Ⅱ．Concurrence of Punitive Damages
Food safety disputes are often governed by both public law and private law．In the field of private law, cases involving food safety may be adjusted by several laws, e.g., Contract Law, Tort Liability Law, Law on the Protection of Consumer Rights and Interests, and Food Safety Law．The functions of these laws are parallel, therefore, the coverage of these laws may somehow overlap．When the norms stipulated by different laws are of the same rank in terms of space, time and logic, it may cause conflicts among the norms of the same rank or those of concurrence,[1]which need to be identified by judges.
A．“Tenfold Compensation”v．“Knowingly Buying Counterfeit Goods”
The so-called “knowingly buying counterfeit goods”refers to the acts that the consumers knowingly buy defective products or unsafe foods．Since the “Wang Hai Phenomena”, even professional judges differ in their assessment of whether punitive damages can be applied to the protection of the “knowingly buying counterfeit goods”acts．Those who hold positive attitudes believe that anyone “knowingly buying counterfeit goods”should be protected as a “consumer”in accordance with the Law on the Protection of Consumer Rights and Interests and the Food Safety Law if the foods they bought do not conform to food safety standards．Those who hold negative attitudes believe that “the essence of ‘knowingly buying counterfeit goods' is an act of returning evil for evil”.[2]In trials, “if the seller can prove the consumer knowingly bought counterfeit goods for profits, then punitive damages are inapplicable because the business operation of buying and selling is invalid”.[3]Faced with the huge discrepancy among courts, the Supreme People's Court chose “Sun Yinshan Case”as the guiding case to end the disputes over “knowingly buying counterfeit goods”．
There are many cases concerning disputes over food safety．The specialty of “Sun Yinshan Case”lies on the video record of Auchan Hypermarket, Co., Ltd．Jiangning Store and the admission made by the plaintiff Sun Yinshan, which can make the court identify that Sun Yinshan is one of those who “knowingly buy counterfeit goods”.[4]In this way, the problems over “knowingly”in similar cases can be settled．Then comes the question of the application of laws to the acts of “knowingly buying counterfeit goods”．The Trial Committee of the Supreme People's Court holds that “where consumers buy foods that do not conform to food safety standards, regardless of knowingly buying foods that do not conform to food safety standards, the consumers, can demand that the producer or seller pay damages ten times the purchase price of the food, or other compensation for losses in accordance with law, the people's court shall uphold both requests made by the consumers”.[5]
The “Sun Yinshan Case”, as the guiding case No.23 promulgated by the Supreme People's Court, has its significance in supporting the consumers who “knowingly buy counterfeit goods”claim for “tenfold compensation”in accordance with Paragraph 2 of Article 96 of the Food Safety Law．In other words, “knowingly buying counterfeit goods”cannot be a demurrer to “tenfold compensation”．The relationship between “knowingly buying counterfeit goods”and “tenfold compensation”needs to be further clarified．Are people who “knowingly buy counterfeit goods”consumers? Do conflicts exist between the Food Safety Law and the Law on the Protection of Consumer Rights and Interests? Shall the court uphold Sun Yinshan's claim if his claim is based on the Law on the Protection of Consumer Rights and Interests instead of the Food Safety Law? These questions have long been the subject of debate in jurisprudence and legal practice, which needs to be clarified．In the author's opinion, people who “knowing buy foods that do not conform to food safety standards”should be protected in accordance with the Food Safety Law, but not within the adjustment scope of the Law on the Protection of Consumer Rights and Interests．The reasons are as follows:
Firstly, the Law on the Protection of Consumer Rights and Interests and the Food Safety Law are legal norms of the same rank, which entitles consumers to claim for “treble compensation”and “tenfold compensation”respectively．The effective and adjustment scope of the Law on the Protection of Consumer Rights and Interests and the Food Safety Law, both of which are of the same rank, overlap to some extent．Therefore, the principle of “priority of law at the higher level over that at the lower level”cannot be applied．The two claims, “treble compensation”and “tenfold compensation”, entitled by the two laws to consumers respectively are claims for punitive damages．The two laws are not exactly the same in terms of the content and constitutive element．The plaintiff also has the right to choose．Under this circumstance, the “alternative accumulation of claims”[6]shall be applied, which is different from the concurrence of claims.
