Amicus Curiae Brief — Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co., 137 S. Ct. 2320 (2017) (No. 16-1220)

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No. 16-1220

In The

Supreme Court of the United States

ANIMAL SCIENCE PRODUCTS, INC., ET AL.,

Petitioners,

HEBEI WELCOME

PHARMACEUTICAL CO., LTD., ET AL.,

Respondents.

On Writ Of Certiorari To The

United States Court Of Appeals

For The Second Circuit

BRIEF OF CHINESE PROFESSORS OF

ADMINISTRATIVE LAW AS AMICI CURIAE

IN SUPPORT OF RESPONDENTS

—

GEOFFREY SANT TIMOTHY J. DROSKE

NATHANIEL H. AKERMAN Counsel of Record

LANIER SAPERSTEIN Dorsey & WuitTNey LLP

JEREMY A. SCHLOSSER 50 South Sixth Street

MICHELLE NG Suite 1500

CAROL LEE Minneapolis, Minnesota 55402

Dorsey & WHITNEY LLP oe (612) 340-2600

51 West 52nd Street i oom

New York, New York 10019

Strut (Ray) Liu

sant com :

7 Twin Towers (West)

sherman eects, Suite 11014

lee.carel@deresy.com Telephone: +86 (10) 8513-5900

liu.ray@dorsey.com

Counsel for Amici Curiae YING Songnian, MA Huaide,

JIANG Ming’an, YU An, YANG Jianshun, and LI Honglei

COCKLE LEGAL BRIEFS (800) 225-6964

WWW COCKLELEGALBRIEFS COM

TABLE OF CONTENTS

Page

_ | | genera i

INTEREST OF THE AMICI CURIAE................... 1

SUMMARY OF ARGUMENT ..............0ccccecseseesesees 4

ee itictctitesentncitesnasinnccsabtinsinnatapitiasareaniicienis 8

I. It is a Foundational Principle of Chinese

Law that “The Rule-Maker has the Author-

ity to Interpret the Rule” ................ccc0000000. 9

Il. The Ministry of Commerce’s Interpretation

of Its Rules is Authoritative ........................ 14

Ill. The Ministry of Commerce’s Interpretation

Remains Authoritative and is Deferred to

IED cinsyrancinserensmecmimcaninaneanniacscesnsncnmeeens 20

APPENDIX A: Certified English translation of

Huazhong Bearing Factory v. Labor Bureau of

Binhu District, Wuxi Municipality .................. App. 1

APPENDIX B: Certified English translation of

Tianjin Yuyou Enterprise Co., Ltd. v. Tianjin

Economic and Technological Development Area

Administrative Committee .............00.c0ccceeceeeee App. 18

TABLE OF AUTHORITIES

CASES

HUA ZHONG ZHOU CHENG CHANG BU FU WU XI SHI

BIN HU QU LAO DONG JU SHE HUI BAO ZHANG XING

ZHENG QUE REN AN [Huazhong Bearing Factory

v. Labor Bureau of Binhu District, Wuxi Mu-

nicipality] (Intermediate People’s Court of

Wuxi Municipality, Jiangsu Province (2005)

Xi Xing Zhong Zi No. 50, Oct. 31, 2005) ............

In re Vitamin C Antitrust Litig., No. 13-4791,

Dkt. 105 (2d Cir. Apr. 14, 2014)....ccccccsccssesseeseeen

Ocean Line Holdings Ltd. v. China Nat'l Char-

tering Corp., 1:07-cv-08123, Dkt. 28 (S.D.N_Y.

IE. GR, BSD sececserecsseessmncomevessemmmnnmanessaneneees

Societe Nationale Industrielle Aerospatiale v.

U.S. Dist. Court for the S. Dist. of Towa, 482

ee CE GED centrcccncenscuscnsdensrneneemmumeiniieénenicone

Stansell v. BGP, Inc. , 8:09-cv-2501, Dkt. 56 (M.D.

RN NN I a ccinseintveniniesndeonintnintsnen

TIAN JIN YU YOU QI YE YOU XIAN GONG SI YU TIAN

JIN JING JI JI SHU KAI FA QU GUAN LI WEI YUAN

HUI XING ZHENG JIU FEN ER SHEN AN [Tianjin

Yuyou Enterprise Co., Ltd. v. Tianjin Eco-

nomic and Technological Development Area

Administrative Committee] (Supreme Peo-

ple’s Court (1997) Xing Zhong Zi No. 21, July

Hi, SITE hsiscetccrsicnetasriaesiaditieesislattaaastbaivontininiiabiininitindecaies

Trans Chemical Ltd. v. China Nat'l Machinery

Import and Export Corp., 978 F. Supp. 266

GEUED WD: FAD Pissinenccncnccemssemsnanssenscimeconsnsecseserneeens

iii

TABLE OF AUTHORITIES — Continued

STATUTES AND RULES

GUAN YU TIAO ZHENG CHU KOU SHANG PIN HAI GUAN

SHEN JIA MU LU DE TONG ZHI [Notice Regarding

Adjustment of the Customs Price Verification

Catalogue of Export Commodities] (Wai Jing

Mao Mao Fa [2002] No. 187), Mar. 29, 2002

GRP corseensavensveniscesocevravinusemenueimsininnsintiepienusons

GUI ZHANG ZHI DING CHENG XU TIAO LI [Regula-

tions on Procedures for the Formulation of

Rules] (Decree No. 322 of the State Council of

the People’s Republic of China) art. 33, Nov.

