China Law and Governance Review
    A Publication of China Law and Development Consultants
June 2004 Issue No. 2   
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Case Files
Notable Legal Cases

Luoyang City “Seed” Case Highlights Chinese Courts’ Lack of Authority to Declare Laws Invalid
In 2003, Li Huijuan (李惠娟), a female judge at the Luoyang Municipal Intermediate People’s Court in Henan Province (河南省洛阳市中级人民法院) nearly lost her job for declaring in a civil case that provisions of certain local regulations were invalid due to their conflict with a national law. The incident, which received wide media coverage in China and became the subject of much debate in legal circles, underscores the lack of a workable mechanism to resolve conflicts between national and local (lower-level) laws under the current legal and political system. The case in question involved a contract dispute over the delivery of corn seed between a seed propagator and a buyer. The issue facing the panel of judges hearing the case was whether they should, in calculating damages, apply market price for the corn seed in accordance with provisions of the PRC Seed Law (种子法) or follow the “government-set price range” (政府指导价) set forth under the local seed pricing regulations approved by the Henan Province People’s Congress (河南省人大), the local legislative body. Judge Li, who presided over the panel, rejected the pricing provisions of the local regulations on the ground that they conflicted with the national Seed Law. In so declaring, Judge Li and another judge who approved the language in her ruling, drew strong criticism from leaders of the Henan Province People’s Congress. They were accused of encroaching upon the legislative authority by engaging in illegal judicial review and therefore violating the law. The legislative body also demanded that the Luoyang court remove the judges from their posts. The local court initially heeded such demand by removing the judges but later, faced with mounting media outcry over the harshness of its decision, backed down and reinstated the judges. (Sources: 21st Century Economic Report 《21世纪经济报道》, November 17, 2003 and China Youth Daily《中国青年报》, February 6, 2004)

Judge Li defended her decision by citing Article 64 of China’s Law on Legislation (立法法), which provides that “where a national law or administrative regulation enacted by the state has come into force, any provision in the local decree which contravenes it shall be invalid”. (China Youth Daily, id.) However, the Henan Province People’s Congress and court officials both maintained and many experts agreed, that under China’s constitutional and legal framework, only the Standing Committee of the National People’s Congress (全国人民代表大会常务委员会) has the authority to adjudicate conflicts between local regulations and national laws. The appropriate way for courts to handle conflict of laws cases, according to a senior judge at the Luoyang court, is to suspend the adjudication process and report the conflict to the Supreme People’s Court, which shall then refer the matter to the Standing Committee for final adjudication. (21st Century Economic Report, id.) In reality, the Standing Committee, which convenes every two months for five to seven days each time, rarely fulfills its review function. According to Professor Jiang Ping (江平) of the China University of Politics and Law (中国政法大学), the Standing Committee had never revoked any conflicting local regulations; nor were there any detailed procedures in place for reviewing conflicting local laws. (21st Century Economic Report, id.) The reason that the national legislative body had not been flooded with requests from courts to review inconsistent local regulations, according to another legal scholar Cai Dingjian (蔡定剑), is that in practice, many courts simply apply the law with the higher legal authority while keeping silent on the reason of their rulings, thereby sidestepping the issue of improper judicial review. (Legal Daily《法制日报》, November 20, 2003)

A case in point was a lawsuit filed by a blind man at the Beijing Xicheng District People’s Court (北京市西城区人民法院) alleging that the Beijing subway authority had violated China’s Law on the Protection of Disabled Persons (残疾人保护法) by requiring him to pay subway fare. The subway authority defended its practice as being consistent with the regulations issued by the Beijing Municipal People’s Government (北京市人民政府) which permitted free rides only to those who could produce a disability certificate issued by the Beijing government agency in charge. The court ruled that the plaintiff, who was visiting Beijing at the time and did not possess the requisite disability certificate, was entitled to the free ride in accordance with the national law, but the defendant did not err in following the local regulations. The court admonished the defendant, however, that when dealing with disabled passengers from outside Beijing, it “should have handled the situation more appropriately from the perspective of strengthening the protection of the legal rights of the disabled and of giving those from outside Beijing the same privilege as those from Beijing”. (Qianlong.com 千龙网, January 3, 2004) An unnamed delegate to the National People’s Congress observed that had Judge Li taken the same approach as the Beijing court, instead of expressly citing conflict of laws as grounds for the court’s decision, her ruling would not have generated such controversy. This view was shared by many judges. (21st Century Economic Report, id.)

