This Week in Luxembourg

This week, the Grand Chamber weighed in on the imprisoning illegals debate. What the Court said is that MS may not make illegality a crime per se, and may not detain illegals, except in the circumstances envisaged in art. 8 of Directive 2008/115, i.e. in the run-up to forcible removal. Achughbabian

The First Chamber had another case on Decision 1/80 (cf. p. 155 here), although this time not against the Netherlands. A Turkish immigrant worker does not have the same kind of protection against expulsion as an EU citizen does under Directive 2004/38, meaning that he can be sent back to Turkey if his “numerous criminal convictions” make him a “genuine and sufficiently serious threat affecting the fundamental interests of society”, no matter how long he has been in the host country. (Assuming such expulsion is proportionate, of course.) Ziebell v. Land Baden-Württemberg

In Residex v. City of Rotterdam, the Rotterdam District Court thought it had found a neat and simple way to resolve the problem of unlawful state aid in the form of a guarantee given by the city. It declared that guarantee null and void under art. 3:40 Civil Code, and that was pretty much that. The Court of Appeals agreed. The Advocate-General at the Supreme Court, however, thought this was too simple by half. So did AG Kokott (NL). The First Chamber now signs off on the nullity approach, but with the important proviso that the court always has to make sure the competitive situation is restored.

KME and Chalkor lost the appeals in their copper plumbing cartel case. It doesn’t look like they argued anything interesting, although I may of course be wrong, given that I completely missed the novelty of Pierre Fabre in October. KME v. Commission, KME Germany v. Commission and Chalkor v. Commission

Likewise, France Télécom lost its state aid appeal. That case is obviously going to be interesting for anyone working on regulation and competition law issues, even if the particular circumstances of France’s “special tax regime” are unlikely to appear anywhere else.

For the specialists on patents for medicinal products: In Merck Sharp & Dohme v. Deutsches Patent- und Merkenamt, the Second Chamber discusses the possibility of “grant[ing] a supplementary protection certificate where the period that has elapsed between the date of lodging the basic patent application and the first marketing authorisation in the European Union is less than five years.” Cf. Regulation 1901/2006 on medicinal products for paediatric use.

In Invitel (NL, DE, FR), AG Trstenjak discusses the role of an actio popularis in consumer protection law. (Cf. art. 6 and 7 of Directive 93/13.) The answer to all three questions favours the (Hungarian) consumer.

In a case concerning access to documents in a merger review case, AG Cruz Villalón proposes annulling the General Court’s judgement, which in turn annulled the Commission’s decision. The AG’s main problem with the lower court ruling seems to be one of approach, however, not of result. The AG wants the Commission to provide a “concrete and individual justification” for each document it declines to give access to. Commission v. Agrofert Holding

The Deutsche Post state aid case seems to have a troubled past, having already gone to the General Court and the CJEU once before. Now, however, the General Court holds that the request for information that Deutsche Post is trying to get annulled is a non-decision. Deutsche Post v. Commission

The General Court struck HTTS from the list of people and organisations whose assets were to be frozen in light of the sanctions against Iran, because the Council’s stated reasons were insufficient and/or contradictory. It did, however, give the Council two months to fix this problem, so HTTS will probably not get its assets back anytime soon. HTTS Hanseatic Trade Trust & Shipping GmbH v. Council

Macedonia v. Greece

On EJIL:Talk!, Antonios Tzanakopoulos has a discussion of the ICJ's judgment in Macedonia v. Greece. I have very little to add to what he wrote, but I would like to point out one aspect of the case that he does not mention: Did Greece comply with its obligation not to "object" by abstaining, or was it supposed to vote in favour? Given that NATO requires unanimity for invitations to new members, the answer is quite obviously the latter, but I do love the lawyerly creativity of the Greeks involved here. It is a classic example of lawyers taking an unwinnable case and trying to put a non-frivolous spin on it:

69. The Respondent interprets the obligation “not to object” more narrowly. In its view, an objection requires a specific, negative act, such as casting a vote or exercising a veto against the Applicant’s admission to or membership in an organization or institution. An objection does not, under the Respondent’s interpretation, include abstention or the withholding of support in a consensus process. As a general matter, the Respondent argues that the phrase “not to object” should be interpreted narrowly because it imposes a limitation on a right to object that the Respondent would otherwise possess.

As Tzanakopoulos points out, the ICJ's answer to this point actually contains some interesting considerations regarding the weighing of duties against rights, but the original argument is fascinating in its creativity...

Palanca

I'm sorry, but this is just fun. I've always wondered how Budjak, the little bit of Ukraine that lies between Moldova and the Black Sea, is connected to the rest of the country. Today I decided to look it up. It turns out there is a very tiny road, the T-1604, at the end of the estuary of the Dnjestr, essentially running over a couple of Lido-type islands and peninsulas, but that the E87/M15, the main connection between Odessa and Reni in the South-West on the Danube runs through the South-East corner of Moldova for 7,7 km.

View Larger Map

As far as I can tell, Moldova and Ukraine have a Treaty whereby Ukraine is going to obtain title over that road (but not the land on the South-side of the road), but this Treaty has only partially been carried out. Says the Moldovan Deputy Foreign Minister in 2009:

Similarly, we have a problem in Palanca – there is a needed to complete the demarcation process, but also to deliver on the Republic of Moldova’s commitment to transfer into the property of Ukraine not only the asphalt but also the land area of 7.7 kilometers of road (which is a portion of the 300 km road between Odessa and Reni), and also to clarify the situation with the land, which under the Treaty of 2001, should be transferred into the property of Ukraine. Moreover, attention - even those who are trying today to politicize this issue and making all sorts of speculation have already passed the road surface and land pertain to the road into the property of Ukraine in February 2002. Thus, the surface was transferred, yet without transferring also the land from under the road.

In the words of one article: Ukraine made Moldova a Maritime State by Mistake. How awesome is that???

But no worries, the EU is on the case.

This Week in Luxembourg

In Painer v. Standard Verlag and others, the case about the photograph used to search for Natascha Kampusch, the 3^rd Chamber’s judgment is more favourable to the photographer than AG Trstenjak’s opinion was. Unlike the AG, the Court suggests that the photographer probably will be able to sue all the newspapers at once, and it also holds that the public interest defence is less powerful than the AG had argued.

