Court Opinion

ID: 9916752
Source: CourtListenerOpinion
Date Created: 2024-01-10 17:00:46.919476+00
Date Added: 2024-06-11T13:25:57.512314
License: Public Domain

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). Ministries qualify, as we explain above, because of
their direct connection to the official government. But so do provincial- and
township-level bodies like the People’s Government of the Hubei Province and the
People’s Government of Wuhan City. See Big Sky Network, 533 F.3d at 1189
(reaching this exact conclusion about Sichuan Province and Qingyang District in
China).

       The final category includes “agenc[ies] [and] instrumentalit[ies].” 28 U.S.C.
§ 1603(a). The key distinction between “political subdivision[s]” and “agenc[ies]
or instrumentalit[ies]” is that the latter two are, by definition, “separate legal
person[s]” from the government itself. Id. § 1603(b)(1); see Wye Oak Tech., Inc. v.
Republic of Iraq, 666 F.3d 205, 214–15 (4th Cir. 2011) (distinguishing between
them). The remaining defendants, the Wuhan Institute of Virology and Chinese
Academy of Sciences, are legally separate from the government, but still closely
enough connected that they qualify as “organ[s] of” it. 28 U.S.C. § 1603(b)(2)
(defining “agency or instrumentality of a foreign state” to include “an organ of a
foreign state or political subdivision thereof”). The complaint drives this point home
by alleging that they are under the “control” of the Communist Party and act as
“agents” of the Chinese government. See Gates v. Victor Fine Foods, 54 F.3d 1457,
1461 (9th Cir. 1995) (holding that an entity was an organ of the state, in part because
the entity’s “ability to act independently” was “narrowly circumscribe[d]”). All “for
the benefit of China.”

       To sum up, each of the defendants is a “foreign state” because it is part of
China’s official government, a “political subdivision,” or a governmental “agency
or instrumentality.” 28 U.S.C. § 1603. The Foreign Sovereign Immunities Act, in
other words, shields them from Missouri’s lawsuit unless a statutory exception
applies.

                                         -5-
                                         III.

      Most of the action in these types of cases involves the exceptions. If one
applies, “the foreign state shall be liable in the same manner and to the same extent
as a private individual under like circumstances.” 28 U.S.C. § 1606. If none do,
however, a federal court lacks both personal and subject-matter jurisdiction over the
foreign state. See Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 485 n.5
(1983). The ultimate burden rests with Missouri, the plaintiff, to “show[] that an
exception applies.” Cmty. Fin. Grp., Inc. v. Republic of Kenya, 663 F.3d 977, 980
(8th Cir. 2011) (citation omitted).

      Only two exceptions potentially cover the acts alleged in Missouri’s
complaint. One focuses on noncommercial torts. See 28 U.S.C. § 1605(a)(5);
Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 439–41 (1989)
(discussing this exception). The other deals with commercial activity. See 28 U.S.C.
§ 1605(a)(2); Saudi Arabia v. Nelson, 507 U.S. 349, 356–63 (1993) (discussing that
one). Between both exceptions, only one of Missouri’s claims survives.

                                         A.

       The noncommercial-tort exception does not save any of them. See 28 U.S.C.
§ 1605(a)(5). It denies immunity “for personal injury or death, or damage to or loss
of property, occurring in the United States and caused by the tortious act or omission
of [any] foreign state.” Id. Missouri’s argument is that the defendants breached their
duty of care by allowing COVID-19 to spread, blocking the dissemination of
information about the virus, and cornering the market on personal-protective
equipment.

       Even if we assume that all of these “act[s] or omission[s]” were tortious, see
id., Missouri has a bigger problem: the exception within the exception for torts
arising out of “discretionary function[s],” id. § 1605(a)(5)(A). The idea behind it is
to “prevent judicial ‘second-guessing’ of . . . decisions grounded in social,
                                         -6-
economic, and political policy.” United States v. Gaubert, 499 U.S. 315, 323 (1991)
(quoting United States v. Varig Airlines, 467 U.S. 797, 814 (1984)). It places
decisions “susceptible to policy analysis” outside the purview of American courts.
Croyle ex rel. Croyle v. United States, 908 F.3d 377, 381 (8th Cir. 2018) (quoting
Gaubert, 499 U.S. at 325).

