Guiding Case No. 88 (Discussed and Passed by the Adjudication Committee of the Supreme People s Court Released on November 15, 2017)
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1 ZHANG Daowen, TAO Ren, et al. v. The People s Government of Jianyang Municipality, Sichuan Province, A Case of Infringing Upon the Right to Operate Manpower Passenger Tricycle Businesses Guiding Case No. 88 (Discussed and Passed by the Adjudication Committee of the Supreme People s Court Released on November 15, 2017) CHINA GUIDING CASES PROJECT English Guiding Case (EGC88) January 22, 2018 Edition The citation of this translation of this Guiding Case is: 张道文 陶仁等诉四川省简阳市人民政府侵犯客运人力三轮车经营权案 (ZHANG Daowen, TAO Ren, et al. v. The People s Government of Jianyang Municipality, Sichuan Province, A Case of Infringing Upon the Right to Operate Manpower Passenger Tricycle Businesses), STANFORD LAW SCHOOL CHINA GUIDING CASES PROJECT, English Guiding Case (EGC88), Jan. 22, 2018 Edition, The original, Chinese version of this case is available at 最高人民法院网 ( See also 最高人民法院关于发布第 17 批指导性案例的通知 (The Supreme People s Court s Notice Concerning the Release of the 17 th Batch of Guiding Cases), issued on and effective as of Nov. 15, 2017, This document was primarily prepared by Dr. Mei Gechlik, with research support from CHEN Yi and Zihao Zhou; it was finalized by Seán Connolly, Dimitri Phillips, and Dr. Mei Gechlik. Minor editing, such as splitting long paragraphs, adding a few words included in square brackets, and boldfacing the headings, was done to make the piece more comprehensible to readers; all footnotes, unless otherwise noted, have been added by the China Guiding Cases Project. The following text is otherwise a direct translation of the original text released by the Supreme People s Court.
2 Keywords Administrative Administrative Licensing Term Obligation to Inform Administrative Procedures Confirm Judgment [Confirming an Administrative Act as] Illegal Main Points of the Adjudication 1. For an administrative license that has a statutory term, when an administrative organ carries out administrative licensing, [it] should inform [the administrative counterparty] of the term of the administrative license clearly, and[, in fact,] the administrative counterparty 1 has the right to know the term of the administrative license. 2. Where an administrative counterparty asserts that an administrative license has no term limits merely on the ground that the administrative organ did not inform [the administrative counterparty] of the term, a people s court shall not support the assertion. 3. Where an administrative organ does not inform [the administrative counterparty] of the term [of a license] when administrative licensing is carried out and, afterwards, terminates the rights and benefits of the administrative license [enjoyed by] the administrative counterparty on the ground that the term has expired, this is a type of violation of administrative procedures and a people s court should, in accordance with law, decide to revoke the challenged administrative act. However, if the decision to revoke the challenged administrative act will bring manifestly adverse effects to the social and public interests and the order of administrative management, the people s court should decide to confirm that the challenged administrative act is in violation of law. Related Legal Rule(s) Article 89 Paragraph 1 Item 2 of the Administrative Litigation Law of the People s Republic of China 2 1 In China s administrative law, the term administrative counterparty ( 行政相对人 ) refers to any individual or organization whose rights and interests are affected by an administrative act. See, e.g., 方世荣 (FANG Shirong), 论行政相对人 (ON ADMINISTRATIVE COUNTERPARTIES), ( 中国政法大学出版社 2000 年版 ) (China University of Law and Political Science Press, 2000). 2 中华人民共和国行政诉讼法 (Administrative Litigation Law of the People s Republic of China), passed and issued on Apr. 4, 1989, effective as of Oct. 1, 1990, amended two times, most recently on June 27, 2017, effective as of July 1, 2017,
3 Basic Facts of the Case On December 12, 1994, the People s Government of Jianyang Municipality, Sichuan Province (hereinafter referred to as the Jianyang Municipal Government ), implemented, in the form of a notice, quota administration of manpower passenger tricycles which were within the scope of the municipality. In August 1996, the Jianyang Municipal Government collected from each business operator who remodeled old manpower passenger vehicles to manpower passenger tricycles (240 units) a fee of RMB 3,500 paid for the [commercial] use [of the tricycles]. In November 1996, the Jianyang Municipal Government collected from each business operator of 161 preexisting manpower passenger tricycles a fee of RMB 2,000 paid for the [commercial] use [of the tricycles]. In November 1996, the Jianyang Municipal Government began to implement a paid-use 3 [system] for the right to operate [manpower passenger tricycle] businesses, and[, accordingly,] relevant departments collected related fees from [the business operators of] the 401 manpower passenger tricycles that were subject to the quota. On July 15 and July 28, 1999, the Jianyang Municipal Government issued a Notice on Rectifying the Order of Operating Small Vehicle Businesses in Urban Areas (hereinafter referred to as the Notice ) 4 and a Supplementary Notice on