One Night In China And The World's Your Oyster

« Online China Explained | | China: Corrupt Me. Corrupt Me Not. »

Posted by Dan on September 24, 2007 at 09:44 AM

Discussion: Comments (28) : TrackBacks (7) : Linking Blogs : Add to del.icio.us

China Hearsay has a great post entitled, "Product Liability and Exports: please make it stop." The post takes issue with an op-ed article by an American lawyer on what China must do in the legal arena to solve its product safety problems. I was troubled by what China Hearsay was relaying of this lawyer's article, but I got a downright sinking feeling when I followed the link to it and saw it was going to my hometown Seattle newspaper. Turns out the article was written by one of Seattle's best known and most respected plaintiff's personal injury lawyers, William Marler. Mr. Marler is one of the foremost experts on U.S. food safety laws but he really has no business writing about China.

Marler's article is entitled "China Needs a Few Good Lawyers," falsely implying China right now has less than a few. Since much of my trip this time has consisted of meeting with excellent Chinese lawyers in various Chinese cities (if it is Tuesday, it must be Qingdao), regarding pending litigation, I found this title both ridiculous and hugely condescending.

The article starts out approvingly referring to a recent article written by another Seattle lawyer, Chi-Dooh Li, the underlying thesis of which seemed to be that we Americans will never be able to trust China because it is not a Christian nation. Marler takes a more secular (and only slightly less ridiculous) approach, asserting Chinese products cannot be trusted until China has a body of civil law.

China has a comprehensive body of civil law that includes very clear standards for negligence actions, including product liability suits. There are certainly those who argue the damage awards in such actions should be higher and judicial corruption lower, but those issues are separate and apart from whether there is a system at all. There were nearly one million civil lawsuits filed in China last year and that number is on the rise and my firm typically has one or two such lawsuits pending in China at any given time. China has a civil law system.

Marler than launches into the standard "I spent a week in China and let me tell you what I saw as I am now a China expert" shtick. To his credit, he manages not to miss a single cliché:

Nothing could have prepared me for what I saw. My car was virtually frozen in traffic, leaving ample time to gawk at the rising skyscrapers, stretching as far as the smoke-filled air allowed me to see. My hotel was a gaudy parody of a Las Vegas casino. Yet, just a block away was a hootong, one of the bleak, yet clean and serviceable residential communities carefully fenced off from prying tourist eyes.

Assuming Marler's use of the word "hootong" was intended to mean "hutong" and not Hooters (which did just open up shop in Beijing), I cannot help but sense his surprise that some Chinese are clean. Just for the record, I would more likely describe Beijing's hutongs as "lively" than "bleak" and certainly not all of them are clean.

One more tried and true cliché and then I will get to the substance:

Nothing, it seems, is left of the Maoist society I studied in college 30 years ago, a point driven home when I strolled past a Porsche dealership a few blocks away from Mao's tomb facing the Forbidden City.

You mean to tell me the Chinese buy cars!

Marler then wrongly claims the Chinese government responded to its food safety problems by "executing its top food-safety official" when that execution was actually for having taken around $1 million in bribes. Marler then explains his reason for being in China was "to suggest some less drastic solutions."

Marler then falsely equates China's food safety problems with past incidents in the United States. According to Marler, "China is merely joining the club":

Corporate America has been killing Americans -- and their pets -- for generations. Where was the conscience of Jack in the Box over a decade ago when it chose to undercook its hamburgers and sickened hundreds with E. coli? Where was Con Agra's moral compass in 2002 when it sickened dozens more by distributing tainted ground beef? Did Odwalla lose sleep over the death of a 2-year-old in 1996? Last year, hundreds were sickened, five died and dozens were left with lifelong kidney problems after eating contaminated spinach. And, guess what? The Chinese had nothing to do with any of this.

This analysis ignores the difference between Chinese companies knowingly producing fake and inadequate baby formula, knowingly putting poison into toothpaste and knowingly using lead paint and American companies unintentionally allowing their foods to become contaminated. Surely the solution for intentionally tainted goods ought to differ from that for inadvertently tainted goods. Seems to me one sort of action calls for criminal prosecution and the other for civil liability.

Marler then tells us of the wise teachings he gave China and of the way the natives imbibed of his great wisdom:

Killing regulators will not make food any safer, I told the mostly Chinese audience. Tougher laws and inspections may help, but not by themselves. If consumers are injured by a product, the consequences must fall on those who made it. And, for that, Americans rely on a body of civil law.
The Chinese were clearly puzzled by this. They understand the power of government, and the concept of criminal law. But they do not understand how one person can stand up to a rich corporation and say: "You made my child sick, and you are going to have to make it right."

