Lancer de Nains

Since I don't have anything else to write about (there's not much going on in the world, even in Luxembourg they're only doing a few boring cases, like this balloon flight case, which for some reason was considered worthy of the Grand Chamber), I thought I'd take a moment to fix a shortcoming of my post on the Conseil Constitutionnel's decision on the burqa ban last year. One of the precedents they relied on to find that the burqa ban was in compliance with the French constitution (though not necessarily with the ECHR, which is a question that was not before them), was the dwarf tossing case of the Conseil d'État from 1995.

In real-world terms, it suffices to quote wikipedia in order to establish the epic awesomeness of the concept of tossing dwarves:

Dwarf tossing is a bar attraction in which dwarfs wearing special padded clothing or Velcro costumes are thrown onto mattresses or at Velcro-coated walls. Participants compete to throw the dwarf the farthest.

For more details see this blog post, or skip straight to this Youtube video.

It is obvious how all of this can lead to headaches for the participants (faulty landings, too much beer, etc). But it has been causing problems for lawyers as well, at least for those lawyers looking to ban the practice. After all, there is such a thing as freedom of contract, even if it isn't always easy to find an explicit legal basis for it.

US Constitution, Amendment XIV:
nor shall any State deprive any person of life, liberty, or property, without due process of law (cf. Lochner, of course)

EU Charter of Fundamental Rights, article 15(1):
Everyone has the right to engage in work and to pursue a freely chosen or accepted occupation.

Déclaration des Droits de l'Homme et du citoyen de 1789, art. 4:
La liberté consiste à pouvoir faire tout ce qui ne nuit pas à autrui.

Art. 5:
La Loi n'a le droit de défendre que les actions nuisibles à la Société. Tout ce qui n'est pas défendu par la Loi ne peut être empêché, et nul ne peut être contraint à faire ce qu'elle n'ordonne pas.

Preamble of the Constitution of 1946, art. 5:
Chacun a le devoir de travailler et le droit d'obtenir un emploi.

German Basic Law, art. 2(1):
Jeder hat das Recht auf die freie Entfaltung seiner Persönlichkeit, soweit er nicht die Rechte anderer verletzt und nicht gegen die verfassungsmäßige Ordnung oder das Sittengesetz verstößt.

Art. 12(1):
Alle Deutschen haben das Recht, Beruf, Arbeitsplatz und Ausbildungsstätte frei zu wählen. Die Berufsausübung kann durch Gesetz oder auf Grund eines Gesetzes geregelt werden.

Obviously, all of these provisions allow for certain contracts and certain kinds of employment to be forbidden. Even in the most libertarian society, some contracts are forbidden. However, these are usually contracts that do some kind of clearly discernible harm to third parties, such as the contract to assault a third which was the subject of my (also) beloved Allen v. Rescous (1676). This is obviously the situation contemplated by art. 4 of the Declaration of 1789. Art. 2(1) of the German basic law, on the other hand, contemplates limitations based on the Sittengesetz as well, which is potetially much wider. In general, though, it is safe to say that the idea of forbidding a certain practice because people think it is yuckie makes most jurists distinctly uneasy.

In the US, we see this debate in the two main cases on discriminatory laws against gays: Romer v. Evans (1996) and Lawrence v. Texas (2003). The Jackpot phrase is in the former:

[The] sheer breadth [of the law in question] is so discontinuous with the reasons offered for it that the amendment seems inexplicable by anything but animus toward the class it affects; it lacks a rational relationship to legitimate state interests. (per Kennedy J, for the majority)

As Justice Scalia notes in his dissent, this seems to suggest that:

Coloradans have been guilty of “animus” or “animosity” toward homosexuality, as though that has been established as un-American.

Even though the later case of Lawrence wasn't so straightfoward in its rejection of anti-gay "animus", lower courts have generally required some rational basis beyond moral disapproval for anti-gay laws to be upheld. (Eg. the best US ruling on same-sex marriage to date, the Iowa Supreme Court case of Varnum v. Brien.) Mere animus is not a legitimate state interest.