Rectifying the Order of Operating Small Vehicle Businesses in Urban Areas (hereinafter referred to as the Supplementary Notice ), 5 [respectively,] targeting those manpower passenger tricycles whose two-year terms of paid-use had already expired. The Notice required that those business operators of manpower passenger tricycles who have already had legal licenses must re-register at the office of the Municipal Traffic Police Brigade between July 19 and July 20, The Supplementary Notice required that those registrants who, after review, obtain the right to operate [small vehicle] businesses pay a standard fee of RMB 8,000 per vehicle (in line with the standard fee of RMB 7,200 per vehicle provided for in Article 6 of the Notice) 6 for the paid-use of the right to operate the [small vehicle] businesses. One hundred and eighty-two business operators of manpower passenger tricycles, including ZHANG Daowen and TAO Ren, believed that the provisions of Article 6 of the Notice and Article 2 of the Supplementary Notice, [both of which] were issued by the Jianyang Municipal Government, led to duplicate charging of fees and infringed upon their legal rights to operate [manpower passenger tricycle] businesses. They brought an administrative lawsuit in the People s 3 The term paid-use refers to a system, further explained below, in which people pay the government for the right to operate businesses. 4 The original text reads 关于整顿城区小型车辆营运秩序的公告. This document has not been found and may have been excluded from publication. 5 The original text reads 关于整顿城区小型车辆营运秩序的补充公告. This document has not been found and may have been excluded from publication. 6 It is not clear why charging a fee of RMB 8,000 per vehicle could be considered to be in line with the requirement of charging a fee of RMB 7,200 per vehicle.
4 Court of Jianyang Municipality, Sichuan Province, demanding [that the court] decide to revoke the above-mentioned Notice and Supplementary Notice issued by the Jianyang Municipal Government. Results of the Adjudication On November 9, 1999, by the (1999) Jian Yang Xing Chu Zi No. 36 Judgment, the People s Court of Jianyang Municipality, Sichuan Province, upheld, in accordance with Article 54 Item 1 of the Administrative Litigation Law of the People s Republic of China, 7 the administrative acts carried out by the [Jianyang] Municipal Government on July 15, 1999, and July 28, Unconvinced, ZHANG Daowen, TAO Ren, et al. appealed. On March 2, 2000, by the (2000) Zi Xing Zhong Zi No. 6 Administrative Judgment, the Intermediate People s Court of Ziyang Area, Sichuan Province, rejected the appeal and upheld the original judgment. On June 13, 2001, by the (2001) Chuan Xing Jian Zi No. 1 Administrative Ruling, the Higher People s Court of Sichuan Province ordered the Intermediate People s Court of Ziyang Municipality (formerly, Ziyang Area), 8 Sichuan Province, to carry out a retrial. On November 3, 2001, by the (2001) Zi Xing Zai Zhong Zi No. 1 Judgment, the Intermediate People s Court of Ziyang Municipality, Sichuan Province, revoked the original first-instance and second-instance judgments and rejected the litigation requests of the plaintiffs of the first-instance adjudication. Unconvinced, ZHANG Daowen, TAO Ren, et al. petitioned the Higher People s Court of Sichuan Province. On July 11, 2002, the Higher People s Court of Sichuan Province rendered the (2002) Chuan Xing Jian Zi No. 4 Notice to Reject an Application for a Retrial. Unconvinced, ZHANG Daowen, TAO Ren, et al. applied to the Supreme People s Court for a retrial. On March 23, 2016, the Supreme People s Court ruled to bring the case up [to the Supreme People s Court] for adjudication. 9 On May 3, 2017, the Supreme People s Court rendered the (2016) Zui Gao Fa Xing Zai No. 81 Administrative Judgment: 10 7 The law cited should be the version effective at the time, that is, 中华人民共和国行政诉讼法 (Administrative Litigation Law of the People s Republic of China), passed and issued on Apr. 4, 1989, effective as of Oct. 1, 1990, 8 In a reply issued on June 14, 2000, the State Council agreed to revoke Ziyang Area and county-level Ziyang Municipality to establish prefecture-level Ziyang Municpality. See 国务院关于同意四川省撤销资阳地区设立地级资阳市的批复 (Reply of the State Council on Agreeing with Sichuan Province to Revoke Ziyang Area and Establish Prefecture-Level Ziyang Municipality), issued on and effective as of June 14, 2000, 9 The expression in the original text, 提审 ( bring [a case] up [to an upper-level court] for adjudication ), refers to Article 13 Paragraph 2 of the Organic Law of the People s Courts of the People s Republic of China: if the Supreme People s Court finds an error in a judgment or ruling rendered by a lower-level court and the judgment or ruling has already come into effect, the Supreme People s Court has the authority to adjudicate the case itself or to direct the lower-level court to conduct a retrial. See 中华人民共和国人民法院组织法 (Organic Law of the People s Courts of the People s Republic of China), passed on July 1, 1979, issued on July 5, 1979, effective as of Jan. 1, 1980, amended three times, most recently on Oct. 31, 2006, effective as of July 1, 2007, 10 See 张道文 陶仁民政行政管理( 民政 ) 再审行政判决书 (ZHANG Daowen and TAO Ren, The Adminstrative Judgment of a Civil Administration (Civil Affairs) Retrial) (2016) 最高法行再 81 号行政判决
