New Developments in U.S. Covid Litigation Against China
November 25, 2025
Just last month, I wrote about suits filed in U.S. courts against the People’s Republic of China and other Chinese entities for damages arising from the Covid pandemic. In the last two weeks there have been two significant developments.
First, on November 14, 2025, the U.S. District Court for the Southern District of Mississippi (Judge Taylor B. McNeel) entered a default judgment against the PRC and other defendants for more than $25 billion. Five days later, on November 19, the state of Missouri announced that it was asking the State Department to serve the $24 billion default judgment that it secured in March, as the next step towards executing that judgment against the defendants.
Neither of these developments, however, changes the fundamental fact that will ultimately doom both Missouri’s and Mississippi’s efforts to collect. Under the Foreign Sovereign Immunities Act (FSIA), all of the defendants’ property in the United States is almost certainly immune from attachment and execution.
Covid Suits Against China
Since 2020, almost 30 Covid suits have been filed against China, the Chinese Communist Party, and other Chinese entities relating to the Covid pandemic. Many of these suits have been dismissed or have not yet managed to serve the defendants.
But in March 2025, Missouri won a default judgment for more than $24 billion against China and eight other Chinese defendants. The U.S. District Court for the Eastern District of Missouri (Judge Stephen N. Limbaugh, Jr.) concluded that the defendants hoarded personal protective equipment (PPE) during the early days of the pandemic in violation of federal and state antitrust laws.
Judge Limbaugh had originally dismissed all Missouri’s claims on the ground that all the defendants were immune from suit under the FSIA. But on appeal, a divided panel of the Eighth Circuit held that Missouri’s hoarding claim fit within the FSIA’s commercial activity exception. On remand, Missouri’s expert estimated that the state had lost or would lose more than $8 billion in tax revenues between 2020 and 2051. The district court trebled this amount (as provided in the federal and state antitrust laws) to get $24 billion plus in damages.
Serving Missouri’s Default Judgment
On November 19, Missouri’s Attorney General Catherine Hanaway announced that Missouri was asking the U.S. State Department to serve its default judgment through diplomatic channels on six of the nine defendants. In the case of a default judgment against a foreign state or its agencies or instrumentalities, § 1608(e) requires that the judgment be sent to the defendants through the same methods that are used for serving process. When the defendant is a foreign state or political subdivision, the methods listed in § 1608(a) must be used. If the first three are not available, as appears to be true here, the judgment may be sent by the State Department through diplomatic channels.
The Waiting Period
It is not clear why Missouri waited so long to send its judgment to the defendants. The attorney general’s announcement says: “Federal law requires states to wait a ‘reasonable period of time’ after a judgment is entered before initiating the service and enforcement process against a foreign government. With that waiting period now completed, Missouri can move forward with the next phase.” But this is not exactly right.
Section 1610(c), which addresses immunity from execution, states:
No attachment or execution … shall be permitted until the court has ordered such attachment and execution after having determined that a reasonable period of time has elapsed following the entry of judgment and the giving of any notice required under section 1608(e) of this chapter.
This provision does require Missouri to wait a “reasonable period of time,” but under § 1610(c) that time begins to run only after “the entry of judgment and the giving of any notice required under section 1608(e)” (emphasis added). In other words, the judgment must be sent before the waiting period begins, not after it ends. Once the judgment is sent through diplomatic channels, Missouri will still have to wait.
The Missing Defendants
It is also notable that Missouri is sending the judgment to only six of the nine defendants that were found liable: the People’s Republic of China; the National Health Commission; the Ministry of Emergency Management; the Ministry of Civil Affairs; the People’s Government of Hubei Province; and the People’s Government of Wuhan City. Absent from this list are the Chinese Communist Party, the Wuhan Institute of Virology, and the Chinese Academy of Sciences, which Judge Limbaugh also found liable.
It is possible that Missouri is not pursuing these defendants because of problems with the original service of process. Missouri served these three defendants not through diplomatic channels (as it did for the other six) but by email, which the district court ordered pursuant to Federal Rule of Civil Procedure 4(f)(3). When a defendant is not the foreign state or a political subdivision but rather an agency or instrumentality, § 1608(b) provides the means of service. Missouri seems to have relied on § 1608(b)(3)(C), which allows a court to order service “consistent with the law of the place where service is to be made.”
