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George Washington University Law School

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Tuesday, August 12, 2014

The Peter Humphrey case: my (preliminary) take

I have now had time to read quickly through the transcript of the trial of Peter Humphrey and his wife and business partner Yu Yingzeng as posted on the Shanghai No. 1 Intermediate Court’s weibo feed, and have a few observations that may be of interest. First, some caveats:

  • There is no way of knowing if the transcript represents everything that happened in court during the trial.
  • These are very preliminary comments. I have not seen the indictment or any other prosecution arguments, the defense brief, or the judgment. The trial took place on August 8th and an oral judgment was delivered that very day. A written judgment was promised within five days and that five-day period is not up yet. Thus, these comments are based entirely on the transcript. I hope to have better informed comments when I have seen more materials from the trial and after I’ve done a little more background research.
  • When I say “Humphrey”, I will usually mean Humphrey and Yu.
  • Certain issues were apparently discussed by the parties and perhaps disposed of in pre-trial proceedings.
  • I do not know all the matters that the defense had to take into consideration in deciding on its strategy. Thus, if I seem to raise questions about the defense’s strategy, that’s all they are: questions. They are not informed assertions that the defense did something wrong. A case like Humphrey’s is extremely sensitive and all kinds of things might have been going on behind the scenes.

Now for the comments:

1. The main defense lawyer for Humphrey, who did most of the talking among all the defense lawyers during the trial (Yu had separate lawyers), was Zhai Jian (翟建) of the Shanghai branch of the Dacheng Law Firm. By coincidence, I met Zhai in December 2012 at a conference in Hainan. He represented Yang Jia (杨佳), the Shanghai man who slashed several police officers to death in a Shanghai police station in 2008, in Yang’s unsuccessful death sentence appeal.

2. Humphrey seems to have been charged with both unlawfully receiving personal information about citizens and unlawfully supplying it. The facts necessary to support these charges are quite different and need to be discussed separately. They were not rigorously distinguished in the hearing as reflected in the transcript.

3. It’s not completely clear that the section of the Criminal Law Humphrey was charged with violating, Art. 253, was even intended to apply to people like him or his company, China Whys. Here is the part of Art. 253 under which he was charged; it was added to the Criminal Law in 2009. I have added paragraph numbers.

               [3] 国家机关或者金融、电信、交通、教育、医疗等单位的工作人员,违反国家规定,将本单位在履行职责或者提供服务过程中获得的公民个人信息,出售或者非法提供给他人,情节严重的,处三年以下有期徒刑或者拘役,并处或者单处罚金。

               [4] 窃取或者以其他方法非法获取上述信息,情节严重的,依照前款的规定处罚。

               [5] 单位犯前两款罪的,对单位判处罚金,并对其直接负责的主管人员和其他直接责任人员,依照各该款的规定处罚。

               [3] Any staff member of a state organ or an entity in such a field as finance,  telecommunications, transportation, education or medical treatment who, in violation of state provisions, sells or illegally provides to others personal information on citizens that was obtained during the organ’s or entity’s performance of duties or provision of services, shall, if the circumstances are serious, be sentenced to fixed-term imprisonment of not more than three years or criminal detention, and/or be fined.

               [4] Whoever illegally obtains the aforesaid information by stealing or any other means shall, if the circumstances are serious, be punished under the preceding paragraph.

               [5] Where an entity commits either of the crimes described in the preceding two paragraphs, it shall be fined, and the person in charge who is directly responsible and other directly responsible persons shall be punished under the applicable paragraph.

               It seems clear that this rule is aimed at cases where an organization legitimately obtains information about citizens in the course of its functions, and employees then sell this information to others behind the organization’s back. That’s Paragraph 3, in any case, and it applies to suppliers of information. Although the prosecution made much of Humphrey being a supplier of personal information (to his clients), it seems quite a stretch to apply Paragraph 3 to him. The organization of which he was a staff member was his own company; he can’t be said to have misappropriated information from China Whys.

               What about Paragraph 4? Note that while Paragraph 4 applies to receivers of information, it is still limited to the type of information referred to in Paragraph 3: information obtained by some organization in the course of performing its functions. Thus, it does not apply to all cases in which someone illegally obtains personal information. For example, if I break into your house and steal your address book, that could well be deemed obtaining personal information about citizens through illegal means, but it’s not “the aforesaid information”.

               It is possible that Humphrey obtained some personal information through illegal means, but the transcript shows no effort by the prosecution to show that it was in the category of information “obtained during the organ’s or entity’s performance of duties or provision of services”.