Secondly, “knowingly buying counterfeit goods”is not within the adjustment scope of the Law on the Protection of Consumer Rights and Interests; hence, the rule of “treble compensation”is not applicable．Article 55 of the revised Law the Protection of Consumer Rights and Interests raises the punitive damage awards from double to treble．Besides, the “treble compensation”is extended to fraudulent acts which are adjusted both by the institution of juristic act and the institution of tortious act．Still, the problem of the application of law to “knowingly buying counterfeit goods”has not been resolved．There are two reasons accountable for scholars' negative attitude to its resolution: one is that people who “knowingly buy counterfeit goods”are not consumers,[7]the other is that if the consumers knowingly buy counterfeit goods, the selling of counterfeit goods by the business operators are not considered fraudulent.[8]In the author's opinion, the rule of “treble compensation”stipulated in Article 55 of the Law on the Protection of Consumer Rights and Interests is inapplicable to the act of “knowingly buying counterfeit goods”．The fundamental reason is that the revised version maintained the adjustment scope of the old version stipulated in Article 2, “The rights and interest of consumers who purchase and use goods or receive services for consumption needs shall be protected by this law; matters not stipulated in this law shall be protected by other relevant laws and regulations”．As literally interpreted, the applicable scope of the Law on the Protection of Consumer Rights and Interests shall contain two constitutive elements: “consumer”and “consumption”．The concept of consumer is relative to that of producer or seller．If Wang Hai is not considered as a consumer, then he is a producer or a seller, which is contrary to common sense．Article 2 of the Law on the Protection of Consumer Rights and Interests is not defining the connotation of consumer, but more of setting a limit on the applicable scope of the law, which is not fully realized by the legal practices in China, trapping people in a dilemma of “whether people who knowingly buy counterfeit goods are consumers”．In fact, just like “a white horse is a horse”, the consumer who “knowingly buy counterfeit goods”are still consumers, but are “a kind of consumers without consumption”, who are not within the adjustment scope of Law on the Protection of Consumer Rights and Interests, and shall not be protected by this law．Regarding this, the author has different opinions from the effective judgments.[9]
Finally, since the act of “knowingly buying counterfeit goods”is not excluded from Paragraph 2 of Article 96 of the Food Safety Law, the rule of “tenfold compensation”shall be applied based on the principle of legal prescription of punitive damages．If Article 2 of the Law on the Protection of Consumer Rights and Interests is inapplicable to “consumers without consumption”, then the “consumers without consumption”are within the adjustment scope of Food Safety Law indiscriminately．Throughout the Food Safety Law, regardless of the purpose or the motive of the consumers and the defects of the expressions of the consumers, the rights and interest of consumers shall be protected by this law as long as they purchase foods not conforming to food safety standards．Therefore, the judgment of the Sun Yinshan Case that ruled the defendant to pay “tenfold compensation”to Sun is proper and correct in the application of law.
B．“Tenfold Compensation”v．“Punitive Damages for Product Defects”
The relationship between Paragraph 2 of Article 96 of the Food Safety Law and Article 47 of the Tort Liability Law is one of the most difficult issues in the practice of law．The former stipulates a norm of “tenfold compensation”, while the later stipulates “punitive damages for product defects”.[10]As for the concurrence between the two rules, there are two representative opinions．One is from the field of academia holding the opinion that “tenfold compensation”and “punitive damages for product defects”are norms of the same rank, therefore, the concurrence rule of the priority of special law over general law is inapplicable here.[11]The other is from legal practice; judges think that “from the perspective of the principles of the application of laws, the Tort Liability Law and the Food Safety Law are laws of the same rank．In terms of the disputes over food quality, the Tort Liability Law is a general law, while the Food Safety Law is a special law.”Therefore, the norm of “tenfold compensation”,[12]which is a rule of a special law, shall be prioritized.
The aforementioned “special norm theory”has been quite influential．In 2009, the explanations of Food Safety Law prepared by Legislative Affairs Commission of the NPC Standing Committee highlighted that punitive damages are reflections of their nature in tort liability.[13]In recent studies, some scholars argue that “in terms of food products, liability for punitive damages under the Food Safety Law must also be liability for punitive damages under the Tort Liability Law．The only difference lies on cases involving personal injuries, in which the punitive awards under the Tort Liability Law can be larger than that under the Food Safety Law, or an additional award of punitive damages may be provided according to the Tort Liability Law.”[14]The popularity of “the special tort norm theory”is due to its accordance with logic—since food is a subordinate concept of product, therefore, a norm stipulating punitive damages under the Food Safety Law is a special norm of those stipulating punitive damages under the Tort Liability Law.
In the author's opinion, the “tenfold compensation”and “punitive damages for food defects”are two competing norms of claims, in which the party has the right to choose．Between the two competing norms of the same rank, how can I determine whether their relationship belongs to that between the special law and the general law? The legal standards can only be the constituent elements．Logically, if statute B contains all the constituent elements of statute A, while statute A doesn't contain all the constituent elements, then statute B is special with respect to statute A.[15]To be more specific, as far as the norm of “punitive damages for product defects”is concerned, the prerequisite for its application is causing serious bodily injury or death, which means that “the bodily injury or death should be something that already happened, not only a possibility of suffering harm or injury”[16]; as far as the norm of “tenfold compensation”is concerned, the prerequisite of the application needs not to be the actual losses, the constituent element is Where a producer produces food that fails to meet food safety standards or a business operator knowingly engages in business operation of such food”．The constitutive elements of these two norms are not logically inclusive．The opinion that Paragraph 2 of Article 96 of the Food Safety Law is a special norm of Article 47 of the Tort Liability Law is therefore not sound.