Ek ne

GUO WU YUAN GUAN YU XIU GAI XING ZHENG FA GUI

ZHI DING CHENG XU TIAO LI DE JUE DING [Deci-

sion of the State Council on Revising the Reg-

ulations on Procedures for the Formulation of

Administrative Regulations] (Decree No. 694

of the State Council of the People’s Republic

of China) art. 17, Dec. 22, 2017 (P.R.C.) ............

GUO WU YUAN BAN GONG TING GUAN YU XING ZHENG

FA GUI JIE SHI QUAN XIAN HE CHENG XU WEN TI

DE TONG ZHI [Notice of the State Council Gen-

eral Office Concerning the Authority of Inter-

pretation of Administrative Regulations and

Procedural Matters] (Guo Ban Fa [1999] No.

Eh ee

Li FA FA [Law on Legislation] art. 45, Mar. 15,

SINE GIA) csscsccssdnncenssccsentoneecscnnennneespnscssncsovsens

semen 4

— 9

— 11

— 15

ance 10

TABLE OF AUTHORITIES — Continued

QUAN GUO REN MIN DAI BIAO DA HUI CHANG WU WEI

YUAN HUI GUAN YU JIA QIANG FA LU JIE SHI GONG

ZUO DE JUE YI [Resolution of the Standing

Committee of the National People’s Congress

Providing an Improved Interpretation of the

Law], June 10, 1981 (P.ih.C.) ..........:ccccceecseseeeeeees

QUAN GUO REN MIN DAI BIAO DA HUI CHANG WU WEI

YUAN HUI GUAN YU “ZHONG HUA REN MIN GONG

HE GUO XIANG GANG TE BIE XING ZHENG QU JI BEN

FA” DI 22 TIAO DI 4 KUAN HE DI 24 TIAO DI 2 KUAN

DI (3) XIANG DE JIE SHI [Interpretation by the

Standing Committee of the National People’s

Congress of Article 22.4 and Article 24.2(3) of

the Basic Law of the Hong Kong Special Ad-

ministrative Region of the People’s Republic

of China], June 26, 1999 ..............cccccccceeeeeeeeeeeees

XIAN FA [The Constitution] art. 57, Mar. 11, 2018

TED Densececensssdbniccenesnsnesssensenensetneosevespsansecteeneovers

XING ZHENG FA GUI ZHI DING CHENG XU TIAO LI

{Regulations on Procedures for the Formulation

of Administrative Regulations] (Decree No.

321 of the State Council of the People’s Repub-

Page

panne 14

sions 13

secu 10

lic of China) art. 31, Nov. 16, 2001 (P.R.C.) ......10, 11

OTHER AUTHORITIES

DONG Hao, Si fa jie shi lun |Judicial Interpre-

tation Theories] (Beijing: Zhongguo Zhengfa

Daxue Chubanshe [China University of Polit-

ical Science and Law Press], 1999)....................

TABLE OF AUTHORITIES — Continued

ZHANG Zhi Ming, Fa li jie shi xue |The Study

of Legal Interpretation] (Beijing: Zhongguo

Renmin Daxue Chubanshe [China Renmin

University Press], 2015)

INTEREST OF THE AMICI’

Amicus curiae YING Songnian is University Pro-

fessor at the China University of Political Science

and Law (CUPL), Honorary President of the Adminis-

trative Law Studies Institute of China Law Society

(ALSCLS) and Chairman of the East Asia Institute of

Administrative Law. Professor YING was a deputy to

the 9th and 10th National People’s Congress (NPC)

and a member of the NPC Committee for Internal and

Judicial Affairs. He is a principal leader of the Com-

mittee of Legislative Studies on Administrative Law

of the NPC Commission of Legislative Affairs, an ex-

pert advisory body on administrative law to the NPC

Standing Committee. In that capacity, he was involved

in the drafting of various People’s Republic of China

(PRC) statutes, including the Administrative Litigation

Law, State Compensation Law, Law on Administrative

Penalties, Law on Legislation and Administrative Li-

cense Law of the People’s Republic of China.

Amicus curiae MA Huaide is Professor and Vice

President of CUPL, President of ALSCLS and Editor-

in-Chief of Administrative Law Studies. Professor MA

‘ All parties to the case have consented to the filing of this

brief. Petitioners consented in writing, and Respondents provided

blanket consent by a February 15, 2018 letter to the Clerk. In

accord with Supreme Court Rule 37.6, amici affirm that no

counsel for a party authored this brief in whole or in part, and

no such counsel or party made any monetary contribution in-

tended to fund the preparation or submission of this brief. No

person other than amici or their counsel has made any mone-

tary contribution toward the preparation or submission of this

brief.

was China's first Ph.D. in the study of administrative

litigation law (from CUPL,). He has been a senior visit-

ing scholar at Yale University and a visiting scholar at

Boston University and the University of Sydney (Aus-

tralia). He was involved in the formulation of the State

Compensation Law, Law on Administrative Penalties,

Law on Legislation and Administrative License Law,

among other statutes. He concurrently acts as legal

counsel to PRC government agencies including the Na-

tional Development and Reform Commission and the

Ministry of Housing and Urban-Rural Development.

