Analysis of the First National Case of Consumer Rights Infringement Involving Void Numbers in Prize-Linked Sales
[5] I. Case Background
In January 2001, Shenzhen Tianhong Shopping Mall Co., Ltd. launched a promotional sales event titled "Endless Sincerity, Buick Welcomes the Spring," which stipulated that any customer making a purchase of 200 yuan or more would receive one lottery ticket, with the top prize being "lifetime right to use a Buick." On January 20, Mr. Zhang Junyang came to the company's Shennan branch and made a purchase of 344 yuan, receiving one lottery ticket. On January 29, the day the drawing was held, Mr. Zhang went to the mall with his ticket to claim the prize, but the service desk attendant discovered that the ticket number on Mr. Zhang's lottery ticket was blank, making it impossible to redeem the prize. As a result, a dispute arose between the two parties. After multiple rounds of negotiation and mediation failed, Mr. Zhang, with no other recourse, entrusted our Guangdong Zhiming Law Firm on February 21 to file a civil tort lawsuit against the mall in court, claiming compensation for direct and indirect losses totaling RMB 100,000 (the claim amount consisted of three parts: ① one year's usage fee [rental] for a Buick sedan: based on the rental rate of similar vehicle models in Shenzhen's car rental industry at RMB 7,800/month, the one-year rental would be 7,800 × 12 = RMB 93,600; ② attorney's case-handling fees: RMB 2,000; ③ the plaintiff's lost wages, transportation expenses, and other losses incurred as a result: RMB 4,400; the total of the above three items came to RMB 100,000). This matter drew widespread attention from media outlets across the country, particularly the interviews and reports by CCTV's "Legal Report" (Jin Ri Shuo Fa) and "Life" (Sheng Huo) programs. Although Mr. Zhang won the case in the second-instance judgment, he remains dissatisfied with the ruling and is currently pursuing a retrial.
2. Dispute Controversy
Mr. Zhang's main arguments: If a shopping mall promises prize-based sales during a promotional period, it should deliver complete and valid lottery tickets with all requisite elements and guarantee consumers the right to redeem the prizes. Now, due to the mall's negligence or intentional fraud, he has not only spent money on purchases but also lost the opportunity to win, which seriously infringes upon his legitimate economic rights and interests.
The department store’s main arguments: 1. This case involves a contractual relationship; Mr. Zhang should have borne the duty of verification, yet he failed to fulfill that duty and should bear corresponding liability; 2. The "chance to win" the Buick did not exist, because the prize-claim number was generated by drawing; whether the number actually existed in reality did not affect the generation of the winning number, and the winning number was in fact redeemed; 3. There is no legal basis for determining the value of the "chance to win" the Buick, and the lottery ticket itself had no face value.
Opinions of certain lawyers: 1. This case should be filed as a contract dispute, under which claims for compensation may be made pursuant to the breach-of-contract provisions of the Contract Law, rather than filing a lawsuit for damages based on civil tort; 2. The "opportunity to win a prize" in this case is not directly provided for by law and therefore cannot be recognized.
III. Judgment
On April 12, 2001, the People's Court of Futian District, Shenzhen, held in the first instance that the prize sales activity organized by the defendant constituted an act of unfair competition. The lottery tickets distributed by the defendant had no face value, and both the grand prize and the lucky prize in this prize sales activity were drawn by number, and the two grand prize winners and twelve lucky prize winners had already claimed their prizes. Therefore, the plaintiff's claim for compensation of 100,000 yuan calculated by reference to the winning of the grand prize lacked factual and legal basis, and the court did not support it. In view of the fact that the defendant did not provide the complete lottery tickets to the plaintiff and bore certain fault in causing the dispute, the defendant should appropriately bear part of the case acceptance fee. Accordingly, the court rejected all of Mr. Zhang's claims in accordance with the law. Mr. Zhang refused to accept the judgment and appealed to the Shenzhen Intermediate People's Court on April 26, 2001. The Shenzhen Intermediate People's Court rendered its final judgment on June 28, 2001, holding that: the appellee, Shenzhen Tianhong Shopping Mall Co., Ltd., organized the prize sales activity and announced to customers in the form of a public notice the distribution of lottery tickets, the drawing method, the setting of prizes, and the prize redemption time, and such conduct constituted a service commitment to the general customers. When a customer's purchase reached 200 yuan, Shenzhen Tianhong Shopping Mall Co., Ltd. and its subordinate shopping malls should distribute lottery tickets as agreed and ensure that customers holding lottery tickets obtained equal opportunities to draw. In this case, after the appellant, Zhang Junyang, made a purchase at Shennan Shopping Mall, a subordinate of the appellee Shenzhen Tianhong Shopping Mall Co., Ltd., he should have received one lottery ticket as agreed. However, when the shopping mall distributed the lottery ticket, it provided the appellant with a blank-numbered lottery ticket, causing the appellant to actually lose the opportunity to