A waste disposal company illegally arranged for the import of solid waste (copper sludge). This was detained by customs at Shanghai port. Since it was suspected that the copper sludge contained heavy metals, it was necessary to dispose of the sludge by means of a special, expensive process. 

The defendants were found guilty in criminal proceedings for smuggling waste. In civil proceedings, the Third Intermediate People's Court of Shanghai Municipality made an order requiring the defendants to compensate the authorities for the cost of disposing of the sludge. This was upheld on appeal by the High People's Court of Shanghai Municipality.