Amicus curiae JIANG Ming’an is Professor of Law

and Director of the Constitutional and Administrative

Law Center at Peking University (PKU), Vice Presi-

dent of ALSCLS and Editor-in-Chief of Administrative

Law Review. Professor JIANG has been a senior visit-

ing scholar at UCLA and the University of Cambridge

(UK) and a visiting scholar at the University of Wash-

ington. He has been involved since 1984 in the formu-

lation of PRC administrative laws and regulations,

among them the Administrative Litigation Law, Ad-

ministrative Review Law, State Compensation Law,

Law on Administrative Penalties, Law on Legislation,

Administrative License Law and Administrative En-

forcement Law. He is a special advisor to the Supreme

People’s Court and an expert advisor to government

agencies such as the Ministry of Civil Affairs and Min-

istry of Culture.

Amicus curiae YU An is Professor of Law in the

School of Public Policy and Management (SPPM) and

Director of the Institute of Government at Tsinghua

University, Vice President of ALSCLS and Vice Pres-

ident of the WTO Law Research Society of China.

Professor YU received his S.J.D. degree from Peking

University and was a visiting scholar at Heidelberg

University (Germany) and Aarhus University (Den-

mark). He is an expert advisor to the Supreme Procu-

ratorate, the Ministry of Education and the Ministry of

Justice.

Amicus curiae YANG Jianshun is Professor of Law

and Director of the Comparative Administrative Law

Institute at Renmin University, Associate Chief Editor

of the Jurist and Vice President of ALSCLS. He re-

ceived his S.J.D. degree from Hitotsubashi University

(Japan).

Amicus curiae LI Honglei is Professor at the Insti-

tute of Law, Chinese Academy of Social Sciences

(CASS), Director of the Department of Constitutional

and Administrative Law, Standing Member and Dep-

uty Secretary General of ALSCLS and Vice Chair

of the Committee on Government Regulation. He re-

ceived his S.J.D. degree from Peking University and

was a visiting scholar at Columbia University, Emory

University and the London School of Economics (UK).

He was adjunct professor at the University of Yamagu-

chi (Japan) and had a one-year secondment at the NPC

Commission of Legislative Affairs where he was deeply

involved in the drafting of many legislative bills.

Amici have an academic interest in, and expertise

on, the subject of whether the Ministry of Commerce of

the People’s Republic of China, or MOFCOM (formerly

the Ministry of Foreign Trade and Economic Coopera-

tion, or MOFTEC; hereinafter referred to as “Ministry

of Commerce”) is an authoritative interpreter of the

rules it makes. Petitioners’ Brief, as well as the Brief

of Amici Curiae Donald Clarke and Nicholas Calcina

Howson in Support of Petitioners, have challenged the

Ministry of Commerce’s representation to the Second

Circuit that it “has unquestioned authority to interpret

applicable Chinese law.” Pet. Br. 20; see Clarke & How-

son Amicus Br. 17. This brief supports Respondents

and the Ministry of Commerce, by explaining that a

foundational principle underlying the Chinese system

of legal interpretation is the concept that “the rule-

maker has the authority to interpret the rule,” and

thus the Ministry of Commerce has authority to inter-

pret applicable Chinese law.

—

SUMMARY OF ARGUMENT

The Ministry of Commerce is the constituent min-

istry primarily responsible for regulating China's in-

ternational trade, and is immediately under the level

of the State Council (equivalent to a cabinet-level de-

partment in the United States). In response to the

Ministry of Commerce’s amicus briefs in this matter

concerning its “2002 Notice,” Petitioners (and the

? Petitioners’ Brief refers to the Ministry of Commerce as

“the Ministry.” Pet. Br. 5 & n.3.

® GUAN YU TIAO ZHENG CHU KOU SHANG PIN HAI GUAN SHEN JIA

MU LU DE TONG ZHI [Notice Regarding Adjustment of the Customs

Price Verification Catalogue of Export Commodities] (Wai Jing

supporting amicus brief by Clarke and Howson) have

challenged the Ministry of Commerce’s representation

that it “has unquestioned authority to interpret appli-

cable Chinese law.” Pet. Br. 20; see Clarke & Howson

Amicus Br. 17. The Ministry of Commerce’s interpreta-

tive authority under Chinese law, however, is clear and

well-established. In accordance with China’s system of

legal interpretation, the Ministry of Commerce has

the power to interpret its own rules. The Ministry of

Commerce makes legally binding and authoritative in-

terpretations of the rules it establishes both through

administrative rulemaking and through documents

setting forth administrative standards.

A foundational principle underlying the Chinese

system of legal interpretation is the concept that “the

rule-maker has the authority to interpret the rule.”

The Law on Legislation; the Regulations on Proce-

dures for the Formulation of Administrative Regu-

lations; and the Regulations on Procedures for the

Formulation of Rules each provide that the entity es-

tablishing statutes or rules necessarily has authority

to interpret these statutes and rules. The reason why

China’s system of legal interpretation has established

the principle of “the rule-maker has the authority to

interpret the rule,” is because China ascribes to the be-

lief that the goal of legal interpretation is to seek out

the rule’s original intended meaning. The entity that

Mao Mao Fa [2002] No. 187), Mar. 29, 2002, http//wms.mofcom.gov.

en/article/zcfb/200208/20020800037837.shtml (P.R.C.).

established the rule is the entity that is best suited to

explain the original meaning.