As I pointed out in an earlier post, there are significant problems with email service on these three defendants. To begin, the Eighth Circuit held that the Chinese Communist Party qualified as a “foreign state” under the FSIA, rather than an agency or instrumentality, which means that it must be served through the methods in § 1608(a) rather than § 1608(b). But Missouri made no attempt to cure this defect in service on remand.
The Wuhan Institute of Virology and Chinese Academy of Sciences are agencies or instrumentalities to whom § 1608(b) applies, but there are two other problems with serving these defendants by email. First, as Maggie Gardner and I have explained repeatedly, the Hague Service Convention prohibits service by email, at least when the receiving state has objected to service through “postal channels” as China has done. Second, § 1608(b)(3)(C) allows a court to order service only by a method “consistent with the law of the place where service is to be made.” Chinese law does not permit private parties to serve process by email.
By dropping its enforcement efforts against these three defendants, Missouri may be implicitly acknowledging that they were not properly served in the first place.
Immunity From Execution
Once the State Department has sent the default judgment to the remaining six defendants, and (as discussed above) a further “reasonable period of time” has elapsed, courts will be able to order attachment and execution. But the $24 billion question in this case is what assets are subject to attachment and execution. Missouri’s announcement states that certification by the district court “will allow the Attorney General’s Office to begin seizing Chinese-owned assets, including real property, financial interests, and other holdings tied to the defendants.”
“Tied to the defendants” is an important qualification. In fact, only property owned by the defendants is subject to execution. The Second Circuit held in Walters v. Industrial & Commercial Bank of China (2011) that plaintiffs could not use assets belonging to agencies or instrumentalities of China to satisfy a default judgment against China itself. Walters based its holding on the Supreme Court’s decision in in First National City Bank v. Banco Para El Comercio Exterior de Cuba (Bancec) (1983), which stands for the proposition that U.S. courts must generally respect the corporate separateness of foreign states and their agencies or instrumentalities. It follows a fortiori that Missouri cannot execute the judgment against property in the United States simply on the basis that it is “Chinese-owned.” The property must be owned by the defendants.
But under the FSIA, property owned by a foreign state or political subdivision, which describes each of the six defendants that Missouri is pursuing, is immune from execution and attachment unless one of the exceptions in § 1610(a) applies. Specifically, § 1610(a)(2) provides that “[t]he property in the United States of a foreign state … used for a commercial activity in the United States, shall not be immune … from execution, upon a judgment entered by a court of the United States or of a State … if … (2) the property is or was used for the commercial activity upon which the claim is based.”
In this case, the final requirement would appear to be the most difficult for Missouri to satisfy. The commercial activity on which Missouri’s claims were based was the hoarding of PPE. Thus, Missouri may execute its judgment against real property, financial interests, or other assets belonging to the defendants only if those assets were used to hoard PPE. I cannot imagine what assets would meet that requirement.
The Mississippi Judgment
The other significant, recent development in Covid litigation against China is the default judgment entered on November 14 in a suit brought by the state of Mississippi. Not to be outdone by Missouri’s $24 billion judgment, Judge McNeel entered judgment for more than $25 billion for violations of Mississippi’s antitrust act and consumer protection act against five defendants: the PRC, the Chinese Communist Party, the National Health Commission, the People’s Government of Wuhan, and the Wuhan Institute of Virology.
Mississippi originally sued the same nine defendants as Missouri. But Mississippi orally moved at the evidentiary hearing to dismiss China’s Ministry of Civil Affairs, Ministry of Emergency Management, and the People’s Government of Hubei Province from the suit. Mississippi later moved to dismiss the Chinese Academy of Sciences after it retained a lawyer, raising the possibility that Mississippi’s claims would be contested.
On the issue of immunity, the Mississippi judgment closely follows the Missouri one, finding that Mississippi’s claims of hoarding PPE are based on commercial activity and thus permissible under the FSIA’s commercial activity exception. As in the Missouri case, the judge found that the defendants’ conduct violated the state’s antitrust law. Unlike Missouri, Mississippi also brought claims under its consumer protection act, which the judge found to be violated.
