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A case study on how legal opinions can be a critical legal tool.
Background
In early 2020, a Chinese Factory was sued for trademark infringement in the Illinois Federal Court of the United States where the factory owner wished to litigate the case pro se (self-represented). The Plaintiff filed a Motion for Entry of Default Judgment in that a default judgment should be entered against the defendant for their failure to appear in court. A Motion to Dismiss was filed by the factory owner to assert defences promptly after. Rather than replying to arguments in the Motion to Dismiss, the Plaintiff fought back with a Motion to Strike, stating the Factory is a corporation with a 3000-square-meters workshop, over 150 experienced workers, quality control department, and produced products which are sold around the world, and, therefore making the Factory a company and not eligible to litigate the case pro se.
The Court swiftly denied the owner’s Motion to Dismiss and granted the Plaintiff’s Motion to Strike and Motion for Entry of Default Judgment, in which $2,000,000.00 was awarded to the Plaintiff. As a result, the Factory lost the case because its Motion to Dismiss is void and they, procedurally, didn’t appear in court.
The owner believed the Factory is a trade name registered under Chinese laws and not a corporation and thus should be allowed to litigate the case pro se. In order to secure their position and overturn the court’s Order, the owner reached out to Mr. Zeng for an Expert (legal) Opinion to address the Court.
Mr. Zeng concurred with the owner’s claims in reference to the Civil Code, the Corporation Law, the Civil Procedure Law, and Supreme Court's directives and concluded the Factory is not a corporation under Chinese laws. He demonstrated his understandings in a 4-page legal opinion to the judge indicating the Factory is an Individual-Run Industrial and Commercial Household operated by a natural person. Mr. Zeng also referred to the Verification Information of the Factory and a Returned Report from National Enterprise Credit Information Publicity System which reinforces the notion the factory is not a corporation. Individual-Run Industrial and Commercial Household is under Chapter 2 Section IV of the Civil Code. Mr. Zeng held his position the Factory is operated by a natural person, and the operator shall be eligible as litigant to any lawsuit. The liabilities or debts of the Factory shall be borne by the natural person’s personal property. There is nowhere in the Corporation Law regarding Individual-Run Industrial and Commercial Household, and therefore is concluded that Individual-Run Industrial Commercial Household is not subject to the Corporation Law of China.
The opinion letter was then responded by an Assistant Professor at South West University of Political Science and Law with a 4-page affidavit in retort to Mr. Zeng’s opinion.
Upon receipt of the Assistant Professor’s affidavit, Mr. Zeng rebutted with another four-page reply. He responded point-by-point to the opposing party’s arguments. First, Mr. Zeng stated the proper subject should be on whether the Factory is a corporation, instead the Assistant Professor interpreted U.S. laws other than Chinese laws to give his opinion. Second, the Assistant Professor referenced on case laws to support his arguments, but China is a code law country. The Assistant Professor also did not appear to be fluent in the interpretation of Chinese law because he mis-interpreted articles in the Civil Code. He also claimed the Factory has obtained a Certificate of Organization Code without realizing the Code had been abolished several years ago. He also utilized his own classification of business entities in China in which there is no professional article, professional book nor China legal regulation that can be used to support him. From the arguments expressed on his affidavit, his points did not seem to be supported by effective Chinese laws or regulations.
After both parties’ intense correspondences, the court took into consideration the arguments of both sides and made its ruling. In a rare move, the judge issued an order to overturn the previous decision. The judge took Mr. Zeng’s expert legal opinion on Chinese law and overturned his initial ruling where the ruling against the factory owner is disqualified and default judgement against them has been vacated. The judge in the end directed the Plaintiff to respond directly to the Defendant's Motion to Dismiss.
In April 2021, the Plaintiff did not provide further response and decided to dismiss the case voluntarily.