Seeing their puzzlement, Marler then "explained how our civil laws work:"

A Chinese company manufactures a product, or a component part of anything from dog food to automobiles or toy parts, and sends if off to Wal-Mart. The product proves to be tainted or faulty. A consumer is injured, and files suit against Wal-Mart, demanding compensation. A court awards damages, and Wal-Mart looks to the Chinese manufacturer, and demands accountability. Their message: China can make things cheaper, but they have to be safe. Lawsuits may make products more expensive, and both American and Chinese firms risk losing business.

Marler continued spewing forth his pearls of wisdom to a clearly enthralled audience:

So, I told the Chinese, the issue is not social justice or morality. The issue is something they can understand much more easily -- the bottom line. I could see heads nodding across the room. Ohhhhh, so it is ultimately about making the sale or not making the sale! This they understood.

Marler's brief sojourn in China has imbued him with an almost supernatural knowledge of Chinese law and culture such that he can state that "it is difficult to imagine China developing a body of civil law. It does not seem to mix well with an authoritarian society. Their impulse remains: 'Kill the regulator.'" I am not going to say no Chinese lawyer thinks this way, but not a single Chinese lawyer I know does. Not one.

The good news though, according to Marler, is that the Chinese can learn and "when it comes to exports, China is learning that its manufacturers are indirectly accountable to our system of civil justice. Once they understand that, they will have to play by the rules. Not because they are moral or immoral. But because they are motivated by the same raw, rational impulse as our corporations. They want to make money. And they will make more if they are not harassed by a bunch of lawyers representing sick kids."

If the U.S. product liability system is so great (and I actually think it is), how does Marler explain why American manufacturers and importers have allowed so much unsafe product into the United States when they are know lawyers like Marler lie in wait to sue them within an inch of their lives? And how are Chinese companies even "indirectly accountable to our systems of civil justice" when Chinese courts do not enforce U.S. judgments?

China Hearsay, written by an attorney who has spent nearly ten years practicing law in China also takes strong issue with Marler's noblesse oblige:

I completely agree with the conclusion that an effective, muscular product liability/tort system in the PRC would ultimately lead to better QC. However, I gotta say that the whole China-has-no-legal-system argument is really getting old and making me cranky.
Granted, this is not a China guy, so I can’t really criticize too much. However, the following line bugs me:

"Perhaps all China needs is a few good lawyers, and a body of civil law."

This is a good one too:

"If consumers are injured by a product, the consequences must fall on those who made it. And, for that, Americans rely on a body of civil law. The Chinese were clearly puzzled by this."

China Hearsay begs for a stop to this sort of thing and chastises Marler for getting the facts wrong:

Can we stop with this kind of thing? I usually hear it in an IP context when clueless commentators state that China has no IP laws. Now we have the strange notion that China’s civil law somehow doesn’t cover product liability? Perhaps the author was just trying to say that the legal practice in this area needs to be more developed - agreed. But these kinds of blanket statements, which are also quite condescending, do not help. China does have product liability laws, people who suffer damages from products can and do sue manufacturers, and courts often find in their favor.
Now, damage awards may be too low, the lack of a system of discovery means that information/evidence is hard to come by, and certainly the writer of this article would not be happy with a legal system that does not include juries. But let’s get the basic facts right, huh?

Yes, let's.

UPDATE: China Hearsay does a nice update on all of this in a new post entitled, the "Genesis of Rage." Best parts as follows:

[W]hen someone who obviously doesn’t know something puts himself forward as some sort of expert - that’s pretty damn annoying. Throw in a few statements that have racist overtones and, well, you can see where even the most mild-mannered folks out there will snap.
I don’t expect some tort lawyer in Seattle to be an expert on Chinese law. However, would it hurt him to talk to at least one expert before spouting off on unfamiliar topics?

See other posts in: Legal News

Comments

Loud and clear; say it again!

Posted by: Brad Luo | September 25, 2007 10:06 AM

Brad,

Again.

I really liked your comment over at China Hearsay, so I will repeat it here:

"I share your sentiment about this “China has no law…” argument floating out there.

yes, the body of tort law in China may not be as sophisicated (”scary” at times too) in the U.S.

yes, the damages awarded are too low, and punitive damages are hard to come by for plaintiffs.

yes, the courts are not independent.

