{"id":5418,"date":"2021-03-30T17:00:24","date_gmt":"2021-03-30T21:00:24","guid":{"rendered":"https:\/\/journals.law.harvard.edu\/nsj\/?p=5418"},"modified":"2021-05-17T11:39:33","modified_gmt":"2021-05-17T15:39:33","slug":"the-foreign-sovereign-immunities-act-coronavirus-and-addressing-chinas-culpability-part-ii-questions-for-the-record-benefits-to-the-united-states-from-foreign-sovereign-immunity","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/nsj\/2021\/03\/the-foreign-sovereign-immunities-act-coronavirus-and-addressing-chinas-culpability-part-ii-questions-for-the-record-benefits-to-the-united-states-from-foreign-sovereign-immunity\/","title":{"rendered":"The Foreign Sovereign Immunities Act, Coronavirus, and Addressing China\u2019s Culpability, Part II: Questions for the Record\u2014Benefits to the United States from Foreign Sovereign Immunity"},"content":{"rendered":"

Chim\u00e8ne Keitner<\/strong><\/em>[*]<\/a><\/p>\n

[This essay is available in PDF at\u00a0this link<\/a>]<\/p>\n

Introduction<\/h1>\n

On June 23, 2020, the Senate Judiciary Committee held a hearing on \u201cThe Foreign Sovereign Immunities Act, Coronavirus, and Addressing China\u2019s Culpability.\u201d[1]<\/sup><\/a> Professor Chim\u00e8ne Keitner submitted written testimony, answered questions at the hearing, and provided written responses to follow-up Questions for the Record from committee members. This is Part II in a series of works by Professor Keitner that the Harvard National Security Journal<\/em> will publish this year. Part I memorialized Professor Keitner\u2019s prepared written testimony.[2]<\/a> This Part, along with the subsequent installments in this series, contains Professor Keitner\u2019s detailed responses to 39 Questions for the Record (QFRs).<\/p>\n

The basic question at issue in the hearing was whether Congress should amend the Foreign Sovereign Immunities Act to permit civil suits against foreign states for injuries arising from a pandemic. U.S. courts generally refrain from adjudicating claims arising from the sovereign or governmental acts of other countries, both as a matter of comity and because foreign sovereign immunity is a binding rule of international law. Nation-states are not immune, however, from the jurisdiction of foreign courts for claims arising from their commercial activities.[3]<\/a> Congress enacted the Foreign Sovereign Immunities Act (FSIA) in 1976 to codify this distinction and to provide a jurisdictional basis for civil claims against foreign states and their agencies and instrumentalities.[4]<\/a> Under the FSIA, foreign states and their agencies and instrumentalities are immune from civil suit in U.S. courts unless a claim falls within an enumerated exception to immunity under the Act.[5]<\/a> Last year, several Republican members of Congress proposed amending the FSIA to create an exception to foreign sovereign immunity for countries whose acts or omissions contributed to the COVID-19 pandemic in the United States. These proposals formed the subject of the June 23 hearing.[6]<\/a><\/p>\n

Professor Keitner\u2019s opening statement on June 23 focused on three main points:<\/p>\n

First, the United States has more to lose than any other country by removing the shield of foreign sovereign immunity for a pandemic;<\/p>\n

Second, private litigation will not bring China to the negotiating table, and it will not produce answers or compensation for U.S. victims;<\/p>\n

Third, Congress should focus instead on the inadequate federal response to COVID-19, and on restoring U.S. leadership in global public health.<\/p>\n

This Part includes Professor Keitner\u2019s responses to Senators\u2019 questions related to the first point: that creating an exception to foreign sovereign immunity for the COVID-19 pandemic would disproportionately harm the United States.<\/p>\n

The responses to the Questions for the Record below have been edited and organized for clarity and readability. They identify the Senator who asked each question and the text of each question in bold, followed by Professor Keitner\u2019s responses.<\/p>\n

<\/a>I.\u00a0\u00a0\u00a0\u00a0\u00a0 Senator Feinstein<\/h1>\n

<\/a>A.\u00a0\u00a0\u00a0\u00a0 Transboundary Harm and Trail Smelter<\/h2>\n

<\/a>1.\u00a0\u00a0\u00a0\u00a0 The Doctrine of Transboundary Harm under Customary International Law<\/h3>\n