The defect products and unsafe foods are overlapping in terms of the features in law．On the one hand, foods that do conform to food safety standards may not necessarily lead to bodily injury, e.g., according to Paragraph 9 of Article 28 of Food Safe Law, the pre-packed food without labels are unsafe foods, but not necessarily leading to bodily injury．On the other hand, foods that conform to food safety standards my lead to bodily injury, e.g., the packages of biscuits that sold at supermarkets are absent with notice, and after eating the biscuits, the children of the consumers may suffer allergies shock dermatitis because of their allergy to some of the ingredients of the biscuits.[17]It is very likely that the norm of “tenfold compensation”and that of “punitive damages for product defects”maybe concurrent since the foods that lead to bodily injury are often not conforming to food safety standards．When it comes to cases of unsafe foods causing death or serious bodily injury, Paragraph 2 of Article 96 of the Food Safety Law and Article 47 of the Tort Liability Law maybe also concurrent, how do we apply the laws? It needs to be pointed out that the concurrence of norms here is concurrence of claims; in the case of no “special norms exclude general norms”,[18]the victim is entitled to choose the norm of claim, which can be either the claim based on the norm of “tenfold compensation”, or the one based on the norm of “punitive damages for product defects”.[19]As for the court, it should trial according to the constituent elements and the pleading of the plaintiff.
[1] See Lei Lei, The Equal-rank Conflicts of Legal Norms and Their Resolutions: The Interrelation of Legal Rules and Legal Principles as a Basic Point, Taiwan University Law Journal, Vol.4, 2009.
[2] See Ying Feihu, On the Application of Punitive Damages to the “Knowingly Buying Counterfeit Goods”—From the Perspectives of Legal Economic and Legal Sociology, China Legal Science, Vol.6, 2004.
[3] See Ma Qiang, On the Issues of Fraud in Trial Practice, Law Science Magazine, Vol.2, 2003.
[4] See Civil Judgment by Nanjing Jiangning District People's Court (Jiang Ning Kai Min Chu Zi No.646), 2012.
[5] Guiding Case No.23 Issued by the Supreme People's Court, Jan.26, 2014.
[6] See Christian von Bar ＆ Ulrich Drobnig, The Interaction of Contract Law and Tort and Property Law in Europe: A Comparative Study, Sellier European Law Publishers, 2004, p.198.
[7] The representative opinions can be seen in Liang Huixing, Interpretation and Application of Article 55 in the Law of the PRC on the Protection of the Rights and Interests of Consumers, People's Court Daily, Mar.9, 2001, p.3.
[8] According to the report on the website of China Court, the courts in Shanghai holds that the selling of counterfeit goods by the business operators is not considered fraud, if the consumers knowingly buy counterfeit goods．See http://old.chinacourt.org/public/detail.php?id=107727, visited on Feb.20, 2015.
[9] In the effective judgment of SUN Yinshan Case, the court opined: “As long as the commodity purchased and used or the service received through a market transaction is for the purpose of meeting the needs of individual and family life, rather than for the purpose of meeting the needs of either production and business activities or occupational activities, the buyer should be recognized as a consumer who buys the commodity or service, who should be protected by this law”．See Civil Judgment by Nanjing Jiangning District People's Court (Jiang Ning Kai Min Chu Zi No.646), 2012.
[10] Article 47 of the Tort Liability Law stipulates that “where any producer or seller knowingly produces or sells defective products, causing death or serious damage to the health of others, the injured party may request appropriate punitive damages.”In this paper, this rule is referred to as “punitive damages for product defects”.
[11] See Zhou Jianghong, Concurrence of Liability for Punitive Damages and Their Applications—Focusing on Article 46 of the Tort Liability Law and Article 96 Paragraph 2 of the Food Safety Law, Legal Science, Vol.4, 2010.
[12] See Chen Ling, Huang Chen, The Application of Liability Concurrence of Punitive Damages, People's Judicature, Vol.8, 2014.
[13] See Xin ChunYing, Interpretation of Food Safety Law of the PRC, China Legal Publishing House, 2009, p.271.
[14] See Chen Chengtang, On the Role of Loss in Liability for Punitive Damages, Legal Science, Vol.9, 2014.
[15] See Chin Chi-fang, A Cogitation on the Interrelation of Conflicting Laws, Hsuan Chuang Law Journal, Vol.3, 2005.
[16] The Understanding and Application of the Tort Liability Law of PRC, People's Court Press, 2010, p.342.
[17] See Liao Chunmei, Compensation Needed for Damages Caused by Foods Conform to Food Safety Standards, Economic Information Daily, Sep.14, 2014.
[18] See Dieter Schwab, Einführung in das Zivilrechttrans, trans．by Zheng Chong, Law Press·China, 2006, p.166.
[19] When the norm of “tenfold compensation”and the norm “punitive damages for product defects”are competing, normally applying Article 47 of the Tort Liability Law is more favorable to the plaintiff．It is still possible for the plaintiff might choose Article 96 of the Food Safety Law as the basis of claim out of consideration for bearing the burden of proof.