{"id":5494,"date":"2021-10-20T09:18:05","date_gmt":"2021-10-20T13:18:05","guid":{"rendered":"https:\/\/journals.law.harvard.edu\/nsj\/?p=5494"},"modified":"2021-10-23T16:14:14","modified_gmt":"2021-10-23T20:14:14","slug":"20-wp-content-uploads-sites-keitner_the-foreign-sovereign-immunities-act-coronavirus-and-addressing-chinas-culpability-part-iii-pdf","status":"publish","type":"post","link":"https:\/\/journals.law.harvard.edu\/nsj\/2021\/10\/20-wp-content-uploads-sites-keitner_the-foreign-sovereign-immunities-act-coronavirus-and-addressing-chinas-culpability-part-iii-pdf\/","title":{"rendered":"The Foreign Sovereign Immunities Act, Coronavirus, and Addressing China\u2019s Culpability, Part III: Questions for the Record\u2014Private Litigation Will Likely Fail to Secure Relief for U.S. Victims"},"content":{"rendered":"

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

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

Introduction<\/strong><\/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]<\/a>\u00a0Professor 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 III in a series of works by Professor Keitner that the\u00a0Harvard National Security Journal<\/em>\u00a0will publish this year. Part I memorialized Professor Keitner\u2019s prepared written testimony.[2]<\/a>\u00a0This Part, along with one prior and one subsequent installment 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>\u00a0Congress 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>\u00a0Under 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>\u00a0Last 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, 2020 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 second point: that private litigation will likely fail to secure relief for U.S. victims.<\/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

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

A.\u00a0 The Foreign Sovereign Immunities Act (FSIA)<\/h2>\n

Q: There was some discussion at the hearing as to whether the Foreign Sovereign Immunities Act, 28 U.S.C. \u00a7 1605, currently permits civil suits against the Chinese government for harms arising from the coronavirus pandemic, including through China\u2019s alleged concealment of information pertaining to the coronavirus at the outset of the pandemic and alleged hoarding of medical and personal protective equipment.\u00a0<\/strong><\/p>\n

1.\u00a0 The Commercial Act, Territorial Tort, and Terrorism Exceptions<\/h3>\n

Q: Do you think it is likely that courts will hold that civil suits such as those filed by the States of Mississippi and Missouri against China for harms arising from the coronavirus pandemic can proceed under one or more of the exceptions to sovereign immunity delineated in the Act, such as the \u201ccommercial activity\u201d or \u201cterritorial tort\u201d exception? Why or why not? Please be specific with respect to the various categories of claims raised by the plaintiffs in these cases (e.g., claims based on China\u2019s alleged hoarding of equipment).<\/strong><\/p>\n

A: I have reviewed the claims in 16 civil suits filed against the Chinese government (listed in Table 1 on p. 11 of my written testimony). Although one can never predict judicial rulings with absolute certainty, a faithful interpretation and application of the FSIA consistent with binding Supreme Court precedent requires dismissing all of the claims, because they do not fall within an enumerated exception to foreign sovereign immunity.<\/p>\n

I should note, at the outset, that it is not enough for a plaintiff\u2019s allegations to fall within an enumerated exception to sovereign immunity in order to proceed. As with any other civil suit, the plaintiff must also state a claim upon which relief can be granted.[7]<\/a> In other words, the plaintiff must plausibly allege that the defendant violated a law or failed to perform an obligation that applies to that defendant. It is not clear to me that the allegations in these complaints meet that standard.<\/p>\n

Most of the complaints attempt to fit their allegations within two statutory exceptions to sovereign immunity: (1) the commercial activity exception; and (2) the territorial tort exception. At least one complaint also invokes the exception for wrongful acts of foreign states in conjunction with acts of international terrorism on U.S. soil. This response addresses each in turn.<\/p>\n

i.\u00a0 Commercial Activity Exception, 28 U.S.C. \u00a7 1605(a)(2).<\/h4>\n

Certain plaintiffs allege that the defendants are not immune from the jurisdiction of U.S. courts because the action is \u201cbased upon \u2026 an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.\u201d<\/p>\n

Three core requirements must be met in order for this exception to apply: the \u201cbased upon\u201d requirement; the \u201ccommercial activity\u201d requirement; and the \u201cdirect effect\u201d requirement.<\/p>\n

The activities described in the complaints do not qualify as commercial activities within the meaning of the FSIA. As the Supreme Court made clear in Republic of Argentina v. Weltover<\/em>,[8]<\/a> \u201cwhen a foreign government acts, not as regulator of a market, but in the manner of a private player within it, the foreign sovereign\u2019s actions are \u2018commercial\u2019 within the meaning of the FSIA.\u201d[9]<\/a> That is because, under the \u201crestrictive\u201d theory of sovereign immunity codified in the FSIA, \u201ca state is immune from the jurisdiction of foreign courts as to its sovereign or public acts (jure imperii<\/em>), but not as to those that are private or commercial in character (jure gestionis<\/em>).\u201d[10]<\/a><\/p>\n

Under this framework, \u201ca foreign government\u2019s issuance of regulations limiting foreign currency exchange is a sovereign activity, because such authoritative control of commerce cannot be exercised by a private party; whereas a contract to buy boots or even bullets is a \u2018commercial\u2019 activity, because private companies can similarly use sales contracts to acquire goods.\u201d[11]<\/a> Moreover, \u201cthe question is not whether the foreign government is acting with a profit motive or instead with the aim of fulfilling uniquely sovereign objectives. Rather, the issue is whether the particular actions that the foreign state performs (whatever the motive behind them) are the type <\/em>of actions by which a private party engages in \u2018trade and traffic or commerce.\u2019\u201d[12]<\/a><\/p>\n

As I testified at the Committee\u2019s June 23 hearing, an allegation that a Chinese government owned company sold defective personal protective equipment (PPE) under a contract with a U.S. buyer would be a commercial activity within the meaning of the statute. That is not the type of activity alleged, however, in the complaints raising the commercial activity exception.<\/p>\n

For example, Mississippi\u2019s complaint cites the following reports about China\u2019s actions with respect to the global market for PPE as the basis for its allegations:<\/p>\n