Q: Your colleague Professor Miller testified at the hearing that China may be liable for its behavior concerning the coronavirus pandemic under the international law principle of transboundary harm and that allowing civil suits to proceed against China might encourage a negotiated or arbitrated settlement between the U.S. and Chinese governments, citing as precedent the Trail Smelter <\/em>case and the settlement of claims with the Libyan government arising from the Lockerbie bombing.<\/strong><\/p>\n

If Congress were to amend the Foreign Sovereign Immunities Act to permit private lawsuits against China for harms arising from the coronavirus, do you think that would further affirm the legitimacy of the doctrine of transboundary harm under customary international law? Why or why not?<\/strong><\/p>\n

A: It might be tempting to analogize the spread of a virus to cross-border pollution or other causes of transboundary harm, but the analogy is flawed for a number of reasons. As global health law expert David Fidler has emphasized, \u201c[s]tates have not been keen to use customary law on state responsibility in the infectious disease context because of how political and epidemiological considerations align.\u201d[7]<\/a> This is because \u201c[p]athogenic threats with the potential for cross-border spread can appear in any country. \u2026 This reality creates a shared interest among states not to litigate disease notification issues.\u201d[8]<\/a><\/p>\n

U.S. practice can certainly shape the evolution of customary international law, particularly when it is accompanied by what international lawyers call opinio juris<\/em>\u2014a belief that acting, or refraining from acting, is legally required. Creating additional exceptions to the FSIA would not directly affect the legitimacy of the doctrine of transboundary harm, as framed in this question, because jurisdictional immunity has nothing to do with substantive legal doctrines governing the attribution of conduct, imposition of liability, or calculation of damages. The question of immunity speaks solely to whether or not a domestic court can exercise jurisdiction over a sovereign defendant in a given dispute.<\/p>\n

A forthcoming student note in the Columbia Journal of Transnational Law <\/em>argues that U.S. courts should interpret the existing commercial activity exception in the FSIA to cross- border pollution by foreign state-owned-enterprises (SOEs) that cause harm within U.S. borders. This would go beyond what current case law permits. However, the proposal illustrates a relevant point, which is that treating the emission of pollution by SOEs as commercial activity, rather than sovereign conduct, could bring more claims for transboundary harm within the jurisdiction of U.S. courts.[9]<\/a><\/p>\n

Implementing such a proposal could contribute to shaping the parameters of the commercial activity exception under customary international law. Case law generated by claims against foreign SOEs could eventually also contribute to shaping the international law of liability for transboundary harm in the environmental law context, if that is Congress\u2019s goal. As the note\u2019s author explains, \u201c[b]ecause the transboundary harm principle is a limitation on the right of a state to control its natural resources, it follows that a state has no right to exploit its resources in a manner that causes harm within the borders of another state.\u201d[10]<\/a><\/p>\n

In the environmental law context, as in the pandemic context, states\u2019 decisions about what foreign conduct to treat as immune from domestic jurisdiction, and what foreign conduct to treat as unlawful, shape the international law rules that apply to them as well. We cannot control whether foreign courts apply robust standards of pleading and proof. Consequently, broader exceptions to immunity, and broader standards of liability for transboundary harm, will lead to increased legal exposure for the United States. This could be a positive development, if it incentivizes decision-makers to regulate emissions more stringently, and to be more transparent about data relating to the spread of infectious disease. However, from a legal risk perspective, Congress should not broaden exceptions to immunity unless it is also prepared to take on this more ambitious regulatory agenda.<\/p>\n

<\/a>2.\u00a0\u00a0\u00a0\u00a0 Applying the Doctrine of Transboundary Harm to Environmental Harms Caused by Nation-States<\/h3>\n

Q: What would be the implications of applying this principle, as interpreted by Professor Miller as applying to China\u2019s behavior concerning the coronavirus pandemic, in the context of environmental harms caused by nation-states? For example, under the principle of transboundary harm, would a government\u2019s refusal to take responsible actions to lower its carbon emissions potentially expose it to liability for any environmental harms arising from that practice, such as climate change?<\/strong><\/p>\n

A: Yes. This is why, in 1934, the State Department made clear to Canada that \u201cits proposal [to set a maximum standard for emissions] was limited to the Trail smelter, that it did not contemplate the \u2018establishment of any principles,\u2019 and that it was neither desirable nor necessary to make the case into a precedent.\u201d[11]<\/a> Consent-based caps on carbon emissions can be (and have been) negotiated in the context of multilateral environmental law treaties.<\/p>\n