       Whatever the wisdom of China’s policy decisions, they were discretionary.
Every single act or omission identified in Missouri’s complaint falls into this
category, from continuing to allow large gatherings in Wuhan to taking legal action
against doctors who tried to share information about the virus. None of these actions,
as far as we can tell from the complaint, were mandatory or forbidden in China,
meaning they were the subject of a “judgment or choice” by policymakers. Riley v.
United States, 486 F.3d 1030, 1032 (8th Cir. 2007) (quoting Berkovitz by Berkovitz
v. United States, 486 U.S. 531, 536 (1988)); cf. Tonelli v. United States, 60 F.3d 492,
496 (8th Cir. 1995) (holding that the post office’s failure to terminate an employee
despite notice of “illegal behavior . . . d[id] not represent a choice based on plausible
policy considerations”). Missouri may want to hold China accountable for its role
in the spread of COVID-19, but the Foreign Sovereign Immunities Act is clear that
it cannot do it this way. See 28 U.S.C. § 1604.

                                           B.

      For Missouri, there is one last hope: the commercial-activity exception. See
28 U.S.C. § 1605(a)(2). It abrogates immunity for claims based upon:

      [1] a commercial activity carried on in the United States by the foreign
      state; . . .
      [2] an act performed in the United States in connection with a
      commercial activity of the foreign state elsewhere; or . . .
      [3] 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.

                                          -7-
Id. None of the conduct identified in the complaint occurred within the United
States, so Missouri’s claims hinge on the third clause, which focuses on acts with a
“direct effect in the United States.” Id.; see 28 U.S.C. § 1603(d) (defining a
commercial activity as “either a regular course of commercial conduct or a particular
commercial transaction or act”).

                                         1.

       Three of Missouri’s claims target the alleged “malfeasance and deception”
behind the spread of COVID-19. The complaint attributes the harm Missouri
suffered to the virus research undertaken by the Wuhan Institute of Virology and
Chinese Academy of Sciences, the management of China’s healthcare system, and
“the operation of traditional and social[-]media platforms for commercial gain.” The
virus’s spread, at least according to the complaint, caused a “loss of jobs, loss of
income, [and] loss of business opportunities” in Missouri. Specifically, the
“restrict[ion] [of] millions of dollars in state expenditures,” widespread school
closures, and visitation restrictions in hospitals and nursing homes.

       The problem is that, even if these activities were commercial, their effects
were “remote and attenuated,” Weltover, 504 U.S. at 618, not “direct,” 28 U.S.C.
§ 1605(a)(2). To be direct, an effect must “follow[] as an immediate consequence
of the defendant[s’] activity.” Weltover, 504 U.S. at 618 (emphasis added) (citation
omitted); see Dumont v. Saskatchewan Gov’t Ins., 258 F.3d 880, 883 n.6 (8th Cir.
2001) (explaining that the provision of insurance to motorists in the United States
was sufficient to satisfy the exception).

        No direct causal chain exists here. See Terenkian v. Republic of Iraq, 694
F.3d 1122, 1133 (9th Cir. 2012) (explaining that “a consequence is immediate if no
intervening act breaks the chain of causation leading from the asserted wrongful act
to its impact in the United States” (citation omitted)). Start with the spread of the
virus itself, which required intervening actors. See id. At least one infected
individual (and probably more) had to travel from China to other parts of the world.
                                         -8-
The virus then had to spread and eventually reach the United States. Only at that
point could an infected individual have brought the virus to Missouri.

