JACKSON, Miss. — A recent default notice in Mississippi’s ongoing lawsuit against the People’s Republic of China could lead to significant financial repercussions for the foreign nation. The outcome now rests with a federal judge, who will decide whether China owes the state compensation related to the damages incurred during the COVID-19 pandemic.
Attorney General Lynn Fitch’s office awaits a decision from District Judge Taylor B. Neel, after Fitch initiated the lawsuit targeting China’s government and the Communist Party, accusing them of harmful actions that resulted in death, health-related injuries, and severe economic losses stemming from the pandemic. The lawsuit was filed amid accusations that China engaged in both a cover-up and a misleading public relations campaign regarding the virus.
Fitch contends that China’s actions included hoarding personal protective equipment (PPE) while also taking over American factories that produced essential supplies. This resulted in the sale of substandard PPE to Mississippi at exorbitant prices, all while illness rates in the state—and globally—soared. The attorney general stated that these actions were taken at a time when residents faced unprecedented health risks.
The virus claimed the lives of more than 13,000 individuals in Mississippi, as reported by USAFacts.org. During this same period, Fitch claims that China profited approximately $6.2 trillion from PPE sales in 2020, the first year of the pandemic in the United States. She noted that China’s stockpiling of medical supplies caused the prices of critical items, such as N95 and KN95 masks, to rise dramatically, forcing the Mississippi Emergency Management Agency to seek alternative vendors for weeks.
As of May 20, 2020, MEMA reported expenditures exceeding $20 million on COVID-19-related efforts. Additionally, the economic fallout from the pandemic contributed to over 203,000 jobless claims in Mississippi between mid-March and late April 2020. The defendants involved in the case have not provided any defense or explanation for their actions.
The U.S. District Court issued a default notice in March 2024 after China failed to respond to the lawsuit for an extended period. Fitch filed for a default judgment in October, and a hearing regarding the case took place earlier this year. She argues that the suit is permitted under the Foreign Sovereign Immunities Act and state antitrust laws.
According to Fitch, China could potentially face liabilities exceeding $200 billion due to violations of Mississippi’s antitrust regulations and the Mississippi Consumer Protection Act. This law prohibits deceptive trade practices affecting commerce and could hold China accountable for accumulating more than 20 million PPE items, with each item constituting a separate violation subject to penalties up to $10,000.
The road to securing financial recovery for Mississippi remains uncertain, particularly regarding how the state would collect any awarded damages. In a related context, reports emerged in March that Missouri’s Attorney General’s Office is evaluating the possibility of seizing approximately $24.5 billion in Chinese assets to address similar COVID-19 damages.
While it is unclear how many assets China possesses in Mississippi, a December 2023 report highlighted that foreign entities owned more than 700,000 acres of farmland in the state as of 2021, with only 88 acres attributed to Chinese ownership.
Fitch was unavailable for comment due to travel commitments.
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