win. The failure of the two appellees to perform the ancillary obligations under the sales contract infringed upon the appellant's right to the opportunity to win, which he should have obtained. The right to the opportunity to win cannot be equated with the citizens' property right protected by the General Principles of the Civil Law of the People's Republic of China, and the law has no specific provisions for the situation in this case. However, in view of the fact that the two appellees' conduct was indeed faulty, and the appellant's loss caused by the loss of the opportunity to win was objectively difficult to prove and calculate, the court, taking into account the appellant's probability of winning, the total amount of prizes established by the appellees, and the facts of the whole case, and proceeding from the principle of fairness, determined the compensation liability of the appellees as appropriate. The facts found by the court of first instance were clear, but the application of law and the handling were somewhat improper. Pursuant to Item 2 and Item 3 of Paragraph 1 of Article 153 of the Civil Procedure Law of the People's Republic of China and Article 4 of the General Principles of the Civil Law of the People's Republic of China, the judgment is as follows: 1. The civil judgment (Shen Fu Fa Min Chu Zi No. 810) of the People's Court of Futian District, Shenzhen, is reversed; 2. The two appellees, Shenzhen Tianhong Shopping Mall Co., Ltd., Shennan Shopping Mall, and Shenzhen Tianhong Shopping Mall Co., Ltd., shall jointly compensate the appellant, Zhang Junyang, RMB 200 yuan; 3. The acceptance fees of RMB 200 yuan for the first and second instance shall be borne by the appellant, Zhang Junyang, in the amount of 100 yuan, and by the two appellees, each in the amount of 50 yuan.
IV. Attorney's Arguments
(I) Erroneous Views of the Commercial Sector and Certain Lawyers:
1. They believe that this case should be litigated as a contract dispute or falls under contract dispute litigation—such a view is, in light of the circumstances of this case, inconsistent, inappropriate, or erroneous. There is no denying that, as this is the first consumer infringement case in China involving blank lottery numbers with no precedent, it is indeed difficult to find clear and specific statutory provisions to pursue civil tort liability. That said, this does not prevent us from finding relatively specific and sufficient grounds under express provisions such as the General Principles of the Civil Law and the Law on the Protection of Consumer Rights and Interests. In this case, where both contract litigation and tort litigation are available as competing claims, and pursuant to the option provided under Article 122 of the Contract Law, we decided after careful deliberation to commence proceedings in tort based on the following sound reasons: We believe that if this were treated as a contract dispute, Mr. Zhang could not shirk his duty to review, verify, and confirm the terms of the contract, and he would likewise bear liability for faults such as insufficient scrutiny. In the absence of conclusive evidence proving that the department store intentionally created the blank number, it is highly likely that both parties would bear equal responsibility, resulting in neither party being liable for the blank number. Since the blank-number contract lacks an essential element and is invalid for non-performance, the department store's liability for breach of contract could not be pursued unilaterally. Without liability for breach of contract, Mr. Zhang would necessarily have no right to claim liquidated damages. Moreover, even if he suffered substantial direct material losses, the department store would have no obligation to bear compensatory liability. However, when this case is pursued as a tort dispute, although it is difficult to find direct and specific statutory provisions for comparison, it has the following two advantages: (1) it facilitates the clear determination of fault liability in tort; and (2) with respect to fault liability, the at-fault party may at least be required under the basic principle provisions of the General Principles of the Civil Law to bear tort liability for compensation, and the current Law on the Protection of Consumer Rights and Interests also provides further specific provisions as a basis.
2. Whether the "opportunity to win" genuinely exists is not premised on the factual outcome resulting from the deprivation of the right holder, Mr. Zhang, of his opportunity to participate in the drawing. The merchant's argument is a typical case of putting the cart before the horse and reversing cause and effect, committing a clearly serious logical fallacy. Furthermore, regardless of whether Mr. Zhang would have won the prize in any subsequent outcome, or even if he might indeed have failed to win, his right to participate in the drawing could not have been deprived in advance. 3. Although there is no explicit legal provision that directly establishes the value of the "opportunity to win," this does not indicate that its value does not exist at all, nor does it indicate that its value cannot be determined at all, because the present case involves the "lifetime right to use a Buick." Therefore, the primary item in Mr. Zhang's claim for compensation was the usage fee for the Buick (i.e., the rental fee standard), while also taking into account the mall's actual financial capacity and the principle of reasonableness under civil law, proposing a claim for one year's usage fee, which is entirely reasonable and lawful.