The law on the importation of counterfeit goods turns out to be more complicated than I thought. If I understand this judgment correctly, whether the intellectual property can prevent counterfeit goods from being brought into the EU depends on whether they’re coming here to stay. Joined cases Philips v. Lucheng Meijing and others and Nokia v. HM Commissioners of Revenue and Customs

The Netherlands, too, is no longer permitted to require that notaries have Dutch citizenship. The war on notaries continues. (Cf. these judgments from May: Commission v. Greece, Commission v. Germany, Commission v. Austria, Commission v. Portugal, Commission v. Luxembourg, Commission v. France, and Commission v. Belgium.) Commission v. Netherlands (NL, DE, FR)

AG Mengozzi proposed that the Grand Chamber should overrule the General Court’s judgment in Tay Za v. Council, where that court upheld the asset freeze imposed on the applicant on account of his connection to the regime in Burma. The AG considered that the General Court and the Council made a mistake on legal basis (art. 60 and 301 EC), that there had been a violation of the rights of defence, that the General Court had been too deferential to the Council, and that the Council had failed to state adequate reasons. So yes, ouch… Tay Za v. Council

In another opinion for the Grand Chamber, AG Bot gives an – in my view appropriately – narrow reading of copyright law & software. Copyright protects the code, not the functionality. Cf. Directive 91/250. Of course, the user manual is a different story. That you can’t copy. SAS Institute Inc. v. Word Programming Ltd.

AG Trstenjak has some thoughts on unfair trade practices and usury. Yes, usury. Pereničová and Perenič v. SOS finance (NL, DE, FR) Perhaps more relevant for the 21^st century, she also has an opinion on the French approach to re-entry visas for 3^rd country nationals who temporarily want to leave France. The AG does not consider the French approach unlawful under the Schengen Borders Code. Association nationale d’assistance aux frontières pour les étrangers v. Ministre de l'intérieur, de l'outre-mer, des collectivités territoriales et de l'immigration (NL, DE, FR)

Magical Formula

Following the example of Peter Lindseth, I thought I'd also copy/paste my reply to Kenneth Anderson's question on Opinio Juris:

Part 1:

Kenneth,

I’m not sure that I understand what you’re looking for. Obviously there is analysis like the one mentioned by my – let’s go with colleague – prof. Maduro above. The most famous one in recent weeks is by Joshka Fischer, also on Project Syndicate:

http://www.project-syndicate.org/commentary/fischer67/English

Such analysis is not uniquely the province of jurists; when you’re re-writing a constitution, you can do whatever you like as long as it is legitimate. And legitimacy is a political issue, not legal. What European law specialists can do is point out where there is and is not a need for a Treaty change. Behind closed doors, that’s what the Council has Mr. Legal for (the successor to Jean-Claude Piris, who actually wrote the Lisbon Treaty, in the sense of turning the political agreement into legal language). However, for many of the main proposals on the table today, it is perfectly clear that they require a Treaty change. (Or a change in the ECB’s statutes.) In that situation, law scholars have no particularly privileged position. They can make their proposals just like everybody else.

Part 2:

The “non-functionalist” outcome [i.e. the outcome that does not involve giving the EU whatever powers it needs to get the job done] will continue to be on the table for the very simple reason that, if the people are allowed to vote, they will vote against further integration in virtually every EU Member State. The victims of the crisis will vote against because they don’t want austerity – regardless of whether it is necessary – and the countries that are currently paying the bill will vote against because the people don’t want to pay for other people’s sins – regardless of whether it is necessary. (And the Brits will vote against because, well, because they’re Brits.)

And that is the uncertainty, looking forward: the members of the Council are exposed to two opposing sources of pressure: on the one hand, they want to do what is necessary, and on the other hand they want to “obey” their voters. (Or at least not upset them too much.) This tension is resolved a little through elections, even though such elections only bring people to power who will end up doing much the same thing as the politicians they replaced.

(Which is why elections in Greece aren’t a very helpful idea. Note also the paradox of Spain, where the indignados were so unhappy with Zapatero that they ended up electing a centre-right government instead.)

A more drastic solution is referendums. Even though voters have a surprising ability to abstain from voting while still complaining, referendums forcibly put everyone back on the same page. They give the people ownership of the problem and its solution, especially if they are properly designed, for example by giving people different alternatives, the way Switzerland does. If the people of Greece don’t like the current deal with the EU, do they want the government to renegotiate, to leave the Euro, or to leave the EU entirely? Regardless of how they answer, the legitimacy problem is resolved, at least as to Greece. The people deserve to get what they want, right between the eyes.

As the reaction to the Greek referendum idea demonstrates, most European leaders will not go that far. However, they are still exposed to elections. Sarkozy has to run for re-election next year. Merkel has a few more years, but she can’t afford to lose too many state-elections. This is why the uncertainty continues, and why everyone is looking for the magic formula. Joschka Fischer’s article, that I linked to above, is an attempt to do exactly that. He’s proposing something he really doesn’t like – a European Senate – as a way of simultaneously improving the EU’s legitimacy and pushing forward with European integration. And in many ways he’s right; all it takes is some magic formula that resonates with voters that shows them that the powers that be take their concerns seriously. The only problem is that it is impossible to tell which formula will work. Probably, the answer is that it takes a formula that is both drastic enough to have substance, and that is then adopted with full commitment by a large number of influential politicians, who use their political skill to sell it to the people. Untill the politicians take such a risk, there will be no magic formula, no solution to the tension between what needs to be done and what the people want done, and no end to the uncertainty and the speculation.

Last Week in Luxembourg

Unquestionably, the most important judgment last week was Scarlet Extended v. Sabam, the internet privacy case. Internet Service Providers cannot be made to police the use of peer-to-peer file sharing software among their customers, because such a requirement would violate both the rights of the ISPs and of their customers. Cf. EUObserver, bbc.co.uk.

On the other hand, the Court did strike down a Spanish Royal Decree that gave data subjects a greater level of protection than what was foreseen by the Data Protection Directive 95/46. Apparently the Directive aims at full harmonisation on this point. Asociación Nacional de Establecimientos Financieros de Crédito

The Court sided with the Commission on the alternative modes of TV-advertising used in Spain, “such as telepromotions, advertorials, overlays, sponsorship credits, micro‑ads comparable to advertorials, self‑promotional spots, virtual advertising and public service advertising”. They do count as advertising, putting Spain in violation of the maximum amount of time allowed for that purpose by art. 18(2) of Directive 89/552.