So where does that leave dwarf tossing? Well, the facts are that this practice occurs with the full consent of all involved, including the dwarves, and that there seems to be no viable argument that it hurts any third party. As far as I am concerned, that should settle the matter; dwarf tossing should be legal. And yet, in a number of jurisdictions, attempts were made to ban it. In France, the matter went all the way up to the highest administrative court, the Conseil d'État, which overruled the lower court and held that the Mayor of Morsang-sur-Orge had not acted ultra vires in banning the practice of dwarf tossing within his commune, since it was within the ambit of art. L131-2 of the Code des Communes:

La police municipale a pour objet d'assurer le bon ordre, la sûreté, la sécurité et la salubrité publique.

The argument was that these dwarf tossing events were a violation of the public order, because apparently that notion includes respect for human dignity as well as the more common goals of public safety, etc. The analyse, provided by the Conseil d'État to help readers make sense of its typically terse judgement, refers to a number of precedents that support this wider interpretation of bon ordre, dealing with such issues as prostitution, bathing attire on the beach and the inscriptions on grave stones, all of which are indeed traditional areas of regulatory concern. In so deciding the Conseil d'État emphasises that human dignity is in fact a value of constitutional concern, citing art. 3 of the ECHR as well as a precedent of the Conseil Constitutionnel to that effect. (This may be so, but it surely doesn't follow that just because the constitution forbids the government from doing something, it also authorises the government to forbid private citizens. There are many things that citizens are allowed to do but governments may not.)

The final paragraph of the Conseil's "analyse" gets to the heart of the matter. It states that under this precedent public order is more than something that is "material and external". However,

Il n’a toutefois pas consacré la moralité publique comme une composante de la notion d’ordre public, se gardant ainsi d’interpréter trop largement les pouvoirs de police de l’autorité administrative.

Concern for human dignity may authorise government intervention, but public morality does not. Whatever that means...

Vreeman rapport on the Dutch Postal Market

For some reason that entirely mystifies me, the State Secretary for Economic Affairs, dr. Henk Bleker (CDA), asked a Labour politician to examine the problems in the postal market. To the surprise of absolutely no one, the answer was that the market needed more regulation.

Dr. Ruud Vreeman is a former chairman of the Labour party, former Labour MP (when he was the only Labour MP to vote against the privatisation of the health insurance system) and former mayor of several cities, including Tilburg. Even his dissertation was about the work of labour unions ("Vakbondswerk en de kwaliteit van de arbeid", "Labour unions and the quality of labour"), so it is not surprising at all that his analysis of the postal market very much supports their position in their conflict with the postal companies.

None of this introductory informations should be taken - of course - as some kind of ad hominem attack on the rapport in question. After all, there is plenty wrong with it without the need to resort to cheap retorical tricks.

A little history: The Dutch government was relatively early in privatising the state postal and telecom company PTT, making it a private enterprise as of 1 January 1989, and floating 30% and 25% of the shares in 1994 and 1995, respectively. This allowed the newly renamed KPN to acquire the Australian express company TNT in 1996, and to split itself in two in 1998. The telecom company is still called KPN, while the postal company became known as TPG, and since 2005 as TNT. (Cf. the company's own history page.) As a result, the Dutch postal market, despite its relatively modest size (5,3 bn pieces of adressed mail in 2008), has an enormous incumbent. (The 2009 Annual Report shows a revenue of € 10,4 bn for a net profit of € 248 million. Market leader DHL/Deutsche Post had € 46,2 in revenue and € 693 in net profit.)

But none of this financial fire power helped TNT to hold on to the Dutch postal market altogether, once it was opened up step-by-step in 2000, 2006 and 2009. (Directive 2008/6 requires full liberalisation as of 1 January this year.) While it is expected that TNT will continue to be the Altmark-style universal service provider for the indefinite future (cf. art. 22 of the Directive), it has already lost 10-20% of the addressed mail market, 20-25% of the Direct Mail market and 40-45% of the market for magazine deliveries.

None of this would appear to be a bad thing, but leave it to the Dutch political system to find the rain cloud next to the silver lining.

The problem is with the mail carriers. Not unexpectedly the new entrants in the mail market have attempted to keep their costs as low as possible. Given that labour represents at least 60% of the costs of mail delivery, that means avoiding as many taxes and social welfare levies as possible. Under Dutch law, the simplest way to do that is to offer the mail carriers a contract of assignment (Title 7 of Book 7 Civil Code) rather than a labour contract (Title 10 of Book 7). That way, all mail carriers become self-employed, uninsured against unemployment, health problems, etc. Cue screams from the labour unions in 3, 2, 1...