               In 2013, the Supreme People’s Court, the Supreme People’s Procuracy, and the Ministry of Public Security issued a joint notice about this particular crime, but it doesn’t change the above analysis. If anything, it underscores the point that the revised Art. 253 was about something quite different from what Humphrey was doing. It was about the problem of employees of various institutions that hold a lot of personal information selling that information on a massive scale to middlemen, who would then resell it to “illegal” investigative companies for purposes such as “illegal” debt collection. (I don’t know where the line between legal and illegal is in the above cases.)

               Duan Wanjin, a lawyer for Humphrey, in fact argued that the source of the information did not meet the requirements of the law; I don’t think the prosecution addressed this.

4. The defendants argued that in many cases, the acts in question were carried out not by them but by independent third parties they had hired, and that they did not know, nor have reason to know, what methods those third parties may have used. In fact, they argued, at least in some cases they had reason to believe the methods were lawful. The prosecution did not really address this argument.

5. The most disturbing aspect of the proceedings is the almost complete lack of attention paid to a critical element of the crime with which Humphrey was charged: the element of illegality in the collection of information. Basically, there was very little disagreement about the facts in this case, so it’s disappointing that so much of the trial—well over half—was devoted to establishing things that weren’t really in question. The critical question is what the legal effect of those facts should be.

               For example, the prosecution devoted some time to establishing that China Whys’ projects had code names. What this has to do with the charges was not made clear. The prosecution also apparently thought the following facts needed to be established and were important:

  • The defendants or their agents had hired people to watch a target. (Note that as far as the evidence showed, the watching involved someone sitting outside the target’s office for three hours.)
  • The defendants had “monitored” (监控) people. (No evidence was introduced on this point; the defense’s response was that the prosecution got this idea from a misunderstanding of the term “monitoring” used in China Whys’ reports, where it simply meant things like tracking news about a company or individual.)
  • The defendants had hired a non-mainland (境外) company to engage in following and monitoring targets. (This was part of the prosecution’s legal argument and was not supported by any evidence introduced in the factual part of the trial.)
  • The defendants or their agents had bought and sold information.
  • The defendants or their agents had pretended to be relatives or clients of various people when seeking information.
  • The defendants had an illegal purpose in collecting the information. (The prosecution didn’t say what that purpose was; the defense argued out that their purpose was to conduct their business and was not illegal.)

               The prosecution did not, however, make any argument or cite any authority in support of its assertion that these methods were illegal. Nevertheless, the court seems to have taken it for granted that these methods are indeed illegal. This is of tremendous significance. If buying and selling cell phone numbers is illegal, for example, then millions of individuals and companies in China are criminals. A friend of mine regularly receives calls from Baidu trying to sell her higher placement in search results; they presumably got her number, and that of millions of other citizens, from a seller of cell phone numbers. Is Baidu going to be next in the dock?

6. The response of the defense to this issue of illegality of methods seemed ambivalent. In some places in the transcript, it argued that what the defendants did was to pay for investigative services, which is not prohibited by law. Thus, the requirement of illegality of method was not met.

              Elsewhere, though, the defense made what to me seem to be astonishing concessions. Zhai Jian states, “The acts of the defendants in this case are unlawful, because neither individuals nor commercial entities have the right to obtain citizens’ personal information about their families, their entering and leaving the country, and their mobile phone communications via the method of paying for it.” He goes on to say that in pre-trial conferences with the defendants, he has ascertained that in their own countries, information on entering and leaving the country as well as mobile phone communications are considered strictly private, and “therefore the defendants’ collecting of such information is unlawful.”

               This argument seems questionable in a number of respects. First and most obviously, what other countries do cannot determine Chinese law, although obviously it bears on whether the defendants thought they were doing something wrong. Second, this statement conflates the issue of what counts as personal/private information with the issue of whether collecting it is unlawful. Art. 253 criminalizes only the unlawful collection of citizens’ personal information, so deciding that something should be considered personal information does not end the inquiry into criminal liability.

               Third, and most important, Zhai is as silent as the prosecution on the source for his statement about the applicable law. It is sometimes said in jest that in China, everything not specifically permitted is forbidden, but this really is nothing more than a jest. No legal system could possibly function this way. Chinese law does not specifically permit any of the million actions we take every day, from brushing our teeth to watching Korean soap operas; this does not make us criminals. A statement that it is unlawful to do something needs support. Again, if Zhai and the prosecution are right about this, China is awash in criminals whose offenses are far worse than those of Peter Humphrey.