As more new laws and regulations are being promulgated in China by governments at all levels, the amount of conflict and inconsistencies between local and national legislation have also increased considerably, “causing confusion and new difficulties in the application of the laws”. (www.china.org.cn 中国网, February 5, 2004) As a result, more administrative adjudication suits (行政诉讼案) are being brought by citizens seeking to reverse government actions based on local regulations that conflict with national laws. However, under China’s Administrative Adjudication Law《行政诉讼法》 (1990) pursuant to which these suits were filed, judicial review is limited to “concrete administrative action” (具体行政行为) and does not reach “abstract administrative action” (抽象行政行为). Local regulations, which often dictate the government’s “concrete action”, generally fall under the category of “abstract administrative action”. In dealing with such conflict of laws issues, local courts generally either decline to consider the claims or quietly follow the national laws as the Beijing court did in the subway fare case, resulting in much uncertainty for litigants. In the last two years, the local courts in Guangdong Province (广东省) and Zhejiang Province (浙江省), citing lack of reviewing authority, refused to consider two height discrimination suits involving challenges to the provincial governments’ civil service hiring practices and policies. At the same time, the court in an Anhui (安徽省) Hepatitis B discrimination case entertained similar claims and substantively reviewed the validity of the local regulation in question. (See discussions in the “Main Feature” column of this issue). In 2003, a well-publicized case in Nanjing, Jiangsu Province (江苏省南京市) that sought to force a local government to amend its outdated rules was rejected by the local court, dashing the hope by many in China that the case would set a precedent for judicial review of local regulations. In that case, a company sued a district-level government in Nanjing for its failure to amend an outdated rule on compensation for forcible home demolition (拆迁补偿) that conflicted with newer and higher level regulations issued by the Nanjing municipal government. The court ruled that the “promulgation, revocation and amendment of the local government rule” in question were “abstract administrative action” not subject to judicial review. (Source: China Youth Daily, June 13, 2003)

The lack of review mechanism for conflicting or inconsistent local regulations has prompted calls for expanding the courts’ judicial review authority. As Professor Jiang Ming’an (姜明安) of Peking University Law School (北京大学法学院) pointed out: “Given that the Constitution has set forth the principle of judicial unity and that the Law on Legislation has stipulated the hierarchy of [our] laws, regulations and rules, when a court faces two conflicting laws on the same issue during the adjudication process, it should be allowed to choose the applicable law of the higher legal authority; it should not be required to submit the issue to higher levels of courts, to the point that it must wait for a final answer from the Standing Committee of the National People’s Congress.” (21st Century Economic Report, December 27, 2003) Others have proposed to amend the Administrative Adjudication Law to allow courts to review local regulations and to grant the Supreme People’s Court (最高人民法院) the final adjudication authority with respect to the validity of local regulations and the related conflict of laws issues. (See Zhang Xiaoling (张小玲), “Constitutional Considerations Regarding the Li Huijuan Incident” “对李慧娟事件的宪法思考”, http://www.law-lib.com, November 22, 2003 and Han Zhe (韩哲), “Establishing a Sound Adjudication Mechanism for Conflicts of Law” “建立法律冲突的良性解决机制”, 21st Century Economic Report, November 24, 2003) Whether such changes could be effected any time soon will depend on the pace of China’s political reform and whether some element of checks and balances will be introduced into the current political and legal structure. Even if the Chinese judiciary were granted the power to review local regulations, it would be hard to expect local judges, who are usually appointed and paid by local governments, not to side with local interests when faced with conflict between local and national laws.

 

Case Files: Priceless Grapes
It started out as a petty theft. In August 2003, four migrant workers were caught stealing 25 kilograms of grapes after helping themselves to generous portions of the exceptionally tasty morsels from a fenced-in garden in Beijing. Little did they know that the grapes were part of a nearly completed ten-year RMB400,000 (US$50,000) research project at the Beijing Academy of Agriculture and Forestry (北京农林科学院). Determining the value of the stolen grapes and what crime, if any, the migrant workers had committed turned out to be quite a challenge for both the police and the prosecutors. Under provisions of China’s criminal law, the threshold for criminal theft charges in cities such as Beijing is RMB1,000 (US$125) with a maximum of three-year sentence; if the amount of the theft exceeds RMB10,000 (US$1,250), the jail term maybe as long as ten years. The researchers claimed that the theft had destroyed the chain of their research, causing irrevocable damage on the eve of the grapes being certified for commercial production. However, because their work was still at the research stage, the grapes did not have any readily available market value. After consulting with legal experts and obtaining an official valuation from the Beijing Pricing Bureau (北京物价局), the police determined that the direct economic loss incurred by the grape theft was RMB11,220 (US$1,402.5), representing the loss of researchers’ time and labor, cultivation expenses and the loss of the integrity of an entire year’s research as a result of some of the grapes being consumed. Based on this price tag, the Beijing Haidian District People’s Procuratorate (北京市海淀区检察院) formally charged three of the four migrant workers with criminal theft in September 2003, earning the case the nickname, the “Case of the Priceless Grapes” (天价葡萄案). In January 2004, it was revealed that the prosecutors, still unsatisfied with the valuation provided by the police, ordered further investigations into the matter.

From the outset, legal experts, including those consulted by the police and the prosecutors, questioned whether the migrant workers’ minor transgression without knowing the value of the grapes would amount to criminal theft in the first place. According to one expert, whether or not a court would accept the valuation submitted by the prosecutors would determine whether the charges could stand against the migrant workers and the amount of sentencing they would receive if convicted. Until then, the migrant workers already paid dearly for their fancy taste: they have been under arrest since August 2003 and under the PRC criminal law, in cases involving complex evidentiary issues, criminal suspects can be held for up to 14 months before trial. (Sources: Beijing Youth Daily 《北京青年报》, August 22, 2003 and January 15, 2004)

The New Beijing Daily《新京报》 reported on May 28, 2004 that, after further investigations, the police reset the value of grapes at several hundred yuan and the three migrant workers would soon be released on bail and the case against them will likely be dropped.



 

 


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