A more fulsome application of the transboundary harm principle by domestic and international tribunals would produce a very different (and likely healthier) world than the one we currently inhabit. As Professor Rebecca Bratspies commented following the Committee\u2019s June 23 hearing, \u201c[g]iven the United States\u2019 historic skepticism of this project [to codify principles of state responsibility], it was particularly encouraging to see Senators Lindsay Graham, Ted Cruz, and others taking positions that seem to embrace the core of these Draft Articles,\u201d including with respect to state liability for transboundary harm.[12]<\/a> That said, Professor Bratspies also noted that \u201c[it] is unclear how the Trump administration, which just purported to withdraw from the [World Health Organization], would be in a position to claim that China\u2019s purported breach of the [international health] regulations should be justiciable in its domestic courts.\u201d[13]<\/a><\/p>\n

Professor Bratspies, whose expertise lies specifically in international environmental law and environmental regulation, has emphasized that \u201c[n]o doubt, many climate activists in the United States and around the world are carefully monitoring the possibility that the United States will set a precedent of waiving sovereign immunity for state actions that fail to prevent grave global public health concerns so that the precedent can be used to hold the U.S. government accountable.\u201d[14]<\/a> If Congress wants to take bold steps to protect the planet, then embracing state liability for transboundary harm and eliminating both domestic and foreign sovereign immunity for actions or omissions that harm global public health could help further this important goal.<\/p>\n

<\/a>3.\u00a0\u00a0\u00a0\u00a0 The Alien Tort Claims Act and Private Lawsuits Against the United States<\/h3>\n

Q: Does the Alien Tort Claims Act, 28 U.S.C. \u00a7 1350, permit private lawsuits against the United States for its transboundary harms? If not, should the Act be amended to permit such lawsuits consistent with the principle of transboundary harm?<\/strong><\/p>\n

A: The Alien Tort Statute (ATS or ATCA) was enacted in 1789 as part of the Judiciary Act to establish federal subject-matter jurisdiction over civil claims brought by aliens for certain violations of international law. The scope of litigation permitted under this jurisdictional grant remains uncertain, as the Supreme Court recently granted review in two cases involving alleged U.S. corporate funding of child slavery overseas.[15]<\/a> As interpreted by the Supreme Court, the ATS provides federal jurisdiction (and a common-law cause of action) for violations of specific, universal, and obligatory rules of international law, if the claim \u201ctouch[es] and concern[s] the territory of the United States\u00a0.\u00a0.\u00a0.\u00a0with sufficient force to displace the presumption against extraterritorial application\u201d of U.S. Statutes.[16]<\/a><\/p>\n

In U.S. courts, the Federal Tort Claims Act, rather than the ATS, presents the main obstacle to recovering damages from the U.S. government. The Congressional Research Service\u2019s overview of the FTCA provides a useful guide to relevant issues.[17]<\/a> As the CRS report explains, \u201cthe FTCA imposes significant substantive limitations on the types of tort lawsuits a plaintiff may permissibly pursue against the United States.\u201d[18]<\/a> Of particular note, 28 U.S.C. \u00a7 2680(k) preserves the United States\u2019 sovereign immunity in U.S. courts for \u201cany claim arising in a foreign country.\u201d[19]<\/a> The Supreme Court has interpreted this exception to \u201cbar[] all claims based on any injury suffered in a foreign country, regardless of where the tortious act or omission occurred.\u201d[20]<\/a><\/p>\n

As Professor Miller and Mr. Starshak note in a Just Security <\/em>post, \u201c[t]he most permissive interpretations of the Foreign Sovereign Immunity [sic<\/em>] Act and the Alien Tort Statute do not seem to point the way toward liability for another country\u2019s sovereign acts.\u201d[21]<\/a> The same is currently true for civil suits brought against the U.S. government.<\/p>\n

The FTCA\u2019s foreign country exception has been understood as intended to shield the United States from liability under foreign law, because choice of law principles would likely lead a U.S. court to apply foreign law to claims arising overseas. If Congress wanted to create opportunities for U.S. courts to develop and apply the doctrine of transboundary harm, Congress might consider narrowing this exception to the FTCA\u2019s waiver of sovereign immunity for claims that involve violations of firmly established rules of international law.<\/p>\n

The FTCA does not apply to claims brought against U.S. companies. Interestingly, the 2019 National Environmental Law Moot Court Competition involved a hypothetical claim brought by the \u201cOrganization of Disappearing Island Nations\u201d and other plaintiffs against the fictitious multinational corporation HexonGlobal. The questions presented on appeal to the imagined Twelfth Circuit included whether the Trail Smelter <\/em>principle is a recognized principle of international law for purposes of bringing suit under the Alien Tort Statute.[22]<\/a><\/p>\n