But, none of them, singularly or combined, means that China has no “body of civil law” or no “good lawyers.” It is downright inaccurate and misleading, to say the least.

Thanks for setting the record straight."

I will note for the record that Brad is in his third year of law school here in the United States, after having secured a law degree in China. I'm guessing Brad knows more than "a few good lawyers" in China.

Posted by: Chna Law Blog | September 25, 2007 10:31 AM

Dan,

Thanks. Just Thanks.

Posted by: JeromeT | September 25, 2007 4:17 PM

Well Dan, sometimes a little muckraker sensationalism is good. It will stoke emotions and people will react, they will demand action from lawmakers to increase and empower regulators and look for companies to sue. This witch hunt will force companies in the US, even those that outsource from China or elsewhere, to shape up or be crushed. These companies in turn will shape up their operations in the US and abroad, and the abroad operations will teach those manufacturers how to do things right. Hopefully as the consumers of those countries hear about the witch hunt in the US and the results, they will loudly demand similar protections and enforced rights.

Posted by: nanheyangrouchuan | September 25, 2007 8:56 PM

Oh, dear God, no!

Here I was thinking for one foolish moment that the White Man's Burden died with Rudyard Kipling.

Hell, I'm not a lawyer, never studied law, and even I can pick holes in that clown Marler's diatribe big enough to drive a truck through.

Well done Dan and China Hearsay.

Posted by: chriswaugh_bj | September 25, 2007 10:42 PM

Great post. For more in the way of "I've been to China for a couple of weeks, so now I'd like to let you all know my expert opinion on the subject" see Will Hutton...

Posted by: Duncan | September 26, 2007 1:58 AM

Well said.

Posted by: Ben Kostrzewa | September 26, 2007 8:14 AM

JeromeT --

You are very welcome.

Posted by: China Law Blog | September 26, 2007 8:22 AM

nh --

I don't disagree that all this publicity is leading to increased safety, but are you saying something beyond that. I actually was recently quoted on this in this National Post article here: http://www.canada.com/nationalpost/financialpost/printedition/story.html?id=2be71b3e-2268-4c8b-8fe6-8798861386f0

Posted by: China Law Blog | September 26, 2007 8:25 AM

ChrisWaugh,

Certainly the Chinese no longer need us as they are able to keep their hutongs clean. Funny thing is that I met with someone today who thinks Marler did actually mean to say Hooters. This guy's argument is that Hooters is clean and bleak, whereas the hutongs are generally neither bleak nor terribly clean.

Posted by: China Law Blog | September 26, 2007 8:27 AM

Duncan --

Have not read much Hutton and what I have read I cannot really remember. Isn't he of the China will fall apart someday crowd?

Posted by: China Law Blog | September 26, 2007 8:28 AM

Ben Kostrzewa --

Why thank you Ben. This means a lot to me, coming as it does from a China lawyer/world class foosball player at Paul Weiss Rifkind, which has been in China as long as anyone.

Posted by: China Law Blog | September 26, 2007 8:30 AM

Dan,

While Duncan's point about visiting foreigners to China and their views is often accurate whether good or bad, the same can be said for those that have been there too long. Chinese in the US that I've talked too speak of how western people in Asian countries become warped and twisted (along with their views) when they are there too long and don't have a separation between themselves and the local culture around them.

So when an "old hand" states his case (as old hands are generally male...and old), this opinion has been soaking in CCTV, China Daily and local newsletters put out by the neighborhood committee regarding "glorious futures" and "green grass and blue skies".
And typically the hard case old hands had to make themselves "pro China" because they did something back home that made sure they can't go to home or to a country with alot of extradition treaties (corporate fraud, large scale tax evasion, espionage, sex crimes, etc).

And many hutongs aren't clean.

Posted by: nanheyangrouchuan | September 26, 2007 12:11 PM

nh --

I agree with you that we must listen to more than just "old hands." I am perptually in awe of DeToqueville's ability to see the US better than we ourselves could, and in such a short time.

But, what you say does not apply to what Marler did here, which is to make very strong (even insulting) pronouncments of an entire legal system and its lawyers within that system without any basis in either study or experience. That is not observation, it's unfairness.

Posted by: China Law Blog | September 26, 2007 6:32 PM

I agree with Dan that the author's comments are a bit condescending in places. However, I think that a person has a right to express a point of view and to have his viewpoint challenged.

Here, I'm not clear who exactly is "a friend of China"?

In my view, perhaps the most injurious action that someone can take against a person is to tell that person exactly what he/she wants to hear. As such, "a friend of China" may not be "a friend of China", depending upon how one defines that term.

