US firms launch legal action seeking billions of dollars in damages from China over coronavirus

A class action lawsuit was launched in Las Vegas

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The Las Vegas Strip has gone dark due to coronavirus  Credit: Getty

American small businesses are suing the Chinese government for billions of dollars in damages over the coronavirus.

The case has been brought on behalf of five companies in Las Vegas - two property firms, a restaurant, a florist, and a medical training outlet - but seeks compensation for all 32 million US businesses with less than 500 employees.

It was filed by Las Vegas lawyer Robert Eglet, who previously represented 2,500 people in reaching an $800 million settlement with MGM Resorts International, owner of the Mandalay Bay hotel, over the deadliest mass shooting in modern American history.

In 2017 a gunman firing from the Mandalay Bay killed 58 people and injured more than 850.

Mr Eglet claimed China was reckless and negligent, and that it intimidated doctors, scientists, journalists and lawyers while allowing the virus to spread. Its authorities were “liable for conducting ultra-hazardous activity," he said.

The lawyer said: "They engaged in falsehoods, misinformation, cover-ups and destruction of evidence. If they had been transparent with the world this could have been stopped in Wuhan."

His case focuses on the economic damage to US small businesses, rather than large corporations.

It is based on the US Foreign Sovereign Immunity Act of 1976, and US laws covering "acts outside the territory of the US that have a direct effect on the United States."

The case was filed in the US District Court in Nevada. Among those named as defendants were the People’s Republic of China, the country's National Health Commission and Ministry of Civil Affairs, the province of Hubei, and the city of Wuhan.

It was not immediately clear whether the legal action had been served on Chinese officials.

The Chinese Embassy in the US did not immediately respond to requests for comment.

In Nevada 278 people have tested positive for the virus and four have died, all of the fatalities in Las Vegas.

Mr Eglet said: "This lawsuit is not directed at the people of China. No one is blaming the people of China and no one is blaming Chinese-Americans.

"They are as much a victim of the Chinese government’s actions, and inactions, as the rest of the world."