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Law360 (April 9, 2020, 7:51 PM EDT) -- Two California real estate companies and some small business groups have filed a proposed federal class action against China on behalf of all American small businesses, seeking at least $8 trillion for what they say is the Chinese government's culpability in the COVID-19 pandemic.
The leaders of the People's Republic of China and other government entities, such as the National Health Commission and the government of the city of Wuhan, are named as defendants in the suit filed on Wednesday by lead plaintiff Cardiff Prestige Property Inc. of Fountain Valley, California.
The plaintiffs claim, on behalf of the estimated 32 million small businesses in the United States, that the Chinese government engaged in a misinformation campaign during the early stages of the COVID-19 outbreak, and also suggested that a bio-weapons lab in the city of Wuhan could be the source of the virus, although no evidence for the allegation is presented in the lawsuit.
The Chinese government's "failure to be transparent with the public, and failure to confront the COVID-19 crisis by ordering a quarantine for almost two months, was central to a pandemic occurring because the infection spread in an exponential manner," the plaintiffs said. "According to scientists almost 99% of the world's infections could have been avoided if the defendants had acted properly in early December 2019."
The lawsuit goes through a detailed timeline, listing what it claims were key missteps or misstatements by the Chinese government between the time the virus first appeared in Wuhan patients in November and March 22, when the Chinese government declared the virus was under control despite evidence the illness was still widespread in the country. The sources of the information in the lawsuit are often not included but appear to be cobbled from media reports.
One of many incidents alleged in the lawsuit, the plaintiffs say that, on Jan. 1, eight doctors who had been publicly discussing the new virus were detained and questioned by the police and condemned for making false statements. Another alleged incident occurred on Jan. 20, when Wuhan Mayor Zhou Xianwang purportedly "admitted" that Beijing's rules kept him from fully disclosing information about COVID-19.
The Chinese government "engaged in a campaign of falsehoods, misinformation, cover-up and destruction of evidence," according to the lawsuit.
The plaintiffs include First Premier X LLC in Fountain Valley, the Little Saigon Chamber of Commerce in Fountain Valley and the Vietnamese American Culture and Education Foundation. The lawsuit was filed by attorney Hoang Huy Tu, whose office is in Fountain Valley and also appears to be chairman of the Little Saigon Chamber of Commerce and the Vietnamese American Culture and Education Foundation.
The lawsuit's counts include negligence, public nuisance and strict liability for conducting ultrahazardous activity. The last count includes the claim that a bio-weapons lab located in Wuhan could be the source of the virus.
The director of the Wuhan Institute of Virology has denied that the novel coronavirus came from her lab.
"The novel 2019 coronavirus is nature punishing the human race for keeping uncivilized living habits. I, Shi Zhengli, swear on my life that it has nothing to do with our laboratory," she wrote on a Chinese social messaging app in early February, according to Caixin Global, a Beijing-based media company. "I advise those who believe and spread rumors from harmful media sources … to shut their stinking mouths."
The lawsuit is seeking at least $8 trillion in compensatory damages plus punitive damages. It was filed on the same day that a proposed class of doctors, nurses, paramedics, EMTs and other front-line medical care workers sued the Chinese government in Florida federal court, alleging China was hording personal protective equipment for health care workers.
The plaintiffs are represented by Hoang Tu of The Tu Firm.
Counsel for the People's Republic of China and other defendants could not immediately be identified.
The case is Cardiff Prestige Property Inc. et al. v. People's Republic of China et al., case number 8:20-cv-00683, in the U.S. District Court for the Central District of California.
--Editing by Nicole Bleier.
Correction: An earlier version of this story misspelled the name of the plaintiffs' attorney. The error has been corrected.
For a reprint of this article, please contact reprints@law360.com.