The proliferation of climate change litigation in domestic and international fora suggests that this type of claim is more than just hypothetical.[23]<\/a> Scholars have noted evidence in support of \u201can international norm against transboundary harm in the form of climate change impacts.\u201d suggesting that \u201ca climate change claim may succeed [under the ATS] where other environment claims have failed because climate change necessarily involves transboundary harm.\u201d[24]<\/a><\/p>\n

<\/a>B.\u00a0\u00a0\u00a0\u00a0 Consequences of Domestic Suits Against Foreign States<\/h2>\n

<\/a>1.\u00a0\u00a0\u00a0\u00a0 Reciprocal Lawsuits Against the United States in Chinese Courts<\/h3>\n

Q: In your testimony, you indicated that the United States has \u201cthe most to lose\u201d by amending the Foreign Sovereign Immunities Act to permit civil suits against China like those filed by the States of Mississippi and Missouri.<\/strong><\/p>\n

What kinds of legal repercussions might we face from China if these lawsuits proceed? For example, might China permit or even encourage reciprocal lawsuits against the United States?<\/strong><\/p>\n

A: Private claimants have already filed claims against the United States in Chinese courts for injuries relating to COVID-19. These include claims against the U.S. Centers for Disease Control and Prevention (CDC) and the U.S. Department of Defense (DOD) for allegedly \u201ccovering up\u201d the emergence of the coronavirus.[25]<\/a> However, these suits cannot proceed under China\u2019s absolute view of foreign sovereign immunity, which does not even include a commercial activity exception. The same is true of another lawsuit filed in China against the United States that seeks compensation for \u201creputational damage done by President Donald Trump\u2019s use of the phrase \u2018the Chinese virus\u2019 to describe the coronavirus.\u201d[26]<\/a><\/p>\n

China conveyed its position in a June 2020 white paper that because \u201c[t]he novel coronavirus is a previously unknown virus[, d]etermining its origin is a scientific issue that requires research by scientists and doctors.\u201d In China\u2019s view, \u201c[i]t is both irresponsible and immoral to play the blame game in an attempt to cover up one\u2019s own shortcomings. China will never accept any frivolous lawsuits or compensation claims.\u201d[27]<\/a><\/p>\n

It seems less likely to me that we will see multiple direct reciprocal lawsuits in Chinese courts, and more likely that the negative impact on the United States will come from other potential Chinese retaliatory measures, and from the erosion of the norm of foreign state immunity in international law and in other countries\u2019 legal systems. That said, China could decide to follow Iran\u2019s lead by allowing Chinese nationals to file claims against a foreign state when that state has purportedly violated China\u2019s immunity. In Iran, the adoption of this measure has led to significant judgments against the United States.[28]<\/a> There would likely be more opportunities for Chinese claimants to execute on judgments issued by Chinese courts against U.S. assets in China than there currently are for Iranian claimants to execute on judgments issued by Iranian courts against U.S. assets (of which there are few or none) in Iran.<\/p>\n

It also appears that a special legislative committee of the National People\u2019s Congress (NPC) has been tasked with studying a proposal to \u201cformulat[e] a foreign states immunities law\u201d following what Ma Yide, a deputy to the NPC, called \u201cmalicious litigations raised in countries like the United States towards China over the COVID-19 response.\u201d[29]<\/a> China\u2019s official state-run news agency Xinhua has reported that \u201cMa suggested adopting a limited immunities principle, which is more commonly found in the United States, Canada, the United Kingdom and the European Union countries.\u201d[30]<\/a> The idea of a \u201climited immunities principle\u201d presumably refers to the restrictive theory of foreign sovereign immunity, which the FSIA codified in U.S. law in 1976, and which is reflected in the U.N. Convention on Jurisdictional Immunities of States and Their Property (not yet in force).[31]<\/a> However, China could also contemplate codifying other exceptions to immunity.<\/p>\n

It is also worth noting that China could claim that the United States is unlawfully violating its sovereign immunity by allowing suits to proceed, as Germany did when Italy allowed claims against Germany to proceed in Italian courts.[32]<\/a> There would not be a basis for the International Court of Justice to adjudicate such claims absent U.S. consent, but it is an additional legal response that China could choose to pursue if U.S. lawsuits proceed.<\/p>\n