In Medeva and in Georgetown University and others, the Court gives some guidance as to the correct interpretation of art. 3 of Regulation 469/2009 on the supplementary protection certificate for medicinal products.

For some reason, Italy apparently decided to ignore the whole Factortame/Brasserie du Pêcheur line of cases. Commission v. Italy (FR, IT)

In anti-terrorism news, the General Court rejected Jose Maria Sison’s claim for compensation based on the unlawful freezing of his assets. Sison v. Council

In Jones and others v. Commission, the General Court dives into the pre-1990 British Coal market. Curiously, the applicant’s claim is rejected, but the Commission is still ordered to pay their costs.

The Commission’s Decision not to go after the producers of ink cartridges and toners for competition law violations was upheld in EFIM v. Commission.

This Week in Luxembourg

The first Grand Chamber judgment this week concerned the corporate tax regime in Gibraltar. The Commission thought that it involved illegal state aid, the General Court disagreed, and now the Grand Chamber sided with the Commission. The reform does display unlawful selectivity in its treatment of offshore companies, contrary to what the General Court had said (par. 85-110). In the remainder, the Grand Chamber takes care of the case itself, noting for example the absence of any stare decisis rule for the Commission (par. 136). Commission v. Gibraltar and UK

The Grand Chamber also released another sequel to Ruiz-Zambrano, following McCarthy in May, this time in the form of five cases coming from Austria. The big difference was that this time there was no risk of Union Citizens being deprived of subsistence, since they would be taken care of regardless of whether their loved ones would be allowed to stay in Austria. For that reason, the Court came out on the side of the Austrian government. This whole “genuine enjoyment” test looks like it will be a pretty rare creature. Dereci et al. v. Bundesministerium für Inneres cf. Eutopialaw

In 2006, Germany became very unhappy about an intended audit by the Court of Auditors of its VAT system, the fear being that the audit would extend “to [a] review [of] the economic policy of the Member States in so far as that policy contributes to the creation of GNI which itself underpins the calculation of an own resource of the European Union” (par. 39), so they threw up a huge fuss, for which they were now finally rebuked by the Grand Chamber. Commission v. Germany

Zaza Retail cleared up some issues about territorial insolvency under art. 3(2) of Regulation 1346/2000, as well as the role of the public prosecutor as the plaintiff asking for insolvency. The result is that the Belgians were entitled to have Zaza declared bankrupt insofar as it was active in Belgium, but not prior to its bankruptcy in the Netherlands.

As I already explained when AG Trstenjak’s opinion (NL, DE, FR) came out in September, the mortgage non-payment case of Lindner is a bit complicated. The Court now cut the knot and decided that the Czech court was entitled to appoint a mandataris ad litem once the defendant could not be located, thus avoiding some of the problems the AG ran into. Hypoteční banka, a.s. v. Udo Mike Lindner

The Court signed off on Bulgaria’s practice of banning certain criminals and other offenders from leaving the country for extended periods of time, as long as the measure is proportionate. Gaydarov and Aladzhov

Italy was slapped with a penalty payment of € 30 million for every six months that they fail to recover a sum of illegal state aid (if they recover part, the payment decreases proportionately), as well as a lump sum fine of € 30 million. Commission v. Italy

Since the Court’s case law on terror suspect asset freezes is now pretty well settled, appeals are normally unsuccessful. That goes for this week’s Bank Melli v. Council as well.

Speaking of Iran, AG Yves Bot has a pretty fun case concerning the criminal prosecution of three individuals suspected of selling nuclear technology to Iran. The German court wants to know whether a high-tech oven is an “economic resource” even without the software (really?) and what it means to participate “knowingly and intentionally, in activities the object or effect of which is, directly or indirectly, to circumvent the [embargo]”. (Cf. art. 7(4) of Regulation 423/2007). The answer probably isn’t very helpful, but OK. Federal Prosecutor v. Afrasiabi et al. (NL, DE, FR)

In O’Brien, AG Kokott considers whether judges are “workers” for the purposes of the law on part-time work. Initially, she seems to dodge the issue a little, declining to make it an autonomous concept of EU law but declining to give the MS free reign either, but in reply to question 2 she concludes that discrimination between full-time and part-time judges is not permitted.

AG Jääskinen concluded that the data retention directive 2006/24 does not apply to a request for access to the data covered by that directive in the course of a civil proceeding. In this case, that means that online copyrights are once again safe. Bonnier Audio et al. v. Perfect Communication Sweden (DE, FR)

Finally, it looks like the Polish Constitutional Court incorporated the Solange reasoning into Polish law. EU law is presumptively constitutional, but it may not always be. Verfassungsblog

This Week in Luxembourg

Portugal lost another golden shares case, this one concerning its golden share in Oil and Gas Company GALP Energia SGPS SA. Commission v. Portugal

In Rank Group, the ECJ gave some interesting guidance on Fiscal Neutrality and gambling, without actually answering whether the UK was permitted to exempt certain games of chance from VAT but not others.

More taxation fun: If mineral oils used for navigation are exempt from excise duties (art. 8(1)(c ) of Directive 92/81), what about the oil used to fuel an on-board excavator that is fixed to the ship but has its own engine? The Court ruled that it does not get to enjoy the exemption. Sea Fighter

In the category of HUH???, there is the case of Idromacchine and others v. Commission (DE, FR, IT). What happened is that the Commission mentioned the plaintiffs by name, and in a not entirely flattering way, in a state aid decision against Italy. So they sued the Commission in defamation and now won € 20.000 in damages.

Finally, it might be useful to note that on October 27, the Council has released its report on its performance in the Court in the first half of 2011. That is to say: all cases that it was a party to. Link

P.S. the archive of these emails is here.

