litigation. In other words, China has choices.

Political Context and Constraints 

China’s choices are framed by the politics of the moment. Lawsuits never exist in a vacuum. That is especially true of lawsuits targeting foreign states, which by nature implicate political concerns and issues. But the lawsuits that have been brought against China occupy a hyper-politicized category of their own, standing as they do at the bustling crossroads of great power politics, populism and domestic partisanship.

Even before the first lawsuit, the Trump administration had already pointed the finger at China for failing to halt the novel coronavirus’s spread (a fact noted in many of the complaints). Since then, the bilateral relationship has taken a decided turn for the worse, with the administration adopting an increasingly hard line. For example, on July 22, the United States abruptly ordered China to close its consulate in Houston, citing attempts by Chinese diplomats to aid economic espionage efforts and help steal intellectual property. The next day, Secretary of State Mike Pompeo gave a hawkish speech about the Chinese Communist Party—one of four made in the past two months by high-ranking administration officials. In early August, citing China’s perceived attempt to abridge—and potentially extinguish—Hong Kong’s autonomy, the United States introduced new, stringent trade regulations on the former British colony. The United States has also dispatched a Cabinet secretary to Taiwan, opened fronts against Chinese social media companies, levied new rounds of human rights-related sanctions, escalated its fight against Huawei’s control of 5G networks and issued new sanctions against China for its activities in the South China Sea.

Nor is an increasingly hardline posture limited to the executive branch. Although China has demonstrated anger over the lawsuits, on July 30 the Senate Judiciary Committee approved the Civil Justice for Victims of China-Originated Viral Infections Diseases (COVID) Act, which would amend the Foreign Sovereign Immunities Act (FSIA) to permit lawsuits against China for its alleged negligence in spreading the coronavirus. Although the bill is likely to fail on the Senate floor, the committee’s approval sends a powerful message: At least some members of Congress are willing to risk diplomatic blowback in order to take action that they understand as holding China accountable.

China’s Choices

Dozens of lawsuits are filed every year in the United States against foreign states, which typically decide how to respond to these suits by considering the practical and reputational consequences in light of the political context. States are more likely to contest a suit if they have assets that private litigants could potentially reach, whether in the country of suit or other countries where litigants could enforce judgments they win. At the same time, states may be less likely to respond if they think they can make the suits go away through nonlegal means, including diplomatic carrots and sticks. And states often also care about their reputations. Many are loath to appear as if they are trying to evade justice. Some consider the mere existence of suits against them an affront to their dignity.

China has not yet made an appearance in any of the coronavirus suits, but it will soon have to decide how it wants to defend itself and its subdivisions, agencies and instrumentalities. (We assume here that China will be coordinating the litigation on behalf of all government entities and officials that have been sued, and thus use “China” to refer to all nonprivate defendants other than the Chinese Communist Party.) As we see it, China has three basic options: (1) It can choose to litigate the suits; (2) it can choose to ignore them; or (3) it can choose a hybrid approach, in which it fails to formally appear in court but nevertheless makes its legal position known through other means. Each of these options has its advantages and disadvantages.

Option 1: Fully Participate in the Lawsuits 

China has one excellent reason to litigate these suits: It is very likely to win them.

As we wrote previously, the Foreign Sovereign Immunities Act will likely be China’s first line of defense. The act presumptively deprives federal courts of jurisdiction over civil suits brought against foreign states. But this immunity is overcome if the plaintiffs can show that their suits fall into one of the act’s few narrow exceptions. Several commentators have clearly delineated how and why the FSIA likely precludes coronavirus-based suits against China, and the Congressional Research Service has indicated it holds the same view. We won’t go into the details here, but suffice it to say that the suits against China and its state agencies are likely to be dismissed because they do not fall within any of the act’s exceptions. (Whether the Chinese Communist Party is covered by the FSIA is a more complicated question that we won’t get into here.) Similarly, any claims against sitting state officials are also likely to be dismissed under a common-law theory of sovereign immunity for foreign officials.

Even if China were to lose on immunity grounds, there are several other affirmative defenses that it could assert. First, China could argue that the cases should be dismissed on the basis of the doctrine of forum non conveniens, which is based on the idea that suits should be litigated wherever it makes the most sense to hear the case. Courts are likely to at least consider dismissal on that basis in cases such as these, where the defendants are foreign and their alleged actions occurred entirely abroad. Second, China could argue that the cases should be dismissed

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