Based on this principle of “the rule-maker has the

authority to interpret the rule,” the Ministry of Com-

merce has the authority to interpret its 2002 Notice

because it was the Ministry of Commerce that pre-

pared and issued the administrative rule. In the PRC,

it is uncontroverted that the Ministry of Commerce

has the authority to interpret its own rules. And the

Ministry of Commerce is continuously doing so, issuing

interpretations through a variety of means, including

opinions, notices, provisional rules, response letters,

formal replies, and other documents.

The principle that “the rule-maker has the au-

thority to interpret the rule” does not exclude other

governmental bodies from interpreting rules. The au-

thority to interpret rules is not restricted to a single

governmental entity. However, the rule-maker’s own

interpretation is authoritative. For example, other gov-

ernmental bodies may interpret laws passed by the

National People’s Congress (NPC) and its Standing

Committee, but the NPC Standing Committee’s own

interpretation is the most authoritative, and other

interpretations must be consistent with the NPC

Standing Committee’s interpretations. When a minis-

try (such as the Ministry of Commerce) interprets the

very rules that it has created, its interpretation is

authoritative. All other ministries must follow that

ministry’s authoritative interpretation, which plays an

important role in guiding subordinate administrative

bodies in implementing their administrative enforce-

ment activities.

The authoritativeness of the Ministry of Com-

merce’s interpretation of the rules it has created is not

reduced by the existence of mechanisms for analyzing

and supervising the implementation of those interpre-

tations. The interpretations are authoritative because

the government body’s act of interpretation — here, by

the Ministry of Commerce — has regulatory impact and

the force of law.

Moreover, in China, the rule-maker’s interpreta-

tion of its own rules is controlling upon the courts.

When a State Council ministry — such as the Ministry

of Commerce — interprets its own regulations, the

Chinese courts give those interpretations deference be-

cause the ministry best understands the original in-

tent and purpose of its own regulations. Deference is

also given for the public policy reason that a ministry

under the State Council, which is responsible for regu-

lating matters within its field, is in a better position to

address specialized issues and policy issues in that

area.

Here in particular, where foreign trade is 2 sector

requiring strong specialized knowledge and policy ex-

pertise, Chinese courts would be compelled — outside

of extreme cases where the interpretation clearly vio-

lates the law or a ministry has abused its power — to

defer to the guidance of the responsible ministry, the

Ministry of Commerce. The deference accorded to the

Ministry of Commerce’s own rules in China vitiates

Petitioners’ questioning of the Ministry of Commerce's

“law-interpreting power.” See Pet. Br. 43 (emphasis in

original).

ARGUMENT

The Ministry of Commerce* issued the “2002 No-

tice” at issue in this suit and filed the amicus brief be-

fore the United States District Court for the Eastern

District of New York and the United States Court of

Appeals for the Second Circuit concerning Chinese law.

It correctly asserted in its amicus brief to the Second

Circuit that it “has unquestioned authority to interpret

applicable Chinese law.” Br. for Amicus Curiae Minis-

try of Commerce of the People’s Republic of China at

14, Dkt. 105, Jn re Vitamin C Antitrust Litig., No. 13-

4791 (2d Cir. Apr. 14, 2014). The Ministry of Com-

merce’s assertion reflects a well-established principle

under Chinese law. In accordance with China’s system

of legal interpretation, the Ministry of Commerce has

the power to interpret its own rules. The Ministry of

Commerce makes legally binding and authoritative in-

terpretations of the rules it establishes both through

administrative rulemaking and through documents

setting forth administrative standards.

* The Ministry of Commerce, in its position immediately

under the State Council, is equivalent to a United States cabinet-

level department, and is primarily responsible for regulating

China’s international trade.

I. Itis a Foundational Principle of Chinese Law

that “The Rule-Maker has the Authority to In-

terpret the Rule”

The Chinese system of legal interpretation holds

that government entities necessarily have authority to

interpret the rules they make, i.e., “the rule-maker has

the authority to interpret the rule.” See, eg, ZHANG

Zhi Ming, Fa lit jie shi xue [The Study of Legal In-

terpretation| 152 (Beijing: Zhongguo Renmin Daxue

Chubanshe [China Renmin University Press], 2015)

(hereinafter “The Study of Legal Interpretation”).°

That doctrine is not only a foundational principle of

Chinese legal theory, it is also set forth in law. Article

33 of the Regulations on Procedures for the Formula-

tion of Rules states “the power to interpret rules shal!

reside with the rule-maker.” GUI ZHANG ZHI DING CHENG

XU TIAO LI [Regulations on Procedures for the Formula-

tion of Rules) art. 33 (promulgated by Decree No. 322

of the State Council of the People’s Republic of China,

° As that treatise explains, “Statutes, administrative regula-

tions, and local regulations are all of the same nature. What must

be noted here is that the concept ‘the rule-maker must have the

auchority to interpret laws’ does not need to itself be law in order

to be firmly accepted by the people without any doubts at all. This

is because the common accepted belief among the people is that

legal interpretation must match the original intent of the legisla-

ture and must match the intended purpose behind the creation of

the law. And when it comes to the original intent or the purpose

behind the creation of the law, there is nobody who knows it better

than the legislative body itself.” ZHANG Zhi Ming, The Study of

Legal Interpretation, at 152 (emphasis added).