<\/a>2.\u00a0\u00a0\u00a0\u00a0 Non-legal Repercussions from China<\/h3>\n

Q: What kinds of non-legal (e.g., diplomatic) repercussions might we face from China if these lawsuits proceed?<\/strong><\/p>\n

A: Ironically, some of the strategies that the United States appears to be contemplating to extract compensation from China would actually harm the United States. These effects would also be felt if China decided to take similar actions unilaterally. For example, Donald Boudreaux, Professor of Economics at George Mason University, explained in a letter to the editor of the Washington Post <\/em>that proposals to demand \u201cbillions in compensation\u201d from China were \u201chilariously inconsisten[t]\u201d with the Administration\u2019s other policy positions.[33]<\/a> Professor Boudreaux noted that, in order to obtain the billions of dollars required to satisfy a compensation demand, China would either have to \u201chand over to us goods for free\u201d or \u201cliquidate their investments in America.\u201d[34]<\/a> The first option would undermine the U.S. claim that the Chinese already sell goods to the United States \u201cat prices allegedly too low.\u201d[35]<\/a> The second option would require China to \u201cliquidate billions of dollars of their investments in dollar-denominated assets,\u201d which \u201cwould, as a practical matter, further lower the value of stocks and other assets in America and drive up interest rates.\u201d[36]<\/a><\/p>\n

China can use the same diplomatic tools to pressure the United States that the United States uses to pressure China. If China deems that lawsuits in U.S. courts violate the customary international law of sovereign immunity, China would also have a non-frivolous legal argument that it is entitled to take countermeasures that would ordinarily be internationally unlawful, but that can be justified in certain circumstances to induce another state to come back into compliance with its international legal obligations.<\/p>\n

There have already been tit-for-tat sanctions and visa bans between China and the United States on human rights matters.[37]<\/a><\/p>\n

There is also evidence that Missouri officials anticipated retaliation from China after Attorney General Eric Schmitt filed suit against China without the prior knowledge of Missouri Governor Mike Parson.[38]<\/a> Concerns included that China might turn away Missouri exports, restrict or confiscate the business license and registration from the state\u2019s China office, rescind all travel authorizations and visas for Missouri citizens and business executives, pull all Chinese students from Missouri, and\/or hack Missouri state government websites and other critical IT infrastructure.[39]<\/a><\/p>\n

It is also worth noting China\u2019s passage of the new Hong Kong national security law, which carries a penalty of up to life in prison for \u201csecession, subversion of state power, terrorism and collusion with foreign entities.\u201d[40]<\/a> Margaret Lewis, Professor of Law at Seton Hall Law School, has called the law \u201can efficient, official tool for silencing critics who step foot in Hong Kong.\u201d[41]<\/a> Unfortunately, it will be more difficult for the United States to object if China uses this law to penalize lawyers who work on controversial investigations and cases given the U.S. authorization of sanctions on International Criminal Court staff who conduct war crimes investigations that are deemed an affront to the United States.[42]<\/a><\/p>\n

<\/a>3.\u00a0\u00a0\u00a0\u00a0 Private Lawsuits Against the United States for Its Own Pandemic Response<\/h3>\n

Q: If Congress were to amend the Act to permit these civil suits, might other countries use this precedent to permit private lawsuits against the <\/strong>U.S. government for its own response to the coronavirus pandemic? Please explain the basis for your answer.<\/strong><\/p>\n

A: Yes, this result is certainly foreseeable. Although some countries currently have state immunity acts that would prohibit such actions (such as Canada, the United Kingdom, and Australia), others apply customary international law (such as New Zealand and Italy). Modifications to the FSIA would not immediately affect the content of customary international law on state immunities. However, it could have a cumulative effect over time, particularly if other countries decide to follow suit, as Canada did with the state sponsors of terrorism exception.<\/p>\n

Any act or omission by a U.S. federal, state, or local authority that resulted in failure to prevent, or that exacerbated, the spread of the novel coronavirus would appear to be actionable under Professor Miller\u2019s theory of transboundary harm. Even if such suits did not ultimately prevail on the merits, they would require deploying significant resources to address, including responding to discovery requests, engaging local counsel, and defending against attempts at pre-judgment attachment of assets or other measures that are currently prohibited under prevailing understandings of foreign sovereign immunity.<\/p>\n

Moreover, even if other countries have plausibility pleading standards akin to Rule 12(b)(6), these would not be difficult to satisfy under the proposed theories of liability and non-immunity. By way of example, reports from reputable news outlets in recent months have included the following:<\/p>\n