       It took several more steps from there for Missouri’s economy to suffer.
Infections had to reach a high enough level in the United States and Missouri for
federal, state, and local governments to issue stay-at-home orders. Missourians then
had to follow them. Only then did schools and businesses close, state expenditures
grind to a halt, and medical facilities close their doors to visitors. The point is that
it is impossible to directly trace the economic and other harms identified in
Missouri’s complaint to the virus research in Wuhan, operation of the Chinese
healthcare system, and social-media censorship. See United World Trade, Inc. v.
Mangyshlakneft Oil Prod. Ass’n, 33 F.3d 1232, 1238 (10th Cir. 1994) (holding there
was no jurisdiction when effects in the United States were “dependent on an
intervening factor”).

       The same was true in Virtual Countries, Inc. v. Republic of South Africa. 300
F.3d 230 (2d Cir. 2002). There, an internet-domain company sued South Africa over
a press release it issued announcing that it had acquired a domain name the company
owned. See id. at 234. News outlets reported on it, which caused investors to read
about it. See id. Then some investors pulled their money. See id. Even though the
press release impacted the company’s financial fortunes, the Second Circuit held that
the causal chain was too indirect because it required “numerous actions by third
parties.” Id. at 237. Just like the “tangled causal web” in Virtual Countries, most of
the acts identified in Missouri’s complaint “do[] not provide the requisite immediacy
to establish jurisdiction.” Id. at 238.

                                          2.

      The hoarding claim is different. It takes aim at the “production, purchasing,
and import and export of medical equipment, such as personal[-]protective
equipment (‘PPE’), used in COVID-19 efforts.” One allegation is that the
defendants hoarded masks and then sold lower-quality equipment in the United
                                          -9-
States. The other is that China “t[ook] over factories that ma[de] masks on behalf
of American companies,” which essentially halted the export of high-quality masks
to the United States. Together, they identify classic anticompetitive behavior, except
on a country-wide scale.

       The defendants’ anticompetitive actions were commercial in “nature.” 28
U.S.C. § 1603(b). Taking over mask-producing factories and buying up a substantial
portion of the world’s supply of personal-protective equipment are the actions of “a
private player” in the market. Weltover, 504 U.S. at 614. The same goes for the act
of selling those items for a profit. Id. The Supreme Court, for its part, has
distinguished between “regulations limiting foreign currency exchange,” on the one
hand, and “a contract to buy army boots or even bullets,” on the other. Id. Buying
and selling personal-protective equipment is much more like the latter, a
“commercial activity,” than the former, a “sovereign” one. Id. (quotation marks
omitted); see Brewer, 890 F.2d at 101. So is this kind of anticompetitive behavior.
Cf. Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co., 138 S. Ct. 1865, 1870
(2018) (discussing “a class-action suit against four Chinese corporations” accused
of “fix[ing] the price and quantity of vitamin C exported to the United States”).

       The closest call is whether the behavior had a “direct effect in the United
States.” 28 U.S.C. § 1605(a)(2). Recall that one of the specific allegations is that
China “bought up much of the rest of the world’s supply” of masks. Those supply
reductions allegedly led to an immediate shortage in Missouri, which then allowed
the defendants to enter the market and sell lower-quality masks. Cf. Minn-Chem,
Inc. v. Agrium, Inc., 683 F.3d 845, 859 (7th Cir. 2012) (en banc). Healthcare
providers in Missouri either paid higher prices for the masks they could find or dealt
with shortages that, in the complaint’s words, made it difficult to “safely and
effectively treat[] patients with the virus.” Although the underlying activity was
economic, the complaint suggests that Missouri suffered effects beyond just
financial loss. See Guirlando v. T.C. Ziraat Bankasi A.S., 602 F.3d 69, 79 (2d Cir.
2010) (citation omitted) (suggesting that a financial loss to a single American

                                        -10-
individual or firm is not enough, “standing alone,” to satisfy the commercial-activity
exception).