Nov. 16, 2001), http//www.gov.cn/gongbao/content/2002/

content_61556.htm (P.R.C.).

A number of other Chinese laws set forth the right

of individual rule-making bodies, such as the NPC, to

interpret the rules it makes. Thus, for example, Article

45 of the Law on Legislation provides that the NPC

Standing Committee is the proper authority for inter-

preting the statutes® passed by the NPC: “The power

to interpret a national law shall vest in the Standing

Committee of the National People’s Congress.” Li FA FA

{Law on Legislation] art. 45 (as amended, promulgated

by the Nat'l People’s Cong., Mar. 15, 2015, effective Mar.

15, 2015), http:/Awww.npc.gov.cn/npe/dbdhhy/12_3/2015-

03/18/content_1930713.htm (P.R.C.).’ A similar rule, em-

bodying the same fundamental principle, expressly ap-

plies to regulations. Article 31 of the Regulations on

Procedures for the Formulation of Administrative Reg-

ulations provides, “The State Council shall interpret

those articles of administrative regulations that need

further definitions or supplementary provisions.” XING

ZHENG FA GUI ZHI DING CHENG XU TIAO LI [Regulations on

® The reference to statutes here means the legal norms set

by the NPC and its Standing Committee. The statutes made by

the NPC are interpreted by its Standing Committee as the entire

NPC only meets once a year whereas the NPC Standing Commit-

tee is a permanent organ of the NPC. See XIAN Fa [The Constitu-

tion) art. 57, Mar. 11, 2018 (P.R.C.). An English translation of the

2007 version of the Constitution is available at: http://www.npc.

gov.cn/englishnpce/Constitution/2007 -1 1/15/content_1372965.htm.

The Constitution was amended in March 2018, but the language

of art. 57 remains unchanged.

’ An English translation is available at: https://www.china

lawtranslate.com/20 1 5lawlaw/7lang=en.

Procedures for the Formulation of Administrative Reg-

ulations] art. 31 (promulgated by Decree No. 321 of the

State Council of the People’s Republic of China, Nov.

16, 2001), http://www. pkulaw.cn/fulltext_form.aspx?Db

=chl&Gid=38101 (P.R.C.).*

The reason why China’s system of legal interpre-

tation has established the principle of “the rule-maker

has the authority to interpret the rule” is because

China ascribes to the belief that the goal of legal inter-

pretation is to seek out the rule’s original intended

meaning. The entity that established the rule is the en-

tity that is best suited to explain the original meaning.

This is why China’s legal community has a common

understanding that the entity that creates the rule

necessarily has the authority to interpret it. As

* Effective May 1, 2018, this regulation has been amended to

provide, “The State Council shall interpret administrative regu-

lations in any of the following circumstances: (1) where the spe-

cific meaning of provisions of administrative regulations needs to

be further clarified; or (2) where the emergence of new circum-

stances after formulation of administrative regulations requires

clarification of their applicable basis.” XING ZHENG FA GUI ZHI DING

CHENG XU TIAO LI [Regulations on Procedures for the Formulation

of Administrative Regulations} art. 31 (promulgated by Decree

No. 321 of the State Council of the People’s Republic of China on

Nov. 16, 2001, and revised pursuant to art. 17 of Decree No. 694 of

the State Council of the People’s Republic of China, the Decision of

the State Council on Revising the Regulations on Procedures for the

Formulation of Administrative Regulations, dated Dec. 22, 2017, and

effective as of May 1, 2018), http//www.gov.cn/zhengce/content/20 1 8-

01/16/content_5257039.htm (P.R.C.). An English translation of the

current version is available at: http//www.gov.cn/english/aws/2005-

08/24/content_25827 htm. An English translation of the amended ver-

sion is available at: https//law yale.edu/system/files/documents/pdf/

china/2018_sc_en_rev_admin_regulation_procedure.pdf.

explained by Professor DONG Hao (the Vice President

of the Administrative Law Studies Institute of China

Law Society’), “Legislation is the act of turning the leg-

islator’s intent into law. Therefore, the purpose of legal

interpretation is to seek out and implement the legis-

lator’s intent. This is why the legislative body itself is

the most appropriate entity for interpreting these

laws.” DONG Hao, Si fa jie shi lun |Judicial Inter-

pretation Theories], 278 (Beijing: Zhongguo Zhengfa

Daxue Chubanshe [China University of Political Sci-

ence and Law Press], 1999).