5 (1) [the court] revokes the (2001) Zi Xing Zai Zhong Zi No. 1 Judgment [rendered by] the Intermediate People s Court of Ziyang Municipality, Sichuan Province. (2) [the court] confirms that the Notice on Rectifying the Order of Operating Small Vehicle Businesses in Urban Areas and the Supplementary Notice on Rectifying the Order of Operating Small Vehicle Businesses in Urban Areas, both of which were issued by the People s Government of Jianyang Municipality, Sichuan Province, are in violation of law. Reasons for the Adjudication The Supreme People s Court opined that this case involved the following three major issues: On the issue of the legality of the challenged administrative act. Looking at the application of law, Article 4 of the Regulation of Sichuan Province on the Administration of Road Transportation provided[, inter alia]: 11 Transport administrative departments at all levels are [ ] responsible for the adjustment of the types of commercial vehicles within their respective administrative regions and the quantities [of these vehicles] to be put in place [ ]. Article 24 [of the same regulation] provided[, inter alia]: The paid-use of the rights to operate passenger transportation businesses may be implemented after it is approved by a people s government above the county level. Article 8 of the Provisions of Sichuan Province on the Administration of Small Passenger Vehicles (Chuan Jiao Yun 1994 No. 359), 12 which was formulated by the Department of Transport of Sichuan Province, 13 provided: When implementing the quota administration of small passenger vehicles, transport administrative departments of all municipalities, areas, and prefectures may, with ((2016) Zui Gao Fa Xing Zai No. 81 Administrative Judgment), rendered by the Supreme People s Court on May 3, 2017, full text available on the Stanford Law School China Guiding Cases Project s website, at 11 四川省道路运输管理条例 (Regulation of Sichuan Province on the Administration of Road Transportation), passed and issued by the Standing Committee of the People s Congress of Sichuan Province on Apr. 16, 1996, effective as of July 1, 1996, /2002/0625/45150.html. The Regulation is no longer in effect. 12 The original text is 四川省小型车辆客运管理规定. This document has not been found and may have been excluded from publication. Past tense is used here beause it is not clear whether the provisions are still in effect. 13 The name 交通厅 is translated here as the Department of Transport in accordance with the translation used on the website of the People s Government of Sichuan Province, at
6 approval from [their] local government, adopt the method of [having business operators] pay for the use of business operation certificates, but the term of paid-use [of the certificates] shall not exceed two years at a time. It could[, therefore,] be seen that a local regulation of Sichuan Province had explicitly provided for the implementation of the paid-use of the rights to operate passenger transportation businesses. Although the regulatory document formulated by the Department of Transport of Sichuan Province preceded the local regulation, the regulatory document did not conflict with the local regulation with respect to the implementation of the term-based paid-use of the business operation certificates. Based on the needs of administrative law enforcement and administrative management, it was necessary to set a certain term for the rights to operate passenger transportation businesses. Looking at the challenged administrative procedures, the procedures were manifestly improper. The substance of the challenged administrative act was a measure to re-register those business operators of manpower passenger tricycles who already had legal licenses, to have those who passed a review pay the fees for the paid-use [of the right to operate the businesses], and to [treat] those who did not register after the expiry of the [registration] period as having automatically given up their right. The challenged act was to collect from those business operators of manpower passenger tricycles who had already obtained legal licenses the fees for the paid-use [of the right to operate the businesses]; the rights of the aforementioned business operators of manpower passenger tricycles were obtained in 1996 through the licensing of the right to operate the businesses. There existed a relationship of succession and connection between the two administrative acts. With respect to the 1996 act of licensing the right to operate [manpower passenger tricycle] businesses, when an administrative organ carries out an administrative act that offers benefits, including administrative licensing, it should inform [the administrative counterparty] of the term of the administrative license clearly. When an administrative organ carries out administrative licensing, the administrative counterparty also has the right to know the term of the administrative license. When the administrative organ, in 1996, carried out licensing of the right to operate manpower passenger tricycle businesses, [it] did not inform ZHANG Daowen, TAO Ren, et al. of the two-year term of the paid-use of the right to operate manpower passenger tricycle businesses. ZHANG Daowen, TAO Ren, et al. did not know the term of the paid-use of the right to operate their businesses. The Jianyang Municipal Government s 1996 licensing of the right to operate [manpower passenger tricycle] businesses involved manifestly improper procedures. This directly caused the manifestly improper procedures of this case s challenged administrative act, which was related in succession [with the 1996 licensing]. On the issue of the term of the right to operate manpower passenger tricycle businesses. The applicants asserted that because, in 1996, when the Jianyang Municipal Government carried out the licensing of the right to operate manpower passenger tricycle businesses, it did not inform