Microban

It looks like I missed an interesting judgement last week. Apparently there's more to the General Court's Microban case than meets the eye. In my defence, this is the headnote:

Public health – List of additives which may be used in the manufacture of plastic materials and articles intended to come into contact with foodstuffs – Withdrawal by the original applicant of the application for inclusion of an additive on the list – Commission decision not to include 2,4,4’-trichloro-2’-hydroxydiphenyl ether in the list – Actions for annulment – Admissibility – Regulatory act – Whether directly concerned – No implementing measures – Legal basis

...so you can see why I would not immediately jump in to read the judgement. However, there is an interesting issue of procedure there, regarding the admissibility of an action of annulment for this kind of regulatory act. The new Eutopia Law blog has the story. The key point is that the General Court defined Regulatory Acts as "all acts of general application apart from legislative acts".

[UPDATE: On the blog of the King's Student Law Review, dr. Agne Limante has another useful writeup of this Microban case and the related Inuit case.]

This Week in Luxembourg

This week, the Grand Chamber considered the problem of which court has jurisdiction over cases regarding tortious publications on the internet. The Court ends up splitting the difference: the ideal forum is the home forum of the defendant or – and this is new – the home forum of the plaintiff, but the case can also be brought anywhere else the content was published, although then the court can only award damages to the extent damage was incurred in that particular jurisdiction. (Sorry about that sentence…) Cf. art. 5(3) Regulation 44/2001. eDate v. X and Martinez v. MGN cf. bbc.co.uk

In Competition law, the Grand Chamber gave Solvay a big win. It found that the General Court had erred by rejecting Solvay’s arguments that its right of access to the file and its right to be heard had been infringed to the point of requiring the nullity of the Commission’s Decisions. As a result, both the General Court’s judgements (1 and 2) and the Commission’s Decisions (1 and 2) go in the trash bin. For those keeping score, the total fine was € 23 million. Solvay v. Commission and Solvay v. Commission

AG Cruz Villalón took a look at some Italian gambling law, and found that it probably favoured incumbents in a manner incompatible with the Treaties. (“Probably” because the national court would still have to have a look.) Some other aspects of the law, however, can stay in place as far as the AG is concerned. Costa and Cifone (NL, DE, FR, IT)

And finally, there are two AG opinions that are a bit more technical:

In Centre Hospitalier universitaire de Besançon (NL, DE, FR), AG Mengozzi interprets Directive 85/374 as allowing Member States to make the user (in this case the hospital or the doctor) liable for using a defective product in addition to the liability of the producer.

And in Söll (NL, DE, FR) AG Jääskinen looks at art. 2(1)(a) of Directive 98/8 to determine the correct definition of “biocidal products”. He opts for a broad definition, whereby the substance in question need not necessarily have a direct biological or chemical effect on the harmful organism in question, as long as it has an indirect effect, and as long as this effect is intended.

P.S. the archive of these emails is here.

Ratings Agencies' Speaking Ban

Given my question from last week, and questions raised by Eugene Volokh and Kenneth Anderson elsewhere, I should probably look into this story myself. The original Financial Times Deutschland story explained:

EU-Binnenmarktkommissar Michel Barnier will es Ratingagenturen notfalls verbieten, Urteile über kriselnde EU-Länder zu veröffentlichen. In einem vertraulichen Vorabentwurf für eine Reform des Gesetzes zu den Ratingagenturen schlägt Barnier vor, dass die neue Wertpapieraufsicht ESMA das Recht erhält, die Veröffentlichung von Einschätzungen über die Zahlungsfähigkeit "vorübergehend zu untersagen". Der Entwurf liegt der FTD vor.

Der Kommission geht es um Staaten, die über Finanzhilfen verhandeln - etwa Gelder aus dem EU-Rettungstopf EFSF oder vom Internationalen Währungsfonds (IWF). Ein Verbot könne verhindern, dass ein Rating in einem "unangebrachten Moment" kommt, "mit negativen Folgen für die Finanzstabilität des Staates und möglichen destabilisierenden Effekten auf die Weltwirtschaft", heißt es im Entwurf.

Spiegel Online has the English version of the story:

European Internal Market Commissioner Michel Barnier is considering a move to ban the agencies from publishing outlook reports on EU countries entangled in a crisis, according to a report in Thursday's issue of the Financial Times Deutschland newspaper.

In an internal draft of a reform to an EU law applying to ratings agencies obtained by the paper, Barnier proposes providing the new EU securities authority, the European Securities and Markets Authority (ESMA), with the right to "temporarily prohibit" the publication of forecasts of a country's liquidity.

The European Commission is particularly concerned about countries that are negotiating financial aid -- for example from the euro rescue backstop fund, the European Financial Stability Facility (EFSF), or the International Monetary Fund (IMF). A ban could prevent a rating from coming at an "inopportune moment" and having "negative consequences for the financial stability of a country and a possible destabilizing effect on the global economy," the draft states.

Now I hope very much that such a thing would be illegal under the European Convention for Human Rights, but I'm less than entirely convinced. Let's look at some relevant precedents, bearing in mind that I don't see how the ban could be struck down on proportionality grounds:

• Casado Coca v. Spain, 26 January 1994: A Spanish ban on professional advertising for attorneys upheld. The Court holds that "rights of others" is a sufficient justification.
• VgT Verein gegen Tierfabriken v. Switzerland, 28 June 2001: A Swiss blanket ban on political advertising on TV is held to be in violation of the Convention. The Court holds that the "rights of others" are an appropriate justification.
  
• Stambuk v. Germany, 17 October 2002: A fine on a German ophthalmologist for violating the advertising ban struck down on the grounds that the penalty was disproportionate. The Court approved of the aims of "rights of others" and "public health".
• Murphy v. Ireland, 10 July 2003: An Irish ban on religious advertising on TV and Radio is upheld. The Court holds that "rights of others" and "public order and safety" are sufficient justification.
• TV Vest As & Rogaland Pensjonistparti v. Norway, 11 December 2008: A Norwegian blanket ban on political advertising on TV is held to be in violation of the Convention. The disagreement did not concern the appropriateness of the "rights of others" justification, but only the proportionality question.

Preliminary conclusion: the justification is almost never the problem. Instead, the Court will normally look at the case most critically under the heading of "necessary in a democratic society". In my estimation, it is almost unthinkable that the Court would interfere with a law in an area so obscure (to them) and non-political (to them) as ratings agencies, at least not under this proportionality analysis. After all, this law is necessary to stop the heavens from falling down on us...