This concept, that legal interpretation consists of

seeking out and implementing the intent of the legis-

lature, is repeatedly expressed in Chinese laws and

regulations. In cases of national significance, the NPC

Standing Committee has reiterated that it is legisla-

tive intent that must be followed when interpreting

and applying the law. In the case of the Basic Law of

the Hong Kong Special Administrative Region of the

People’s Republic of China (“Basic Law”), the NPC

Standing Committee has passed laws specifically re-

quiring that legislative intent be implemented. Thus,

in the Interpretation by the NPC Standing Committee

of Article 22.4 and Article 24.2(3) of the Basic Law, the

Standing Committee explained that its object was to

give effect to the legislative intent behind Hong Kong’s

Basic Law: “The original legislative intent elucidated

* Professor DONG Hao, in addition to being Vice President of

ALSCLS, was previously Vice President of Zhuhai Intermediate

People’s Court in Guangdong. He is one of the most respected Chi-

nese scholars on the issue of legal interpretation.

by this Interpretation and the original legislative in-

tent of the other categories of Paragraph 2 in Article

24 of the Basic Law of the Hong Kong Special Admin-

istrative Region have been embodied in the Opinions

on the Implementation of the Second Paragraph of Ar-

ticle 24 of the Basic Law of the Hong Kong Special Ad-

ministrative Region of the People’s Republic of China,

which were adopted at the Fourth Plenary Meeting

of the Preparatory Committee for the Hong Kong Spe-

cial Administrative Region of the National People’s

Congress on August 10, 1996.”"° In other words, in in-

terpreting the meaning of the Basic Law, the NPC

Standing Committee not only looked to the legislative

intent of the Basic Law, but it has even issued its own

directives setting forth this legislative intent and in-

structing others on the need to apply this legislative

intent.

As these authorities make clear, the principle that

“the rule-maker has the authority to interpret the

rule” is firmly established under Chinese law.

GUAN YU “ZHONG HUA REN MIN GONG HE GUO XIANG GANG TE BIE XING

ZHENG QU JI BEN FA” Di 22 TIAO DI 4 KUAN HE Di 24 TIAO DI 2 KUAN DI

(3) XIANG DE JIE SHI [Interpretation by the Standing Committee of

the National People’s Congress of Article 22.4 and Article 24.2(3)

of the Basic Law of the Hong Kong Special Administrative Region

of the People’s Republic of China (“Basic Law”)) (adopted by the

Standing Comm. of the Nat’ People’s Cong., June 26, 1999), http//Awww.

npe.gov.cn/wxzl/gongbao/200 1 -02/06/content_ 5004737 htm (P.R.C.). An

English translation is available at: http//www.npc.gov.cn/englishnpe/

Law/2007-12/12/content_ 1383897 .htm.

Il. The Ministry of Commerce’s Interpretation

of Its Rules is Authoritative

In accordance with the principle of Chinese legal

interpretation that “the rule-maker has the authority

to interpret the rule,” the Ministry of Commerce has

the authority to interpret the 2002 Notice it issued.

The Ministry of Commerce’s interpretive authority

is amply supported by Chinese law. For example, the

Resolution of the Standing Committee of the National

People’s Congress Providing an Improved Interpre-

tation of the Law (1981) not only provides that the

NPC Standing Committee shall exercise the power to

interpret law, it also specifically states that the power

of interpretation also resides in the Supreme People’s

Court, Supreme People’s Procuratorate, the State Coun-

cil and the ministries of the State Council.'' The

"! The Resolution of the Standing Committee of the National

People’s Congress Providing an Improved Interpretation of the

Law of 1981 expressly provides that the State Council and its

ministries shall have power to interpret the laws and decrees (e.g.,

to interpret the legal rules established by the NPC and its Stand-

ing Committee). QUAN GUO REN MIN DAI BIAO DA HUI CHANG WU WE!

YUAN HUI GUAN YU JIA QIANG FA LU JIE SHI GONG ZUO DE JUE YI [Res-

olution of the Standing Committee of the National People’s Con-

gress Providing an Improved Interpretation of the Law) (adopted

by the Standing Comm. of the Nat'l People’s Cong., June 10, 1981),

http//www.npc.gov.cn/wxzl/gongbao/2000- 12/06/content_5004401.htm

(P.R.C.). An English translation is available at: http//www.asianlii.

org/cn/legis/cen/laws/rotecotnpcpaiiot! 1 125/. The conclusion by Pro-

fessor Donald Clarke and Professor Nicholas Howson in their

Brief of Amici Curiae that the Ministry of Commerce has no au-

thority to interpret statutes is wrong. See Clarke & Howson Ami-

cus Br. 19.

Ministry of Commerce is one of the ministries of the

State Council and thus it has specific authorization to

interpret law from the NPC.

The State Council has also issued formal regula-

tions stating that ministries — such as the Ministry of

Commerce — have the authority to interpret adminis-

trative regulations. In particular, the Notice of the

State Council General Office Concerning the Authority

of Interpretation of Administrative Regulations and

Procedural Matters states that both the State Council

and the ministries under the State Council have the

authority to interpret administrative regulations. GUO

WU YUAN BAN GONG TING GUAN YU XING ZHENG FA GUI JIE

SHI QUAN XIAN HE CHENG XU WEN TI DE TONG ZHI [Notice

of the State Council General Office Concerning the Au-

thority of Interpretation of Administrative Regula-

tions and Procedural Matters] (Guo Ban Fa [1999] No.

43) (promulgated by the State Council General Office,

May 10, 1999), http://www.law-lib.com/law/law_view.

asp?id=107706 (P.R.C.). In fact, the reality is that min-

istries (such as the Ministry of Commerce) are the on2s

that actually handle the overwhelming majority of reg-

ulatory interpretation due to their subject-matter ex-

pertise and the massive number of regulations at

issue. The Ministry of Commerce, for its part, has been

constantly and continuously interpreting its own rules

through opinions, notices, provisional rules, response

letters, formal replies, and through other documents.