(2) Errors in the Court's Judgment:
1. The first instance erroneously held that "the raffle tickets issued by the defendant had no face value." This finding severs the intrinsic connections between things and views the issue from an isolated, static perspective, which is highly erroneous. One must not conflate the so-called "face value of the raffle tickets" with the value of the raffle tickets themselves. That is, an item "without face value" is not necessarily without value. Raffle tickets are certificates of rights issued by merchants that are connected to certain foreseeable material benefits. When raffle tickets are in fact invalid due to the absence of essential elements, the merchant has failed to fulfill its promise of providing complimentary raffle tickets to consumers, thereby depriving consumers of the opportunity to win prizes and constituting an infringement.
2. Erroneous final judgment: ① Given that the final judgment recognized the appellee's infringing conduct as wrongful, it nevertheless erroneously applied the principle of fairness in reaching its decision, completely ignoring the appellant's claims for compensation arising from the appellee's infringement. It merely used the statements that "the right to a chance of winning a prize cannot be equated with the citizens' property rights protected by the General Principles of the Civil Law of the People's Republic of China, and the law has no specific provisions for the circumstances of this case" and that "the appellant, due to the loss of the right to a chance of winning a prize, objectively has difficulty in adducing evidence and calculating the resulting losses" to openly evade and conceal the matter. Moreover, even the petitioner's more reasonable, more concrete, and legally grounded claims for direct material losses such as transportation expenses and lost wages incurred as a result of the infringement were not awarded. Even more erroneous is that, in order to demonstrate the correctness of applying the principle of fairness, the original judgment split the litigation costs of both the first and second instances evenly, requiring the petitioner and the respondent to bear them equally. How can a judgment that fails to distinguish right from wrong reflect civil punishment for the respondent's wrongful conduct?! ② Although this case is the nation's first consumer infringement case involving blank-number lottery tickets and there are no specific legal provisions governing the claim for compensation, the relevant provisions of China's General Principles of the Civil Law and other laws are nevertheless complete and clear. Since the final judgment again confirmed that the respondent's conduct was indeed wrongful, why did it still refuse to apply the principle of fault liability in its decision, and instead erroneously apply the principle of fairness? This clearly constitutes an error in the application of law. In fact, although the "right to a chance of winning a prize" is not directly equivalent to citizens' property rights, the material property content it encompasses cannot be denied; it merely manifests as a somewhat uncertain, expected property right. This is a new phenomenon under market economy conditions and a derivative variation of ordinary civil disputes in the past. Although the specific facts of the case are novel, the legal principles and reasoning are no different. Accordingly, under the relevant provisions of China's Constitution, the General Principles of the Civil Law, and other laws and regulations, the people's court should have had ample grounds to exercise its judicial discretion and render an equitable, reasonable, and lawful determination and adjudication of this case, and absolutely should not have unnecessarily tied its own hands, resulting in unjust law enforcement and an erroneous judgment.
In summary, this case is a typical miscarriage of justice. As the ancient sages of our country said: "Do not do evil because it is small, and do not neglect good because it is small." Similarly, although this case is a civil dispute arising from trivial daily matters, the People's Court should still enforce the law solemnly and treat it with due seriousness. Matters, whether great or small—wherever there is illegality or fault—must be punished according to law. Our country's "General Principles of the Civil Law" clearly establishes the principle of liability for fault. In this case, the respondent is at fault, and has already caused the petitioner relatively significant direct material losses and enormous indirect losses (loss of material rights). The People's Court should, in accordance with law, apply the principle of liability for fault to adjudicate that the respondent bears the petitioner's direct material losses and corresponding indirect material rights losses resulting from the infringement. It absolutely should not absurdly use the so-called "principle of equity" to render a distorted judgment in this case, thereby further harming the petitioner's lawful rights and interests from a legal standpoint. Such a judgment both "undermines" the seriousness of the law and "damages" the petitioner's lawful rights and interests. With respect to this erroneous judgment that defies reason and violates the law, the lawyers of this firm are now once again voluntarily assisting the petitioner, Mr. Zhang, in filing an appeal in accordance with law, and strongly request that the relevant People's Court seriously consider his appeal, conduct a fair retrial of this case in accordance with law, and restore justice to the law!
(Commentary by Attorney Zhiming)
Zhiming Office
December 19, 2001
