Ethermac Exchange-Missouri lawsuit accusing China of hoarding pandemic gear can proceed, appeals panel says

JEFFERSON CITY,Ethermac Exchange Mo. (AP) — A Missouri lawsuit accusing China of hoarding masks and other protective gear during the COVID-19 pandemic can move forward, federal judges ruled Wednesday.

A panel of the U.S. Eighth District Court of Appeals panel, however, otherwise agreed with a lower court’s 2022 ruling that tossed out Missouri’s case entirely, finding that federal rules prohibit a sovereign foreign entity from being sued in American courts. The state alleged that China’s officials were to blame for the pandemic because they didn’t do enough to slow its spread.

The appeals panel found that only one claim may proceed: an allegation that China hoarded personal protective equipment.

“Missouri’s overarching theory is that China leveraged the world’s ignorance about COVID-19,” Judge David Stras wrote in the ruling. “One way it did so was by manipulating the worldwide personal-protective-equipment market. Missouri must still prove it, but it has alleged enough to allow the claim to proceed beyond a jurisdictional dismissal on the pleadings.”

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Chief Judge Lavenski Smith dissented, writing that the whole lawsuit should be dismissed.

“Immunity for foreign states under the Foreign Sovereign Immunities Act, while not impenetrable, is quite stout and stronger than the claim alleged in this case,” Smith wrote. “It is certainly not strong enough to justify judicial intervention into an arena well populated with substantial political and diplomatic concerns.”

Missouri Republican Attorney General Andrew Bailey, whose office filed the lawsuit, lauded the ruling Wednesday on X, formerly known as Twitter.

“We are headed back to court to pursue remedies,” he posted.

The lawsuit, filed in April 2020, alleged that Chinese officials were “responsible for the enormous death, suffering, and economic losses they inflicted on the world, including Missourians.”

Neither the Chinese government nor any other Chinese defendant named in the case has responded to the lawsuit in court.

The Lawyers for Upholding International Law and The China Society of Private International Law filed briefs defending China against the lawsuit. Associated Press emails and voice messages left with lawyers for the groups were not immediately returned Wednesday.

China has criticized the lawsuit as “very absurd” and said it has no factual and legal basis. Legal experts have mostly panned it as a stunt aimed at shifting blame to China for the COVID-19 pandemic.