The principle that “the rule-maker has the author-

ity to interpret the rule” does not necessarily mean

that other authorities are excluded from interpreting

rules. In other words, the authority to interpret rules

is not restricted to a single entity. But the Ministry of

Commerce is unquestionably one of the entities with

authority to interpret the law. The ministries under

the State Council (such as the Ministry of Commerce)

have authority to interpret both laws and regulations,

and in fact do so on a regular basis. Those interpreta-

tions are treated as authoritative, and are deferred to

by courts, procuratorates and administrative bodies.

See infra Part III.

Ill. The Ministry of Commerce’s Interpretation

Remains Authoritative and is Deferred to

by Chinese Courts

The amici Clarke and Howson argue that China’s

system of checks and balances somehow contradicts or

diminishes the authority of the Ministry of Commerce

to interpret its rules.'* Clarke & Howson Amicus Br. 19.

“ Clarke and Howson also argue against the deference af-

forded by the Second Circuit, contending that “(t/he Chinese Gov-

ernment is not a neutral observer,” and “may have a party-like

interest in the case.” Clarke & Howson Amicus Br. 8 (capitaliza-

tion omitted). Yet even though China’s state-owned enterprises

are frequent parties to U.S. litigation, the Ministry of Commerce

has never appeared in U.S. litigation until the present case. The

complete absence of any Ministry of Commerce participation in

past U.S. litigations refutes the claim that the Ministry of Com-

merce is doing so here because “a mercantilist government such

as China’s .. . is going to view siding with its nationals as a policy

imperative,” id. at 10.

To the contrary, the allegation of “partiality . . . in this case,”

id. at 10, is more applicable to those who are repeatedly hired as

expert witnesses in cases involving foreign law, see id. 1-2. The

They argue that the Ministry of Commerce’s regula-

tory interpretations could be deemed invalid if the in-

terpretation somehow violated other laws.'* Id. Yet

Second Circuit’s rule is preferable to U.S. trial courts attempting

to weigh foreign governments’ statements about their own law

against the testimony of partisan expert witnesses. This is espe-

cially true considering that “relatively few judges are experienced

in the area [of foreign law) and the procedures of foreign legal

systems are often poorly understood.” Societe Nationale Industri-

elle Aerospatiale v. U.S. Dist. Court for the S. Dist. of Iowa, 482 U.S.

522, 552 (1987) (Blackmun, J., concurring in part and dissenting

in part).

‘® Clarke and Howson also assert that the Chinese govern-

ment has a “party-like interest in the case” because Hebei Wel-

come Pharmaceutical Co. Ltd. is a subsidiary of a state-owned

enterprise, and is therefore “deemed under the Chinese system to

be a state-owned enterprise.” Clarke & Howson Amicus Br. 8-9.

However, in three previous appearances as an expert witness for

plaintiffs suing Chinese litigants, Clarke has taken contradictory

positions as to whether or not a subsidiary of a state-owned en-

terprise is itself a state-owned enterprise. See Stansell v. BGP.

Inc., 8:09-cv-2501, Dkt. 56 (M.D. Fla. Apr. 29, 2010) (subsidiary of

state-owned enterprise “is not considered ‘state-owned’ under

Chinese corporate law” and is “not [to be] deemed ‘state-owned’”

(emphasis in original)); Ocean Line Holdings Ltd. v. China Nat'l

Chartering Corp., 1:07-cv-08123, Dkt. 28 (S.D.N.Y. Jan. 30, 2008)

(again concluding that the subsidiary of state-owned enterprise

is not “owned by the Chinese state” but rather is owned by the

parent company); Trans Chemical Ltd. v. China Nat'l Machinery

Import and Export Corp., 978 F. Supp. 266 (S.D. Tex. 1997) (con-

cluding that a subsidiary of a state-owned enterprise is itself a

state-owned enterprise). Clarke’s contradictory positions demon-

strate just how distant the connection is between (1) a ministry of

(2) China’s State Council and (3) a subsidiary of (4) a parent com-

pany that is owned by (5) an entity that is controlled by (6) the

government. The Chinese government does not have a “party-like

interest” in every case to which it can be linked through six de-

grees of separation.

they do not provide a single example of any Ministry of

Commerce interpretation of its regulations being in-

validated, and they certainly do not suggest that the

Ministry of Commerce regulations at issue here are in-

valid or even challenged in China. More importantly,

the theoretical possibility of a Ministry of Commerce

interpretation being held invalid does not alter the fact

that the Ministry of Commerce has the clear authority

to interpret its own regulations, consistent with the

principle that “the rule-maker has the authority to in-

terpret the rule,” and contrary to Petitioners’ argu-

ments, see Pet. Br. 42-43.

While courts, procuratorates and other adminis-

trative bodies will inevitably interpret laws while dis-

charging their administrative or judicial functions, the

interpretations by the issuing ministry are treated as

authoritative, and are deferred to by the courts and

other governmental bodies. Indeed, Chinese courts im-

plement the interpretations given by China’s minis-

tries, such as the Ministry of Commerce.

