【Case Study】
Zhang Guimei et al.v.General Electric Co.et al.1
At twenty past eight on November 21,2004,MU5210 flight fell into Nanhai Park of Baotou City,Inner Mongolia,not more than one minute after takeoff and all 47 passengers and 6 flight crew died,in addition to two men on the ground,leaving endless sorrow and a long and difficult claim road to the families of the victims.
One week after the accident,China Eastern announced a victims compensation package totaling 211,000 yuan (US$ 27,400) per person.But most of the victims’ relatives complained about the low payout and what they said was a lack of transparency during deliberations leading to the settlement.Although it is utterly inadequate,many families of the victims had to accept it due to the heavy difficulty of the claim,and they were not entitled to more compensation under Chinese domestic law.
On March 4,2005,the victims’ relatives filed an administrative action against China Civil Aviation Administration (CAAC) on the ground that the latter failed to release the accident- investigation report which had been finished already.They argued that,CAAC has the legal obligation to disclose the investigation report; therefore,CAAC’s refusal of disclosure constituted “administrative inaction”.Nevertheless,their pleadings were turned down immediately by the court on the ground that the claim fell out of the administrative litigation.Dissatisfied with this ruling,the victims’ relatives appealed before the Higher People’s Court of Beijing which rejected their appeal again.
Under such a circumstance,a group of relatives decided to seek higher compensation by filing a lawsuit in the United State several months later.On August 17,2005,they went to California,where a “long-arm statute” lets courts accept cases from outside the United States.What should be noted is that in California,the average compensation for every victim of the air crash is 1.5 million dollars,in addition to the punitive compensation as may be imposed,which is much more than the compensations the victims has gained in China.Moreover,some plaintiffs said they filed the suit in the United States not only to seek higher compensation but also to force a full disclosure of the reasons for the accident.They argued that China Eastern would have to provide thorough evidence to a court across the Pacific,where the law would not allow a cover-up of crash facts.
Relatives of the crash victims filed separate suits against China Eastern Airlines Co.Ltd(CEA)—a commercial airline incorporated in China,with its principal place of business in Shanghai which had acquired China Eastern Yunnan Airlines’ assets—and the manufacturers of the plane and of the plane’s engines in the Los Angeles Superior Court.Bombardier Inc.,a Canadian corporation with its principal place of business in Montreal,designed,manufactured,assembled and tested the plane in Canada and sold it to the China Aviation Supplies Import and Export Corporation in Quebec in 2002.
The airplane was powered by two engines designed and manufactured by General Electric Co.,which is incorporated in New York and has its principal place of business in Fairfield,Conn.The four cases were consolidated.Attorney Hao Junbo,a plaintiffs’ lawyer with Beijing-based Lehman,Lee & Xu,said that Bombardier and GE were sued in the theory of negligence,product strict liability.The reason why China Eastern Airline became the defendant was that China Eastern Airline was the carrier of this flight and it could not preclude the possibility of the negligence in its management,operation and flying of the aircraft.
On November 21,2005,Los Angeles court supported the plaintiffs’ claim and ruled that the case should be heard by it under California long-arm statutes.In November 2006,both sides entered court-ordered mediation.It was reported that the two sides reached a preliminary agreement for a settlement of more than $17 million.But China Eastern later insisted that no agreement had been reached,and On February 24,2006,moved to dismiss or stay the action on the basis that California was not a convenient forum for the trial of the actions,and China provided an adequate alternative forum for trial.In other words,the China Eastern Airline proposed a motion to the Los Angeles Court and required the court to transfer the case to the Chinese court with the reason of forum non conveniens.The other defendants joined in the motion.The motion was approved.In its decision of February 26,2007,Div.Seven affirmed Los Angeles Superior Court Judge James C.Chalfant’s order staying the consolidated claims by relatives of the crash victims on the ground of forum non conveniens.