7. Even if all the factual predicates for the crime are present, it’s not clear that they rise to the level of criminality under the Criminal Law. This is because Chinese criminal law has a general rule (Art. 13) that an act is not a crime where “the circumstances are clearly minor and the harm is not great” (情节显著轻微危害不大). In addition, both Paragraph 3 and Paragraph 4 explicitly contain a requirement of serious circumstances. Humphrey’s lawyers argued that this requirement was not met; the prosecution argued that it was. The relevant facts apparently involve how many items of personal information were obtained, the purpose for which they were obtained, whether the defendants made a lot of money, and the general social danger of their activities.

               Sometimes the Supreme People’s Court will come up with an interpretation of what constitutes “serious circumstances” in particular crimes. Unfortunately, there is no such interpretation or other official guidance available here. Thus, the issue of what facts count and how they count gets argued pretty much just by assertion. Here’s a rough breakdown of the arguments:

Issue

Prosecution

Defense

Amount of information obtained

As many as 256 items!

Only 256 items!

Motivation

To make money

1. Of course to make money; we were a business.

2. Contribution to anti-corruption efforts. In about 90% of the cases we investigated, initial suspicions turned out to be accurate.

Amount of money made

“Huge” (citing gross revenues)

You can’t look at gross revenues; you have to deduct costs.

Social danger

What kind of society would it be if people could be watched and followed 24 hours a day, with secret photos taken of them? (There’s an obvious snarky answer, but the defense wisely did not make it.)

There was actually very little personal information taken, that which was taken was not all passed on to clients in reports, and that which was passed on was not used for bad purposes. The defense also noted (as do I) that some of the prosecution’s claims had no foundation in any evidence they brought before the court. There was, for example, a single instance of following someone. Someone was stationed outside the target’s office for three hours. That’s it, at least as far as the prosecution’s evidence showed. No evidence of secret photo-taking of people was introduced.

              One way of getting at the issue is to look at other cases, especially cases from the same jurisdiction, to see what kinds of facts resulted in prosecution and sentencing. Humphrey’s lead attorney, Zhai Jian, pointed out that he had previously handled a case involving the same charges; the defendant had appropriated several million items of personal information and yet got just a suspended sentence. Although the number of items of personal information taken is not and should not be the sole criterion for prosecution and sentencing, I thought it would still be useful to see what other Shanghai cases look like and asked an RA to look at the twenty most recent Shanghai cases on this issue in a Chinese legal database. (I have not yet personally looked at these cases because for various reasons I can’t access the full text of the database at the moment.)

               The results – and I stress that these are preliminary and may tell only a partial story –suggest that a case of prosecution and sentencing for 256 items of personal information is, to put it mildly, an outlier. Here are the first seven instances:

# of items

Sentence

4,619

Fine of 3,000 yuan

10,153

1 year in prison plus a fine of 10,000 yuan

450,000

18 months in prison plus a fine of 5,000 yuan

250,000

14 months in prison plus a fine of 4,000 yuan

1,700

8 months in prison plus a fine of 5,000 yuan

198,187

1 year in prison plus a fine of 5,000 yuan

136,727

18 months in prison plus a fine of 30,000 yuan

               No doubt the facts of each case are different, but I think the general picture is clear. In all but one (see below) of the cases in my sample of 20, the number of items was at least 4 digits; in six of twenty, it was in 6 digits; in two cases, it was several million (the defendants in each case got a suspended sentence of a year and 18 months respectively, plus a small fine). At the very least, I think the burden is now on those who would assert that this case is not an outlier and possibly a case of selective prosecution. (The one exception is a puzzling case where only 6 items of information were involved; I haven’t yet seen the full text of the judgment, but would guess that the facts must be very unusual.)

8. Yu Yingzeng observed that given the way Chinese police operate, companies wanting to act against corrupt employees have no choice but to use services like theirs. Police will not investigate without evidence, so you have to get evidence before going to the police. But now evidence-gathering is being made illegal. Yu compared the situation to that of having to catch a thief yourself because the police won’t act without evidence, and then you get charged with violating the thief’s rights.

9. Conclusion: To wrap up, there are at least two disturbing aspects about this case. One is that at least on the basis of my very superficial review of recent cases in Shanghai, the facts in this case don’t seem to justify the prosecution and certainly not the sentence. (Of course, a closer look at this and other cases might upset this conclusion.) The second is that this case does nothing to clarify an absolutely critical issue for anyone that collects or uses business information: what counts as an illegal method of collection? The issue was never properly joined, and so there was no discussion of broader principles or policies, let alone specific statutes and regulations, that might help us figure out this question.

10. Let me just repeat that these are very preliminary observations. I haven’t even seen the text of the judgment yet, and I may have overlooked something in the transcript.

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