       China’s market power and its superior knowledge about the virus meant that
no one else other than the defendants had to act to create those effects. Cruise
Connections Charter Mgmt. 1, LP v. Att’y Gen., 600 F.3d 661, 664–66 (D.C. Cir.
2010); cf. Minn-Chem, 683 F.3d at 859 (interpreting a different statute and
concluding that “foreign supply restrictions, and the concomitant price increases
forced upon . . . purchasers, were a direct—that is, proximate—cause of . . .
subsequent price increases in the United States”). They singlehandedly “t[ook] over
factories that ma[d]e masks” and cornered the market before the rest of the world
realized what was happening. Then, when the virus spread and people all over the
world became sick, China was able to maintain its stockpile and prolong the
shortage. The most basic supply-and-demand principles tell us that these market
effects depended little, if at all, “on variables independent” of the defendants’
conduct given the information asymmetry and tight timeframe that existed at the
time. Guirlando, 602 F.3d at 75 (citation omitted); see also Ball Memorial Hosp.,
Inc. v. Mut. Hosp. Ins., Inc., 784 F.2d 1325, 1336 (7th Cir. 1986) (explaining that
the ability to “control output and prices” largely depends on the ability of other
market players “to increase their own output in response to a contraction by the
defendants”); cf. Herbert Hovenkamp, Federal Antitrust Policy 4 (6th ed. 2020)
(noting that “all participants in the market [must] have good knowledge about price,
output[,] and other information” for conditions to be most “conducive to
competition”). Other market players simply had no time or ability to respond. See
Ball Memorial Hosp., 784 F.2d at 1336.

       Nor do we, contrary to the dissent’s suggestion, measure the scope of the
effect by reference to what “Congress would have wanted” us to do. See post at 14.
The Supreme Court, after all, has instructed us to pay attention only to “what
Congress enacted”: a statute lacking a “‘substantiality’ or ‘foreseeability’”
requirement. Weltover, 504 U.S. at 618. Given this guidance, what we can say at

                                        -11-
this point is that Missouri has plausibly alleged that the defendants’ anticompetitive
behavior had “a direct effect in the United States.” 28 U.S.C. § 1605(a)(2).

       Finally, the commercial activity also has a “connection with,” 28 U.S.C.
§ 1605(a)(2), the “‘particular conduct’ that constitutes the ‘gravamen’ of the suit,”
OBB Personenverkehr AG v. Sachs, 577 U.S. 27, 35 (2015). That is, “those elements
of a claim that, if proven, would entitle [Missouri] to relief under [its] theory of the
case.” Nelson, 507 U.S. at 357. Missouri’s overarching theory is that China
leveraged the world’s ignorance about COVID-19. 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.2 See Fed. R. Civ. P. 12(h)(3); see also 28
U.S.C. § 1608(e) (“No judgment by default shall be entered by a court . . . unless the
claimant establishes his claim or right to relief by evidence satisfactory to the
court.”).

      2
        One of the amici suggests that Missouri lacks standing because it suffered no
injury. But even it acknowledges that standing could exist under two theories. One
is under the parens-patriae doctrine based on the harms Missourians suffered,
including the lack of “safe[] and effective[] treat[ment of] patients with the virus.”
See, e.g., Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez, 458 U.S. 592,
602–07 (1982) (collecting cases and recognizing that “a State has a quasi-sovereign
interest in the health and well-being—both physical and economic—of its residents
in general”); Lynch v. Nat’l Prescription Adm’rs, Inc., 787 F.3d 868, 872 (8th Cir.
2015) (explaining that the parens-patriae doctrine “permits the state to commence
an action to protect a public interest, like the safety, health[,] or welfare of its
citizens” (citation omitted)). The other is the “billions of dollars” Missouri lost in
revenue, a more direct economic injury. So, at least at this early stage, it has alleged
enough for standing.
                                         -12-
                                           IV.

      We grant Missouri’s motion to file a reply brief, reverse the judgment on
Missouri’s hoarding claim, otherwise affirm, and remand for further proceedings
consistent with this opinion.

SMITH, Chief Judge, concurring in part and dissenting in part.