As part of their motion,CEA made a commitment that,if the motion were granted,it would (1) not contest liability in the four actions in the Chinese courts; (2) completely compensate the plaintiffs in accordance with Chinese law and not seek to enforce limitations on wrongful death damages; (3) waive any applicable statutes of limitations so long as the actions were refiled in China within six months of the dismissal or stay; (4) be bound by and satisfy any judgment in the Chinese court following any appropriate appeals.(https://www.daowen.com)
GE,Bombardier and Bombardier Aerospace similarly agreed they would (1) submit to personal jurisdiction in China; (2) waive any applicable statutes of limitations so long as the actions were refiled in China within six months of the dismissal or stay; (3) accept service of process; (4) comply with discovery orders; and (5) satisfy any final judgment in the Chinese court.
Based on the ruling of Los Angeles Superior Court,the attorneys for plaintiffs filed an action before Beijing Second Intermediate People’s Court on November 22,2007,alleging the defendant to compensate completely which amounts to more than $17 million.In the meantime,the plaintiff asked CAAC and CEA to publish the investigation report in time.Nevertheless,Beijing Second Intermediate People’s Court refused to accept any materials that the plaintiffs submitted without any explanations.In June 2008,the attorneys for plaintiffs resubmitted their claims to this Court which turned down their action for the second time.The attorneys for plaintiffs,then,went to Shanghai,filing an action before Shanghai First Intermediate People’s Court.But their endeavors failed again.
Helplessly,the plaintiffs went back to the U.S.for remedy.In February 2009,the California Court of Appeal held hearings,and in March the Court reaffirmed that it was more convenient for Chinese court to exercise jurisdiction over the case,in the meantime it expressed unambiguously its concern for Chinese courts’ refusal to provide remedy for the plaintiffs so far and stressed that it may exercise the jurisdiction if the access to Chinese forum is proved to be unavailable for the plaintiffs ultimately.
Under this circumstance,the attorneys for plaintiffs refiled before Beijing Second Intermediate People’s Court on March 16,2009.The Court showed a different attitude this time which not only accepted the materials submitted but also agreed to make a decision on whether it would accept the case soon.On August 10,2009,the Court rendered a decision to accept the case formally; however,no progress had been be made for a long period.Mr.Hao,the plaintiffs’ lawyer implied,in August,2010,that if the trial of the case was postponed indefinitely,he would advise the plaintiffs to go back to the Court in California,the United States.
The case marks a watershed for Chinese lawyers and Chinese legal system.This is the first time in the history that the family of the victims of an air crash that happened in China chose to sue in America.
In this case,the plaintiffs’ lawyers were acutely aware of the California long-arm statutes which provide the legal basis for them to sue in the United States.By proceeding against the manufactures of the airplane on a product liability theory and against the carrier of this flight,i.e,China Eastern Airline,on negligence,they not only circumvented the monetary limitation on recovery that Chinese domestic law imposes,but also gained several strategic advantages.Their cases could now be tried by American courts which enjoy the reputation of impartiality and neutrality,and the American pre-trial discovery rules afforded them a potent device,unmatched by the Chinese law.Moreover,Los Angles juries have a reputation for awarding damages that exceed many times those recovered abroad.
However,the defendants proposed a motion to the Los Angeles Court and required the court to transfer the case to the Chinese court with the reason of forum non conveniens which was granted by the Court.The case then was sent back to China dramatically.
From the development of this case so far,we find that both the litigants and the American courts concerned are experienced in dealing with complicated private international law disputes; Nonetheless,the Chinese courts are rather inexperienced.The maneuverable resource by the parties to various American legal rules such as long arm statues and forum non conveniens is a vivid contrast to the Chinese courts’ indecision and helplessness.As a matter of fact,the refusal by the Chinese courts to give any definite answer indicates that judges in the People’s Courts are not ready and lack the quality,experience,and knowledge to handle complicated private international law cases,particularly when foreign law and foreign jurisdiction are at issue.
The case came to an end in 2013 through mediation in court.However,because the parties concluded a confidentiality agreement,the damages that the plaintiffs have obtained are not known to the public.