Mustafic II

Over on the blog of the European Journal of International Law, Tom Dannenbaum has started a series of posts about the Dutch Court of Appeals' Mustafic and Nuhanovic rulings: Part 1, Part 2,

This Week in Luxembourg

This week’s Grand Chamber news:

The main holding in Realchemie is easy enough: “The concept of ‘civil and commercial matters’ in art. 1 of Regulation 44/2001 [includes] a decision of a court or tribunal [imposing] a fine in order to ensure compliance with a judgment given in a civil and commercial matter.”

Also, the Grand Chamber handed down the first of two cases about the border between legislative and administrative functions. In this case, the problem is the Walloon legislature venturing dangerously close to administrative actions by ratifying administrative decisions regarding certain infrastructure projects. What does that decision mean for the rights of affected persons under the Aarhus Convention and other environmental law? The Court follows AG Sharpston, more or less, and takes a substance over formality approach. Boxus et al. v. Région wallonne

Finally, there is the case of Brüstle v. Greenpeace, regarding the interpretation of art. 6(2)(c) of Directive 98/44. When that provision says that “uses of human embryos for industrial or commercial purposes” cannot be patented, what is and is not a “human embryo”? Does that include various kinds of stem cells? And what about scientific research? To my untrained eye, it seems as if the Court gives a fairly expansive answer to these questions, i.e. bad news for the promotion of medicine and science. Cf. bbc.co.uk, EurActiv, EUObserver

UPDATE: There's a longer analysis of this case on the great new EU Law blog Eutopia law.

In other news:

In environmental law, the 4^th Chamber asked nicely whether Northern Ireland would please create some kind of functional separation between the agency drafting the plan and the agency that is consulted under art. 6 of Directive 2001/42 for the purposes of preparing an environmental impact assessment. Department of the Environment for Northern Ireland v. Seaport (NI) and others

The bankruptcy case of Interedil is mostly interesting for its procedural manoeuvring. Since it arises in the area of JHA pre-Lisbon, the Commission wondered whether a court against whose judgement a national appeal was available could ask a prejudicial question. The Court replied that the current jurisdictional rule applies, meaning that the questions are in. There was also a Rheinmühlen/Elchinov issue, where the Court simply repeated its earlier statement: a national appeals court cannot stop a lower court from asking a prejudicial question.

AG Mazák looked at the Market Economy Investor Principle, specifically as applied to the behaviour of the French state as sole shareholder of Électricité de France. The Commission thought it was unlawful state aid (part 1 and part 2, both dated 16 December 2003). The Court of First Instance annulled parts of that decision (NL, DE, FR). The AG now sides with the Commission on all of its grounds for appeal, and is actually quite critical of the CFI in doing so. For this reason, he proposes renvoi. Let’s see what the Grand Chamber says. Commission v. EDF et al.

AG Cruz-Villalón proposes that the Court should sign off on an Italian law (art. 392 CPP) which aims to protect minor victims of crimes against themselves by not giving them the right to be heard during the pre-trial phase that is accorded to adults under Framework Decision 2001/220, including the fact that such minors cannot appeal the prosecutor’s decision not to let them testify at that stage. The AG argues that the Framework Decision leaves the Member States ample freedom to decide on details such as this. X v. Y (NL, DE, FR, IT)

AG Sharpston has another Dutch Turkish free movement of workers case, and again the Dutch lose. Her conclusion is simple enough to quote: “Article 7 of Decision No 1/80 of the EEC-Turkey Association Council (…) must be interpreted as meaning that the family members of a Turkish worker duly registered as belonging to the labour force of a Member State may continue to invoke that provision notwithstanding that that worker has acquired the nationality of the host Member State while retaining his Turkish nationality.” Joined cases of Kahveci and Inan

Finally, I have a question: Even though the work of ratings agencies is not protected as free speech in Europe like it is in the US, how can this possibly be legal? “The Financial Times Deutschland on Thursday (20 October) disclosed plans by EU single market commissioner Michel Barnier to allow Esma, a new Paris-based EU financial supervisor set up in 2011, to impose "temporary" bans on agencies such as Fitch or Moody's from publishing sovereign debt ratings at critical moments.” Source: EUObserver

This Week in Luxembourg

Another big win for airline passengers. A flight is also cancelled if it takes off but returns to its origin, and the “further compensation” of art. 12 of Regulation 261/2004 may – depending on national law – include non-material damage. The only down side is that art. 12 may not be used as a basis for awarding such damage in case of a failure of the air carrier to comply with art. 8 and 9, which deal with reimbursement or re-routing and the right to care in case of delay or cancellation, respectively. Sousa Rodríguez et al. v. Air France

In the Postal Sector, Belgium is allowed to mandate an external scheme for dealing with customer complaints even for postal companies not subject to a universal service obligation. Express Line

In the state aid case of Deutsche Post and Germany v. Commission, the 3^rd Chamber annulled the General Court’s decision declaring the applicant’s case inadmissible. As it turns out, a Commission decision under art. 10(3) of Regulation 659/1999 requiring the Member State to produce information for the purposes of a state aid investigation is open to challenge before the Community Courts, both by the Member State in question and by the recipient of the aid.

In Prism Investments, the 4th Chamber held that the list of grounds for refusal of recognition of a judgement from another Member State (art. 34 and 35 of Regulation 44/2001) is exhaustive. In this case the defendant/appellant argued that the judgement had already been complied with in the MS of origin, but according to the ECJ that is not a valid reason for refusing recognition.

As one might expect, the Court did not look too kindly on a selective distribution agreement that had the practical effect of banning internet sales in certain areas. However, partly because the case came to the court as a prejudicial question, there are still a few ways in which the agreement can be saved. Pierre Fabre Demo-Cosmetique v. Président de l’Autorité de la Concurrence

The Association belge des consommateurs test-achats, of discrimination in insurance premiums fame, lost in an interesting judicial review of mergers decisions case. The General Court ruled that they were not entitled to protect their procedural rights under art. 11 of Regulation 802/2004 by asking for judicial review of the Commission’s decision not to object to the takeover of Segebel by Electricité de France, because they had not sufficiently availed themselves of those rights in the pre-decision phase. Association belge des consommateurs test-achats v. Commission

While last week the General Court reviewed the Commission’s treatment of an Italian raw tobacco cartel, this week the raw tobacco comes from Spain. Compared to the original decision from 2004, Agroexpansión (FR) and Alliance One both ended up paying somewhat less, because of some extra credit for cooperation and some confusion about the period for which they could be considered as a single economic unit.