       I concur in all but Part III.B.2 of the court’s opinion. I would affirm the district
court’s dismissal of the hoarding claim. I conclude that China’s behavior lacks “a
direct effect in the United States.” 28 U.S.C. § 1605(a)(2).

       In arguing for the applicability of the commercial-activity exception, Missouri
relies on the third clause of § 1605(a)(2), which confers jurisdiction “in any case . . .
in which the action is based . . . upon 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.” Under this clause, Missouri must show,
among other things, “that [the] act cause[d] a direct effect in the United States.” 28
U.S.C. § 1605(a)(2) (emphasis added). The Supreme Court has explained that “an
effect is direct if it follows as an immediate consequence of the defendant’s activity.”
Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 618 (1992) (emphases added)
(cleaned up). “The effect need not be ‘substantial’ nor ‘foreseeable,’ but it must not
be ‘purely trivial’ or ‘remote and attenuated.’” Valambhia v. United Republic of
Tanzania, 964 F.3d 1135, 1140 (D.C. Cir. 2020) (quoting Weltover, 504 U.S. at 618).
“A direct effect . . . is one which has no intervening element, but, rather, flows in a
straight line without deviation or interruption.” Princz v. Fed. Republic of Germany,
26 F.3d 1166, 1172 (D.C. Cir. 1994) (emphasis added) (internal quotation marks
omitted). “Congress did not intend to provide jurisdiction whenever the ripples
caused by an overseas transaction manage eventually to reach the shores of the
United States.” Virtual Countries, Inc. v. Republic of S. Afr., 300 F.3d 230, 236 (2d
Cir. 2002) (internal quotation marks omitted). “[T]he requisite immediacy is lacking
where the alleged effect depends crucially on variables independent of the conduct
                                           -13-
of the foreign state.” Guirlando v. T.C. Ziraat Bankasi A.S., 602 F.3d 69, 75 (2d Cir.
2010) (cleaned up).

       Moreover, “[t]he mere fact that a foreign state’s commercial activity outside
of the United States caused physical or financial injury to a United States citizen is
not itself sufficient to constitute a direct effect in the United States.” Id. at 78. If this
were not true “the commercial activity exception would in large part eviscerate the
FSIA’s provision of immunity for foreign states” “[i]f a loss to an American
individual and firm resulting from a foreign tort were sufficient standing alone to
satisfy the direct effect requirement.” Id. at 79 (emphasis omitted) (internal quotation
marks omitted).

       In determining whether China’s hoarding of PPE had a direct effect in the
United States, “the question . . . is, was the effect sufficiently direct and sufficiently
in the United States that Congress would have wanted an American court to hear the
case?” Guevara v. Republic of Peru, 608 F.3d 1297, 1309 (11th Cir. 2010)
(emphases added) (internal quotation marks omitted). Here, “[t]he ‘ripple effects’
that [Missouri] complain[s] of occurred ‘at the end of a long chain of causation.’”
Prime Int’l Trading, Ltd. v. BP P.L.C., 784 F. App’x 4, 9 (2d Cir. 2019)
(unpublished) (quoting Virtual Countries, Inc., 300 F.3d at 237). As the court
recognizes, “one of the specific allegations is that China ‘bought up much of the rest
of the world’s supply’ of masks. Those supply reductions led to an alleged shortage
in Missouri, which then allowed China to enter the market with its own lower-quality
masks.” Supra Part III.B.2. But “the effect of hoarding would have manifested only
over time with the spread of COVID and resulting consumption of and need for PPE
that became more urgent over time.” Missouri ex rel. Schmitt v. People’s Republic
of China, 610 F. Supp. 3d 1174, 1193 (E.D. Mo. 2022) (emphasis added).

       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.
It is certainly not strong enough to justify judicial intervention into an arena well
populated with substantial political and diplomatic concerns. As a result, I conclude
                                            -14-
that the direct-effect requirement is not satisfied and would affirm the district court’s
dismissal of the hoarding claim.
                         ______________________________

                                          -15-