There is a considerable debate within the Chinese legal community regarding ethics in the Chinese legal profession, Chinese legal education, and the future development of the Chinese legal profession. There is a very high attrition rate among Chinese lawyers. I consider persons who honestly participate in this debate to be "friends of China".

Thank you.

Posted by: Steven Blayney | September 26, 2007 8:59 PM

Steven Blayney --

1. Of course a person has a right to express his view and have that view challenged.

2. Why are we talking about "friend of China?" I have never (until now) even considered whether or not I am a "friend of China" and now that I have, I would say I am not. I am neither a friend nor an enemy; I am a neutral who just tries to call it like he sees it. But, I would agree with you that a friend should not remain silent.

During this trip, I was introduced to an American in Beijing who heads up a very powerful industry group. He told me he thought this blog was "hugely important." I laughed because I did not take it seriously. He pressed on and said that there are essentially two major camps out there. The "we hate China camp" and the "wooly, we love everything about China camp." He said that he put himself and this blog in a third camp, which is that China is made up of individuals who, for the most part, want the same sorts of things Americans want: a nice house, job security, a car, a 60 inch plasma TV (whoops, I'm getting too personal here), etc.... I liked that description.

Chinese lawyer ethics are nowhere near where they should be (I have written on this many times) and the courts are also nowhere near where they should be, particularly in criminal and politically relevant cases. I am not aware of high attrition among Chinese lawyers, but it would not surprise me in the least as there is high attrition among American lawyers and there are a huge number of Chinese lawyers who make almost no money. But so what?

What we are talking about here is someone who appears never to have studied Chinese law or handled a legal matter in China telling the Chinese what they need to do with their legal system and getting the facts all wrong in the process. Do you really think Chinese lawyers will be receptive to this?

I showed this article to two different Chinese lawyer friends with whom I have had countless discussions and arguments regarding legal matters and their response to the article was exactly the same. They asked why did this person write this article. They were convinced he had to have had some economic motive to have strayed so far from the truth. There have been countless critical discussions on Chinese law on this blog and there will be countless many more, but I hope it will be among those who strive to get the facts right.

But to say there are no good lawyers in China and to say it has no legal system and no product liability laws is to lose all credibility. I had dinner last night with the head of our Shanghai affiliated firm, Xian Jun, and we talked about the pros and cons of bringing personal injury lawsuits in China and the only con (which is so huge as to make such lawsuits not feasible for Western lawyers) i the low damages. This law firm recently filed a class action law suit against China's state owned tobacco company, accusing it of misrepresentation by making it seem as though cigarettes are not bad for one's health. I mention this to show that product law suits are being brought every day in China.

Posted by: China Law Blog | September 26, 2007 9:20 PM

Dan,

I agree with you completely.

The only reason that I mentioned the "friend of China" issue is that I sometimes get scared when China-related discussions become framed as us-versus-them.

I have the greatest respect for the Chinese people, but this respect includes Chinese people in Hong Kong, Taiwan, the US, Malaysia, etc., etc., as well as in China. And it also includes Chinese people who lived long ago, i.e., the ancestors. It would be rude of me not to consider their wishes as well, such as Confucius, Lao Ze, Sun Yat-Sen, etc, etc. since they, in effect, are China. Seriously.... There's a lot of diversity among the Chinese, so why should I favor one group of Chinese over another? Why should I favor Earth over Heaven?

Fortunately, your blog does NOT frame the China-discussion in a Manichean fashion.

Thank you.

Posted by: Steven Blayney | September 26, 2007 10:58 PM

Marler's "clean" is pretty much in the same league as nh's "wonton" comment.

It's a reflection of their animosity towards China.

Posted by: Charles Liu | September 27, 2007 12:31 AM

Steven Blayney --

Understood.

Posted by: China Law Blog | September 27, 2007 1:54 AM

Charles Liu --

No evidence Marler has any animosity towards China, unless ignorance plus patronization equals animosity. Does it? I do not think it does.