7 [them] of the term of the licenses, they therefore believed that their business operation licenses were for an unlimited term. The Supreme People s Court opined that the purpose of the Jianyang Municipal Government in carrying out licensing of the right to operate manpower passenger tricycle businesses was to regulate the order of operating manpower passenger tricycle businesses. Manpower passenger tricycle [businesses] involve the allocation of public resources for public interests, and therefore, it is necessary to set a certain term. Objectively, the Provisions of Sichuan Province on the Administration of Small Passenger Vehicles (Chuan Jiao Yun 1994 No. 359) formulated by the Department of Transport of Sichuan Province also clearly provided the terms of the licenses. There were procedural flaws in the Jianyang Municipal Government s failure to inform [the applicants] of the terms of their licenses. However, the applicants merely relied on these [flaws] to argue that the administrative licenses had no term limits. The Supreme People s Court did not support [this argument]. On the issue of [the fact that] ZHANG Daowen, TAO Ren, et al. actually enjoyed the Beneficial to Citizens policies. Based on the problems that actually existed in the locality, including seriously overused roads, serious air and noise pollution, [the locality] being dirty, chaotic, and poor and crowded, congested, and narrow, the Jianyang Municipal Government carried out an overhaul [of the transportation system]. This was in line with the needs of urban administration and the wishes of the people, and thus its legitimacy should be affirmed. In order to handle the letters and visits 14 resulting from the lawsuits of this case, the Jianyang Municipal Government had successively taken two Beneficial to Citizens actions, making positive efforts to substantively resolve the dispute in this case, and these follow-up acts should also be affirmed. The court confirmed the fact that ZHANG Daowen, TAO Ren, et al. had accepted and been committed to a transportation capacity configuration plan to withdraw from their business operations. However, when making an administrative act, an administrative organ must abide by the principle of administering in accordance with law and ensure that administrative authority is exercised in accordance with statutory procedures. The Supreme People s Court opined that in the issuance of the Notice and the Supplementary Notice by the Jianyang Municipal Government, there were flaws in administrative procedures and [the procedures] were manifestly improper. Nevertheless, [the court] took into 14 中华人民共和国信访条例 (Regulation of the People s Republic of China on Letters and Visits), passed by the State Council on Jan. 5, 2005, issued on Jan. 10, 2005, effective as of May 1, 2005, Article 2 of the Regulation provides that the term letters and visits as used in the Regulation refers to activities [carried out] by a citizen, legal person, or other organization by using letters, electronic messages, fax, telephones, visits, or other forms to reflect situations [of certain problems], submit proposals and opinions, or lodge complaints to the people s governments at all levels or working departments of the people s governments at or above the county level and [these activities] are dealt with, in accordance with law, by relevant administrative organs. ( 公民 法人或者其他组织采用书信 电子邮件 传真 电话 走访等形式, 向各级人民政府 县级以上人民政府工作部门反映情况, 提出建议 意见或者投诉请求, 依法由有关行政机关处理的活动.)
8 account [the fact that] after the challenged administrative act of this case was carried out, the traffic order in the urban area of Jianyang Municipality had improved, the transportation capacity of the urban roads had increased, and the appearance of the urban areas had continued to improve, as well as the fact that the vast majority of the original 401 tricycles had been replaced, in batches, through the two Beneficial to Citizens actions. If [the court] decided to revoke the challenged administrative act, this would bring manifestly adverse effects to the order of administrative management and social and public interests. The Supreme People s Court confirmed, in accordance with the [types of] decision provided for in Article 58 of the Interpretation of the Supreme People s Court on Several Issues Concerning the Enforcement of the Administrative Litigation Law of the People s Republic of China, 15 that the challenged administrative act was in violation of law. (Adjudication personnel of the effective judgment: LIANG Fengyun, WANG Haifeng, and TONG Lei) 15 最高人民法院关于执行 中华人民共和国行政诉讼法 若干问题的解释 (Interpretation of the Supreme People s Court on Several Issues Concerning the Enforcement of the Administrative Litigation Law of the People s Republic of China ), passed by the Adjudication Committee of the Supreme People s Court on Nov. 24, 1999, issued on Mar. 8, 2000, effective as of Mar. 10, 2000,
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