P.S. the archive of these emails is here.

This Week in Luxembourg

This week there are two very cool Grand Chamber cases:

On Tuesday, the Court agreed with AG Kokott that the Premier League is not allowed to re-establish national borders for its satellite decoders. If Mrs. Murphy, pub owner in Portsmouth, wants to use a Greek decoder because they’re cheaper, she can. Football Association Premier League and Others Cf. bbc.co.uk.

On Thursday, AG Kokott released her opinion in the Grand Chamber case of Air Transport Association of America and others concerning the question whether the airlines will have to start handing over emissions credits while they’re still on the runway in San Francisco (instead of only when they’re flying over EU territory). I am in no position to judge the AG’s conclusion saying that the directive is compatible with the Chicago convention, but call me sceptical about her conclusion that it is not unlawfully extraterritorial.

The 8^th chamber had two food hygiene cases under Regulation 852/2004, taking a relatively relaxed approach in both. In Astrid Preissl they ruled that no high-tech specially devoted basin for cleaning hands was necessary, while in Albrecht and Others they were not overly concerned with the possibility that in a self-service bakery a potential purchaser might have touched or sneezed upon the foodstuffs.

In Graf and Engel, two Swiss citizens again suffered the consequence of not being European citizens. In limited circumstances, Austria is allowed to object to a lease of agricultural land.

The wheels of justice are moving slowly. In 1994, Italy created a scheme of state aid, which was judged unlawful by the Commission in 1999, a decision that was upheld by the General Court in 2008, which was in turn upheld by the Court of Justice in June 2011. Now, Italy is back before the ECJ again because they have not complied with the Commission’s decision yet. (It was not suspended pending examination by the courts.) Commission v. Italy (FR, IT)

In the anti-dumping case of GLS (NL, DE, FR), the Commission was a little bit (too) lazy when it came to determining the normal value of citrus fruits imported from China, where there is no “normal price” since it is not a functioning market economy. As a result, AG Bot recommends that Commission Regulation 642/2008 should be annulled.

In the Italian raw tobacco cartel case, three companies appealed to the General Court. One (IT, FR) received a reduction in its fine because the Commission failed to prove it had been part of the cartel for the full period claimed, one had its case dismissed because it had gone bankrupt in the meantime, and one (IT, FR) simply lost.

P.S. the archive of these emails is here.

Supervising ProRail

Despite the concerns of my committee, it turns out that my dissertation is of immediate practical relevance. Behold my proposition 5:

Neither liberalisation nor privatisation requires the use of private law instruments such as contracts and standard company types, such as standard-form public limited com-panies. Carefully designed public law instruments such as concessions and statutory companies should generally be preferred.

This was my very understated way of asking why it is necessary to turn infrastructure managers like ProRail in the Netherlands or Network Rail in the UK into private law companies if there is no intention of freely floating their shares. Based on my research into the New Institutional Economics, I could see no way that a company unrestrained by either market or hierarchy would not run amok. Since these INFRACOs clearly do not compete against each other or against potential entrants, they need to be restrained by hierarchy, i.e. by the government. The best way to do that is to create a public law company, where the government can be given whatever control rights it needs to get the job done. The fact that ProRail's Articles of Incorporation give the government some unusual rights as well is not enough. That, in a nutshell, is what I would have said had I been called upon to defend this proposition. But I wasn't.

Now, not even a month later, the Dutch Court of Auditors has published a report that is beyond damning for the Minister for Infrastructure and her ministry. Essentially, she has no institutional capacity and no interest to supervise what ProRail does with its budget of € 2 billion per year; the Ministry has exactly 2,5 fte to look after the spending of all that money. Specifically, the problem is that ProRail seems to decide all on its own - or at least without asking the Minister - whether the entire budget for a given year should be spent or whether it would be better to save some of it for another year, which explains why things like network-wide ERTMS are still a distant dream.

Other sources:

NRC Handelsblad, 3 October 2011, 'Schultz heeft geen grip op ProRail en informeert Kamer onvolledig'

Algemene Rekenkamer: ProRail's use of railway budgets (English summary)

Seselj

This is fun: If Kadi and other victims of the UN Terror Watch List can get judicial review in EU courts, what about Vojislav Seselj? While I do not think that his 8,5 years of pretrial detention are excessive, it is interesting to speculate whether there would be any remedy if it were. Understandably, the ICTY and its prosecutor take the view that the tribunal is not bound by the ECHR (link, in Dutch), but then, so did the EU Council in Kadi. That did not stop the ECJ from ignoring the plain text of art. 103 UN Charter:

In the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligations under the present Charter shall prevail.

Here, the conflict would not be with the EU Treaties, but with the European Convention for Human Rights. Now clearly, the ECHR is not a "basic constitutional charter" the way the EU Treaties are. (Kadi, par. 281) There is no question that the ECHR is an international agreement, even if one would like to fib about the question of whether the EU Treaties are.

However, that is not the end of the story. Because the Kadi judgment, it seems to me, reflects another underlying assumption. After all, even if the EU Treaties are so "constitutional" that they have established "a new legal order of international law" (Van Gend & Loos), that still does not change the fact that UN Security Council resolutions are presumptively binding on the EU and its Member States. At the EU level, however, there is a functioning system of judicial review. Kadi again:

285 It follows from all those considerations that the obligations imposed by an international agreement cannot have the effect of prejudicing the constitutional principles of the EC Treaty, which include the principle that all Community acts must respect fundamental rights, that respect constituting a condition of their lawfulness which it is for the Court to review in the framework of the complete system of legal remedies established by the Treaty.

Under Dutch law, however, treaties (including the UN Charter) trump the Constitution:

Article 94
Statutory regulations in force within the Kingdom shall not be applicable if such application is in conflict with provisions of treaties that are binding on all persons or of resolutions by international institutions.

