The State of Missouri, ex rel. Eric S. Schmitt v. The Peoples Republic of China

90 F.4th 930
CourtCourt of Appeals for the Eighth Circuit
DecidedJanuary 10, 2024
Docket22-2495
StatusPublished
Cited by1 cases

This text of 90 F.4th 930 (The State of Missouri, ex rel. Eric S. Schmitt v. The Peoples Republic of China) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
The State of Missouri, ex rel. Eric S. Schmitt v. The Peoples Republic of China, 90 F.4th 930 (8th Cir. 2024).

Opinion

United States Court of Appeals For the Eighth Circuit ___________________________

No. 22-2495 ___________________________

State of Missouri, ex rel. Andrew Bailey, in his official capacity as Missouri Attorney General

Plaintiff - Appellant

v.

The People’s Republic of China; Communist Party of China; National Health Commission of the People’s Republic of China; Ministry of Emergency Management of the People’s Republic of China; Ministry of Civil Affairs of the People’s Republic of China; People’s Government of the Hubei Province; People’s Government of Wuhan City; Wuhan Institute of Virology; Chinese Academy of Sciences

Defendants - Appellees

------------------------------

The Lawyers for Upholding International Law

Amicus Curiae

The China Society of Private International Law

Amicus on Behalf of Appellee(s) ____________

Appeal from United States District Court for the Eastern District of Missouri - Cape Girardeau ____________

Submitted: February 16, 2023 Filed: January 10, 2024 ____________

Before SMITH, Chief Judge, STRAS and KOBES, Circuit Judges. ____________

STRAS, Circuit Judge.

The COVID-19 pandemic led to a tragic loss of life and had financial effects worldwide. Missouri seeks to recover from various Chinese defendants, including the government itself, for the impact the disease had on its own economy and the health and economic security of its citizens. It turns out that the Foreign Sovereign Immunities Act stands in the way of most of its claims. Just one survives: the allegation that China hoarded personal-protective equipment while the rest of the world was in the dark about the disease. We reverse the dismissal of Missouri’s hoarding claim, but otherwise affirm.

I.

Missouri’s position is that China is to blame for COVID-19. In its view, negligence led to the virus’s escape from the laboratories at the Wuhan Institute of Virology. From there, the Chinese government allowed the virus to spread all over the world and engaged in a campaign to keep other countries from learning about it. In the meantime, the Chinese government bought up masks (and other types of personal-protective equipment). Hoarding them allowed China to sell lower-quality masks as the outbreak spread. These actions cost the state thousands of lives and “tens of billions” of dollars in economic damage.

Missouri now seeks to hold various Chinese entities responsible. None of the defendants has appeared in court, even through counsel. Their absence led the clerk

-2- of court for the Eastern District of Missouri to enter a default. See Fed. R. Civ. P. 55(a).

The default never became a judgment, however, because the district court questioned its own subject-matter jurisdiction under the Foreign Sovereign Immunities Act. See 28 U.S.C. § 1604; see also Brewer v. Socialist People’s Republic of Iraq, 890 F.2d 97, 101 (8th Cir. 1989) (explaining that, “even if a party fails to enter an appearance and assert its claim of immunity,” courts must still determine if “immunity is available” under the Foreign Sovereign Immunities Act). It concluded that each of the defendants had immunity, which both deprived it of subject-matter jurisdiction and required dismissal of every claim in Missouri’s complaint.

We must determine whether the district court made the right call. See LeMay v. USPS, 450 F.3d 797, 799 (8th Cir. 2006) (explaining that our review is de novo). In doing so, we look to “the allegations in [Missouri’s] complaint, which we must accept as true.” Siderman de Blake v. Republic of Argentina, 965 F.2d 699, 707–08 (9th Cir. 1992). The district court limited itself to those allegations, so we do too. Cf. BP Chems. Ltd. v. Jiangsu Sopo Corp., 285 F.3d 677, 680 (8th Cir. 2002) (construing a Foreign Sovereign Immunities Act challenge as a facial attack on subject-matter jurisdiction).

II.

The Foreign Sovereign Immunities Act sets the ground rules for when American courts “may exercise jurisdiction over a foreign state.” Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 610–11 (1992); see also 28 U.S.C. § 1604 (stating that a “foreign state shall be immune from the jurisdiction of the courts of the United States and of the States” (emphasis added)). It turns out that every defendant Missouri has sued qualifies as one.

-3- We start with the easiest calls. The People’s Republic of China is the country’s officially recognized government, the “body politic that governs [the] territory.” Samantar v. Yousuf, 560 U.S. 305, 314 (2010); see also OI Eur. Grp. B.V. v. Bolivarian Republic of Venezuela, 73 F.4th 157, 169 (3d Cir. 2023) (explaining that a foreign state is “the body politic—the country or nation”). No doubt, it is a foreign state.

So are the National Health Commission, the Ministry of Emergency Management, and the Ministry of Civil Affairs. As Missouri’s complaint explains, each is part of the government. See 28 U.S.C. § 1603(a) (recognizing that a state “includes [its] political subdivision[s]”); see also Berg v. Kingdom of Netherlands, 24 F.4th 987, 992–94 (4th Cir. 2022) (treating Dutch ministries as “political subdivisions”); Garb v. Republic of Poland, 440 F.3d 579, 594 (2d Cir. 2006) (calling Poland’s Ministry of the Treasury “an integral part of Poland’s political structure” (citation omitted)).

The Chinese Communist Party may look like a nongovernmental body at first glance, but in the complaint’s words, it “exercise[s] direction and control over the actions of all other Defendants,” including China’s official government. Given its role, it is in substance the same “body politic that governs [China].” 1 Samantar, 560 U.S. at 314; see Kirschenbaum v. Assa Corp., 934 F.3d 191, 196 (2d Cir. 2019) (“[A]n entity can be a ‘foreign state’ if it is an alter ego of a foreign state.”); The American Heritage Dictionary 1706 (5th ed. 2016) (defining the “state” as “[t]he supreme public power within a sovereign political entity”); see also Siderman de Blake, 965 F.2d at 707–08 (explaining that we must accept the allegations in the complaint as true).

1 It is true that Missouri denies that the Communist Party is a “foreign state.” 28 U.S.C. §§ 1603(a), 1604. But we do not have to accept the complaint’s legal conclusions as true, only its factual allegations. It falls upon us, after all, to “determine whether immunity is available.” Brewer, 890 F.2d at 101. -4- The definition of “foreign state” in the Foreign Sovereign Immunities Act also covers other entities. See Big Sky Network Can. Ltd. v. Sichuan Provincial Gov’t, 533 F.3d 1183, 1189 (10th Cir. 2008). One is a “political subdivision of a foreign state.” 28 U.S.C. § 1603(a).

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