Paul Hastings Beats Claim It Acted as Unregistered Chinese Agent

Paul Hastings LLP won a court order sanctioning a group of Chinese nationals living in the US who accused the law firm of operating as an unregistered foreign agent for the People’s Republic of China.

The US District Court for the Southern District of New York called the Foreign Agents Registration Act claim “frivolous” and “patently untenable” for its failure to allege injury connected to actions by Paul Hastings or its co-defendant, firm partner Luc Despins.

The court dismissed the action Wednesday, saying it was brought in concert with a harassment campaign orchestrated to defend self-proclaimed billionaire-in-exile Ho Wan Kwok. Kwok mobilized online supporters to harass Despins and his family after he was appointed as the Chapter 11 trustee of Kwok’s controlled entities during the billionaire’s bankruptcy proceedings in Connecticut.

Kwok is not a party, but Judge Valerie E. Caproni said he is “at the center of this lawsuit.”

“Plaintiffs’ counsel has a pattern of bringing meritless FARA claims against Mr. Kwok’s adversaries—conduct that he has praised,” Caproni said. “The copy-and-paste nature of these numerous lawsuits is evident from the fact that Plaintiffs’ complaint contains an out-of-place paragraph that alleges ‘Defendant Bo Shan is also working as a spy for the CCP.’”

The Connecticut bankruptcy court dismissed conflict-of-interest allegations against Despins and Paul Hastings last year, and enjoined the plaintiffs from making baseless claims that defendants were agents of the Chinese Communist Party.

Caproni awarded Paul Hastings and Despins attorneys’ fees in light of “Plaintiffs’ counsel’s complete disregard for the merits of Plaintiffs’ claims, his gamesmanship, and both Plaintiffs’ and Plaintiffs’ counsel’s defiance of the Bankruptcy Court’s injunction.”

Richard N. Freeth of New York, who represents the plaintiffs, didn’t immediately return an emailed request for comment.

Davis Polk & Wardwell LLP represents Despins and Paul Hastings.

The case is An v. Despins, S.D.N.Y., No. 22-cv-10062, 8/2/23.