(Despite the unfortunate translation of the term "wettelijke voorschriften", this provision applies to the Constitution itself as well. This follows from art. 91(3), which establishes an extra-difficult ratification procedure for treaties that conflict with the Constitution.)

So if Seselj brought the Dutch equivalent of a Habeas petition, the court would simply reply that his detention is lawful because it is pursuant to a Security Council resolution (Resolution 808, to be precise). Which leaves only one question: If this Dutch judgement were appealed until all national remedies were exhausted, and followed by an appeal to the ECtHR in Strasbourg, what would the Strasbourg court say? Would they be prepared to impose a damages award in these circumstances?

Today in Luxembourg

Mr. Donner may want to pay attention to this one: The Netherlands again lost a case about a Turkish worker. They tried to retroactively withdraw someone’s residence permit because he was no longer in compliance with the grounds upon which it was issued (i.e. he no longer lived with his partner), even though there was no suggestion of fraud. The ECJ now says that they can’t do that. As usual, Decision 1/80 is on p. 155 here. Unal v. Staatssecretaris van Justitie

Two of the culprits in the Monochloroacetic Acid cartel appealed the General Court’s decision to uphold their fine to the ECJ. Arkema lost, but Elf Aquitaine hit the jackpot, saving it a € 45 million fine. (NL, DE, FR) The offending behaviour should not have been ascribed to Elf Aquitaine.

AG Jääskinen argues that the Polish law on medicinal products violates Directive 2001/83 because it is too restrictive when it comes to the placing on the market of medicinal products without a marketing authorisation. Commission v. Poland

Ryanair won before the General Court today in its attempt to do something about alleged state aid given by the Italian state to Alitalia, Air One and Meridiana. The General Court held that the Commission should have adopted a formal decision on Ryanair’s complaint. Ryanair v. Commission

P.S. the archive of these emails is here.

Holder in Brussels

To the undoubted delight of everyone and anyone in the European Parliament, US Attorney-General Eric Holder was in Brussels for an exchange of views with the LIBE Committee last week. In the presence of the AFET Committee and the EU-US delegation, the Committee spoke with the AG about privacy. (The meeting actually took place in the József Antall building, where I've never been because they were still building it when I was in Brussels in 2006.)

For those who want to know more about the topic, the video is here and the AG's introductory remarks are here.

Personally, I am simply rejoicing at the thought of all those proud MEPs sitting there posing stinging questions to the Attorney-General, such as Carmen Romero (S&D, ES), who explained that "[her] impression is that in the US privacy is a kind of conditional right". Also, imagine the astonishing amount of doublethink involved in talking for an hour and four minutes without ever admitting that Americans and Europeans simply mean completely different things when they talk about "privacy rights". Such doublethink allowed the AG to say things like "each of our systems protect civil liberties - including privacy - effectively, but in our own ways". (Cf. EP Press Release)

In the US, privacy is about what people are allowed to ask when. In the EU, privacy is about what people are allowed to do with your data after they've asked. Completely different things...

Yesterday in Luxembourg

In the category “fun with international relations and television”, there is a Kurdish TV station operating out of Denmark that upsets Turkey enough to upset Germany as well. What can Germany do? Does Directive 97/36 prevent Germany from going after this TV station the way it would if it were an entirely German matter? The ECJ decides to stick propaganda for the PKK under “incitement to hatred” (cf. art 22a of the Directive), but makes the proviso that Germany can’t prevent the TV station from broadcasting in Germany altogether. Mesopotamia Broadcast and Roj TV v. Germany

Personally, I think the Commission’s entire approach in the Belgian La Poste state aid case is a bit odd, given how they combine different wrongs to make a right (cf. par. 12-20). General Court, however, simply annulled the decision because of flaws in some of the individual steps (case T-388/03), and Belgium’s appeal is now rejected by the ECJ. Belgium v. Deutsche Post

AG Trstenjak has the case that we all knew was coming ever since the ECtHR ruled in M.S.S. v. Belgium and Greece (cf. StrasbourgObservers). The AG proposes that the Court should essentially follow Strasbourg, meaning that the UK can’t just ship all asylum seekers back to Greece like they would to any other EU Member State. Note also the analysis of Protocol No. 30, the one that exempts the UK and Poland from the EU Charter of Fundamental Rights. N.S. v. Secretary of State for the Home Department

In Interflora, the 1^st Chamber goes over the Google Adwords case law again. I’m not sure if that part about dilution was always there, though.

Another Bud ruling! This week, we turn to issues of acquiescence and similar “they did nothing for decades” arguments. Budějovický Budvar, národní podnik v. Anheuser-Busch Inc.,

P.S. the archive of these emails is here.

This Week in Luxembourg

The most important news this week is that my beloved Grolsch was acquitted – I suppose we can say – of involvement in the Dutch beer cartel (NL). The General Court found the Commission’s evidence wanting. Grolsch v. Commission (NL, DE, FR)

This week, the Grand Chamber handed down its age discrimination for pilots judgement. In Prigge et al. v. Deutsche Lufthansa, it found that mandatory retirement at 60 is not proportionate to the aim pursued, thus violating art. 4(1) of Directive 2000/78, nor is airway safety a “legitimate aim” in the sense of art. 6(1) of that Directive.

In the electricity sector, the Commission lost a fascinatingly complex infringement case against Slovakia. The Commission had alleged that Slovakia had failed to fulfil its obligations under Directive 2003/54 on the internal market for electricity by keeping in place a private law contract between its state electricity company and a Swiss company that predated accession, giving the Swiss preferential access to part of the network. Like the AG, the Court concluded that the contract – and the 1990 treaty on which it was based – should be protected under art. 307 EC. Commission v. Slovakia

Germany appealed the judgement of the General Court upholding the decision of the Commission that the rollout of digital TV in Berlin-Brandenburg involved unlawful state aid. Unfortunately, at least for Germany, the 6^th Chamber agreed with all those before it. A quick glance suggests that the main problem was whether the aid in question distorted the market unreasonably. Germany v. Commission (DE, FR)

In the Spanish case of Gueye, the ECJ held that an automatic injunction requiring a convicted criminal to stay away from the victim is consistent with Framework Decision 2001/220 even when the victim opposes it. Likewise, Spain is permitted to rule out mediation regarding certain kinds of criminal offenses committed within the family.