Actual Damages
Mississippi claimed more than $12 billion in actual damages for violation of its antitrust and consumer protection acts, representing the economic value of the Covid-related deaths in Mississippi and the costs of lost employment. (Unlike Missouri, Mississippi did not claim damages for overpayment for PPE.) Judge McNeel, however, awarded damages only under Mississippi’s antitrust act and only for hoarding (not for misrepresentations leading up to the hoarding), resulting in an actual damages award of just over $4 billion.
Statutory Penalties
The court also awarded statutory penalties. Mississippi’s antitrust act authorizes a $500 penalty for each violation, and the state claimed that 4,150 of its 11,857 deaths were directly caused by China’s PPE hoarding, yielding $2 billion in antitrust penalties. Mississippi’s consumer protection act authorizes a $10,000 penalty for each violation, and the state claimed that China hoarded 20,836,254 items of PPE, including masks, gloves, and protective garments. But Judge McNeel thought the $10,000 penalty too high, and so awarded $1,000 for each violation, yielding more than $20 million in consumer protection penalties.
The court recognized “that a $1,000 per-violation penalty costs much more than any single glove, mask, or garment.” (One might add that $1,000 is also twice the penalty awarded under Mississippi’s antitrust act for each death.)
But the more fundamental problem is that the FSIA forbids such penalties against foreign states. Section 1606 provides that a “foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances; but a foreign state except for an agency or instrumentality thereof shall not be liable for punitive damages.” Of the five defendants against whom the court entered judgment, only the Wuhan Institute of Virology qualifies as an “agency or instrumentality” against which punitive damages may be imposed.
Permanent Injunction
Finally, Judge McNeel entered a permanent injunction against the defendants under Mississippi’s consumer protection act, enjoining them from violating the act “by hoarding PPE and misrepresenting or concealing the essential facts of a public health crisis that has a reasonable likelihood of affecting the availability of PPE in the United States and Mississippi.” Under Mississippi law, such an injunction requires a showing of “present or future illegal conduct that needs to be enjoined.” One might reasonably question whether these facts are likely to repeat themselves, particularly in light of the judge’s characterization of Covid in the first sentence of his judgment as a “once-in-a-lifetime pandemic.”
Immunity from Execution
Although the default judgement addresses liability and remedies, one line about enforceability caught my eye. On page 65, Judge McNeel writes, “if China does not pay, Mississippi alleges that it can collect through Chinese-owned assets—such as farmland and business holdings—located in the United States.” He is referring to allegations at the evidentiary hearing (pp. 50-55 of the transcript) that China owns $768.6 billion in U.S. treasury securities, that “Chinese investments in U.S. agricultural land are spread across the country,” and that China has either an “ownership interest in or ownership of a shell corporation that has ownership interest in” U.S. companies including “General Electric, Smithfield Foods, Syngenta, ByteDance, Riot Games, Morgan Stanley, Visa, and Blackstone.”
These allegations make concrete the problems discussed above that both Missouri and Mississippi will face when they attempt to collect, given that the FSIA makes the property of a foreign state immune from attachment and execution unless the property is used by the foreign state in the United States for the commercial activity on which the claim is based. (The rules are a bit looser for the Wuhan Institute of Virology, as an agency or instrumentality rather than part of the foreign state, as I discuss here.)
First, to be subject to execution, property must be owned by the foreign state defendants themselves. That there are “Chinese investments in U.S. agricultural land” is of no help unless that land is owned by the defendants. Second, indirect ownership of U.S. companies would also not be subject to execution. Under the Bancec case mentioned above, U.S. courts respect corporate separateness unless there are reasons to pierce the corporate veil. Third, the property must have been used for the commercial activity on which the claims were based—here, hoarding. It would be interesting to hear lawyers for Missouri and Mississippi explain how the defendants used U.S. treasury securities, farmland, and shares in U.S. companies to hoard PPE during the Covid pandemic.
Conclusion
It has taken Missouri and Mississippi five years from filing their lawsuits to the entry of default judgments. In the end, I wonder what it is all for.
Although Shakespeare never heard of Missouri and Mississippi, or Covid, or sovereign immunity, these lines from Macbeth kept coming to mind.
It is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.