Thus, in the case of Huazhong Bearing Factory

against the Labor Bureau of Binhu District, Wuxi Mu-

nicipality (see App. A),'* the appellate court cited to and

“ HUA ZHONG ZHOU CHENG CHANG BU FU WU XI SHI BIN HU QU

LAO DONG JU SHE HUI BAO ZHANG XING ZHENG QUE REN AN [Huazhong

Bearing Factory v. Labor Bureau of Binhu District, Wuxi Munici-

pality] (Intermediate People’s Court of Wuxi Municipality,

Jiangsu Province (2005) Xi Xing Zhong Zi No. 50, Oct. 31, 2005).

This case was included in China’s Key Trial Cases Abstract — Ad-

ministrative Trial Case Volume, which was compiled in 2007 in a

joint project by the National Judges College and Renmin Univer-

sity Law School (China Renmin University Press and People’s

applied the interpretation given by the government

ministries without conducting its own analysis:

According to the Ministry of Labor and Social

Security’s regulation entitled “Response Let-

ter Regarding the Interpretation of the

Phrase ‘Willful Violation of Rules’ Within the

‘Trial Measures on Work-Related Injury In-

surance for Enterprise Employees,’” the term

“willful violation of rules” refers specifically to

malicious acts undertaken with a conscious

motive and purpose. The phrase should not

apply to ordinary violations of rules. JIANG

Yonglin did not intend for the injury to oc-

cur.... Therefore, it meets the criteria for

work-related injuries.

App. A at 16-17. In reaching its decision as to the

proper interpretation of a disputed phrase, the court

followed the interpretation given by a ministry imme-

diately under the State Council. See id.

Chinese courts are obligated to defer to ministry

interpretations for the public policy reason that a min-

istry under the State Council is responsible for regu-

lating matters within its field, and is therefore in a

better position to address specialized issues and policy

issues in that domain. Foreign trade is a sector that

Court Press, 2008. P323). At the time this case was collected as a

“Key Trial Case,” China had not yet created a generally accessible

database of cases, and so this case was one of a select few chosen

as exemplars. China’s Key Trial Cases Abstract was created and

published in part by the National Judges College, which is affiliated

with China’s Supreme People’s Court. A certified English transla-

tion is included at App. A.

requires strong specialized knowledge and policy ex-

pertise, and so courts will be compelled to defer to

the guidance of the responsible ministry. In the case

of Tianjin Yuyou Enterprise Co., Ltd. against Tianjin

Economic and Technological Development Area Ad-

ministrative Committee (see App. B),” a contentious

question was whether the Provisional Regulations on

the Administration of Voluntary Quotas for Export

Products promulgated by MOFTEC [the former name

for MOFCOM, i.e., the Ministry of Commerce] in April

1995 was binding upon export license applications that

had been made prior to the implementation of the new

regulations. See id. Neither the Tianjin Higher People’s

Court nor the Supreme People’s Court conducted any

substantive review of MOFTEC’s interpretation. See

id. Rather they deferred to MOFTEC’s interpretation

and applied that interpretation to the case. See id.

Thus, contrary to Petitioners’ and Clarke and How-

son’s amicus arguments, the Ministry of Commerce’s

interpretations have already been treated as binding

by China’s Supreme People’s Court.

CONCLUSION

For the foregoing reasons, Petitioners’ questioning

of the Ministry of Commerce’s “law-interpreting power”

is without merit. See Pet. Br. 42-43; see also Clarke &

JI SHU KAI FA QU GUAN LI WEI YUAN HUI XING ZHENG JIU FEN ER SHEN

AN [Tianjin Yuyou Enterprise Co., Ltd. v. Tianjin Economic and

Technological Development Area Administrative Committee] (Su-

preme People’s Court (1997) Xing Zhong Zi No. 21, July 3, 1998).

Howson Amicus Br. 17. Under China’s system of legal

interpretation, the rule-maker has the power to inter-

pret the rules it makes. This is known as the doctrine

of “the rule-maker has the authority to interpret the

rule.” This doctrine is rooted in Chinese legal theory,

expressed in Chinese laws and regulations, recognized

by Chinese courts, and specifically extends to the Min-

istry of Commerce’s interpretative authority over the

2002 Notice it created and that is at issue in this suit.

Respectfully submitted,

TIMOTHY J. DROSKE

Counsel of Record

Dorsey & WHITNEY LLP

50 South Sixth Street

Suite 1500

Minneapolis, Minnesota 55402

Telephone: (612) 340-2600

droske.tim@dorsey.com

GEOFFREY SANT

NATHANIEL H. AKERMAN

LANIER SAPERSTEIN

JEREMY A. SCHLOSSER

MICHELLE NG

CAROL LEE

DorseEY & WHITNEY LLP

51 West 52nd Street

New York, New York 10019

Telephone: (212) 415-6119

sant.geoffrey@dorsey.com

akerman.nick@dorsey.com

saperstein.lanier@dorsey.com

schlosser.jeremy@dorsey.com

ng.michelle@dorsey.com

lee.carol@dorsey.com

April 4, 2018

Srrur (Ray) Liu

Dorsey & WHITNEY LLP

Twin Towers (West)

Suite 1101A

B12 Jianguomenwai Avenue

Chaoyang District, Beijing 100022

Telephone: +86 (10) 8513-5900

liu.ray@dorsey.com

Counsel for Amici Curiae

YING Songnian, MA Huaide,

JIANG Ming’an, YU An, YANG

Jianshun, and LI Honglei

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