Let’s take a moment to consider holding no. 1 in Dickinger and Ömer: "European Union law, in particular Article 49 EC, precludes the imposition of criminal penalties for infringing a monopoly of operating games of chance, such as the monopoly of operating online casino games laid down by the national legislation at issue in the main proceedings, if such legislation is not compatible with European Union law." Say what? Anyway, otherwise it is a fairly straightforward online gambling case.

As one might expect, when art. 16(1) of Directive 2004/38 (the free movement directive) talks about lawful residence, the law in question is not only EU law. At least, that is the conclusion of AG Bot in Ziolkowski et al. v. Berlin (NL, DE, FR). Residence prior to the home country’s accession also counts, as does any other residence that is lawful under the law of the host nation.

AG Mazák ponders how you can tell whether goods being imported from ACP countries are actually Chinese. There are limits to OLAF’s powers of investigation, at least outside the Union Territory. Also watch out for some legitimate expectations creativity. Hauptzollamt Hamburg-Hafen v. Afasia Knits Deutschland GmbH

P.S. the archive of these emails is here.

Rawagedeh (II)

A second big whopper in today's Rawagedeh ruling comes up when we get to the question of limitations. By what logic can you still sue over something that happened in the 1940s? In this section, the government initially scores win after win. Because Dutch law applies, the court brings in the old Statute of Limitations (1924), which included a special set of rules for debts owed by the government. Since the term set by that statute is five years from the moment the debt arose, it should be an open and shut case, right?

Wrong. Under Dutch law, old and new (i.e. old civil code, which applies to this case, and the post-1992 new civil code), there is such a thing as a general obligation of good faith. That means that the court can decide that in certain extreme conditions it would be unequitable to apply the limitations period. (To be precise, it would be lacking in good faith for the defendant to rely on this argument.) The question is whether this situation qualifies.

In the past, the Supreme Court has allowed such "equitable tolling", as it would be called in the US, in a few cases. For example, it is a bit harsh to apply the limitations period to damage caused by an unlawful government decision if such a case cannot be brought in the first place until the administrative courts have annulled said decision. Similarly, the starting date of the limitations period should reasonably be moved up in cases where the damage is hidden. But in this case the problem isn't that the plaintiffs couldn't bring the case, but that for whatever reason they didn't.

Nevertheless, the court lists a number of factors that might reasonably suggest that the usual reasons for having a limitation period do not apply here very much. For example, the state accepts the plaintiff's version of events, so there is no major dispute as to facts and no need for serious quantities of evidence. And for some reason that I won't claim to comprehend the State gets blamed for sitting back and doing nothing all these years. Then the State's continued activity with World War II debts gets dragged into it to show that the State "has not yet closed the book on this era". Etc. All of which is well and good, but none of which explains why this situation is just as extreme as the ones already approved by the Supreme Court, which seems to me to be the relevant question.

The plaintiffs actually made a second argument, which might have gone a long way towards making the court's case. They argued that equitable tolling is required here because applying a limitations period would violate fundamental human rights, etc. This argument is a little wobbly, because the ECHR does not directly apply here both because of time and because of place, but in general terms it might work. If the case concerns something as serious as a war crime, a limitations period might not be appropriate. However, such a decision would require an explanation as to why the court should claim the right to make that decision itself, rather than basing its decision on a statute or treaty. (None being available.)

Moreover, it is a bit of a strange argument, since it puts the cart before the horse. After all, it involves basing the court's willingness to investigate a case on the seriousness of that case. That is fine here, since there is no material dispute as to the facts, but if that were different, the result would be that the court is basing its decision regarding the limitations period only on the facts as stated by the plaintiff. And that can't possibly be good policy, regardless of whether you would allow the court to later change its mind again.

And just as icing on the cake, the court decides - because it feels like it - that the wives of the victims and the plaintiff no. 8 (who was an actual victim) may sue, but that the limitations period stays in place for the other plaintiffs, because they weren't sufficiently closely connected to the events. Yet more mixing up of merits and limitations...

Rawagedeh (I)

The ruling by the Court of First Instance in The Hague about the war crimes in Rawagedeh (Indonesia) in 1947 is fascinating on many levels. As I read on, I'll blog about some of the highlights.

To begin with, there is the problem of International Private Law: Which system of laws applies to this alleged tort? The law used to decide that is the Dutch PIL statute for torts, the WCOD. (Lest this become an everlasting regression, the rule is that you use the Private International Law statute of the forum.) However, the WCOD has only been in force since 2001, and does not as such work retroactively. Hence the first cheat: the court decides - correctly - that the statute more or less codified pre-existing law, and then concludes that that is enough to make it applicable to a tort committed in 1947. That last step seems a little dodgy to me. I'm willing to accept that the rules codified in the statue already existed in the 1990s, or even 80s, but in the 1940s? Can we see some case law for that?

Then we get to the big problem: art. 3(1) WCOD declares that the lex loci delicti rule applies. The law of the state where the tort was committed is applied to the case. However, in this case, the alleged tort was committed in the Dutch East-Indies, a state that was at the time distinct from the Netherlands (Kingdom in Europe), and which hasn't existed since December 29, 1949. Now it need not be a major problem to apply the law of a state that no longer exists, but the court thinks that applying the law of a country that hasn't existed for more than 60 years would be pushing it. Which brings us to the next question:

If not the law of the Dutch East-Indies, which law should it be? Logically, it would have to be the Netherlands (Kingdom in Europe) or Indonesia. Since the perpetrators of this crime were Dutch military personnel carrying out orders of the Dutch colonial government in what was, at the time, part of the Kingdom of the Netherlands, the court argues that the case is more closely connected to the Netherlands than to Indonesia.

This seems, to put it mildly, a curious conclusion. One might just as easily argue that the case is more closely connected to Indonesia, the successor state to the Dutch East Indies, the state of the victims, and the state that claims to have existed since 1945, or barring that since the 1946-7 Linggadjati Agreement.

Paradoxically, it is the Indonesian plaintiffs who benefit from this conclusion. After all, we might assume that Indonesia does not have the kind of stringent war crimes legislation that the Netherlands has. Although presumably they have a civil law wrongful death tort, under Indonesian law there would probably be more scope for a "following orders" or "military necessity" defence.