Posted by: China Law Blog | September 27, 2007 1:58 AM

I am a fresh chinese attorney who just got my lisence after one-year intern period.
We definitely have a clear civil law systerm in china,which is adopted from continental Europe law.I have learnt the theory in the university and I also have got involved in the practise of civil law as a paralegal.
I have to say,the damages awarded by chinese court to plantiffs are truely too low.
Most of the torts cases our law firm is doing are trafic accidents.Let me set a death accident for instance,Even if the defendent is at full fault in causing the accident,the plantiff averagely could only be awarded around three hundred thousand yuan,which is only around fourty thousand USD.The standard for damage even differs from people living in rural areas and urban areas.The damage standard and the discrimination have been discussed nationwide for a long time,but the problem still has not been resolved.
In China,plantiffs of a product liability lawsuit would have two options:suing the seller or suing the manufacturer.The first option is based on the consumer protection law and contract law system.Second,is product liability law and torts law.The burden of proof liability is different.
If you really wanna know China,you really got to stay here and talk with people.
Dan,
Thanks for your blog to let people outside china know what china really is.

Posted by: luc | September 27, 2007 2:02 AM

Luc --

Thanks for checking in. Much appreciated.

The funny thing is that China's tort laws are very similar to those in the United States, with the exception of damages.

Believe me, there are plenty of people who believe damage awards in the United States are too high. Then again, there are many (like Mr. Marler) who believe high damage awards are necessary for safety reasons. Though my firm represents businesses, I have no real beef with the US tort system.

Posted by: China Law Blog | September 27, 2007 2:06 AM

"He said that he put himself and this blog in a third camp, which is that China is made up of individuals who, for the most part, want the same sorts of things Americans want: a nice house, job security, a car, a 60 inch plasma TV (whoops, I'm getting too personal here), etc.... I liked that description."

The danger with this third group is that this "hands off" neutrality is that they don't pay attention and don't want to pay attention to Beijing's political ambitons. We all know or should know how the CCP sees itself and China, and what Chinese people are taught and to claim "that's just politics" is to feign ignorance of doing business with the devil.

Many of these same big industries sold steel to Germany and Japan, who could forget IBM's tabulating machines to count executed Jews, Neville Chamberlain, chem and bio weapons sold to Saddam Hussein and Switzerland's "neutrality" while acting as banker for the Nazis.
All "just business as usual" and "no need to pay attention to politics".

A Chinese poster at Free Republic on China's territorial ambitions:

I disagree with you on all counts. First and formost, I am not talking about conquest of the Russian Far East. I am talking about persistent negotiations to RETURN the Russian Far East BACK to China. And I believe it will happen without firing a shot. There will be hard feelings to be sure, especially on Russia's side, but I believe it will happen (the return of the Russian Far East).

One only has to look at Macau and Hong Kong. Macau was returned with little or no fanfare. Hong Kong was returned, without much world condemnation. There were those in Britain that took it hard and was resentful, but in the end, everyone accepted it and a shot was not fired.

Right now, there is considerable tension with Taiwan. But eventually, Taiwan will come under China's jurisdiction. And most of the nations of the world acknowlege that Taiwan is part of China.

Once that is achieved, the next is the Russian Far East. Once again, without a shot being fired. And Mongolia may be on the table as well.

I know you feel I have a "blinkered" view of the world one in which I support Chinese "conquests". But the reality is, China had territories TAKEN away from them during a time when they were incredibly weak. Now, they are simply having them returned. Everything they are laying claim to belonged to them at one time.

There are more I'm sure. The Northern Islands of Japan, for example. That may also be on the table someday. Once again, without a shot being fired.

Posted by: nanheyangrouchuan | September 27, 2007 7:41 AM

You're likely right - I overstated "a bit" to prove the point (that I seem to have done badly) that all the China bashing that has happened over the last several months in the US is quite misplaced - US Corporations do a efficient job of poisoning us without imports. In 15 years of doing food cases, guess how many of the products were traced to China - ZERO. Well, interesting discussion. I feel humbled by your ridicule. I still enjoyed being in China and look forward to going back. Bill

Posted by: Bill Marler | September 29, 2007 9:11 PM

nh --

My view does not include ignoring China's political and military ambitions. But, it generally incorporates the idea that engagement is the best policy.

Posted by: China Law Blog | September 30, 2007 7:52 AM

Bill Marler --

Thanks for checking in.

I agree with you on your point that it is not just Chinese companies with food safety issues. Not at all.

Next time you are going to China, let me know and I will hook you up with both Chinese and foreign lawyers there with whom you should meet regarding your food safety practice.

Posted by: China Law Blog | September 30, 2007 7:54 AM

Wild tangent on the food safty point - neither the Chinese nor their political military ambitions were implicated in the Topps and Cargil e-coli beef recall.

Posted by: Charles Liu | October 6, 2007 3:42 PM

there is the professional world of warcraft power leveling here. welcome.

Posted by: jimelyyes | May 12, 2008 8:32 PM