Their successful rent-seeking caused the government to demand that all postal companies should offer labour contracts to at least 80% of their mail carriers by 1 October 2012, the details to be worked out by Collective Bargaining Agreement. To encourage everyone to play nice, the Postal Services Act of 2008 and the relevant secondary law said that if no CBA were to be agreed, the postal companies would be requried to give labour contracts to all of the mail carriers. As it happens, a CBA was agreed, and it included a trajectory, fixing the percentages to be achieved at various dates. Tragically, the postal companies failed miserably to achieve even the first of these percentages, because only 3,2% of the people they offered a labour contract to, accepted. As it happens, the mail carriers rather liked the flexibility of a contract of assignment. (Which means, for example, that they're allowed to work for several companies at the same time, that they don't have to deliver the mail themselves, etc.) Because this was somehow the postal companies' fault, the labour unions withdrew from the CBA, meaning that technically the mandatory 100% employment contracts rule is in effect as of 1 January 2011.

Unfortunately, actually enforcing this rule would put all of TNT's competitors out of business. Hence the need for dr. Vreeman's rapport. He now suggests a wonderfully complex and almost certainly illegal cartel system, whereby companies that don't employ a high enough percentage of their mail carriers subsidise those of their competitors who do. All of which is apparently necessary in order to make the postal market "a regular sector where ordinary Dutch conditions of employment and employment relationships are dominant, and where there is a level playing field on the market." (p. 9)

Just a quick question: Apparently, the current situation isn't a level playing field. So who is currently holding the short end of the stick? The multi-billion postal giant TNT or its competitors who pay their mail carriers less?

The key word is actually on page 12, where Vreeman describes the goal of these reforms again: "The government can also contribute to a development towards a decent postal market in other ways." Decent... ("fatsoenlijk") Sadly, the "other ways" he suggests involve likely violations of public tendering law and something called "ex ante competition regulation" ("ex ante mededingingstoezicht"). A quick search indicates that what is meant is the kind of supervision the Opta, the Dutch regulator for post and telecom, already exercises in the telecom market, where companies with a dominant position (i.e. KPN) are given extra orders to play nice (cf. art. 6a.6 Telecommunicatiewet). I highly doubt, though, that dr. Vreeman intends to make TNT share its mailboxes, so what exactly he has in mind is unclear to me. Whatever it is, though, it is unlikely to be a good idea. (O, look, here's a motion from three Labour MPs from 2009 talking about the same thing. It was adopted without vote, so I'm not sure whether the VVD supported it. I can tell from the report of the debate that the SP, Groenlinks, the PVV and the CDA did.)

In the end, all of this is based on a faulty premise. A job as a mail carrier is currently a wonderfully flexible way for a student, a housewife or a senior citizen to make an extra buck. They can do it free of detailed instructions from any boss, for however many bosses they like, have someone else do it if they have a prior engagement, etc. (cf. p. 7 of the Vreeman rapport.) No wonder only 1 in 30 of them elected to have an employment contract when one was offered. Given that all of this is the free choice of everyone involved, why mess with it? What is the public interest? There are certainly no externalities that I can see. Instead, my feelings about this matter are best summed up by these lines from Reservoir Dogs. When Mr. Pink explains that he does not believe in tipping, Mr. White replies:

Waitressing is the number one occupation for female non-college graduates in this country. It's the one job basically any woman can get, and make a living on.

How nice it would be if there were at least one such job in the Netherlands as well...

European Communities v. Région de Bruxelles-Capitale

There are only a few ECJ cases this week, and only one that's even remotely interesting. In European Communities v. Région de Bruxelles-Capitale, AG Cruz Villalón discusses who gets to represent the European Communities before a Member State court in a simple procedure where one of the Institutions is involved in an administrative capacity. Specifically, the case deals with the town planning charge that the Council was asked to pay when it was granted planning permission to carry out the work on the Justus Lipsius building that they were doing when I was there in 2006. (Which meant that for the whole 5 months we had to enter the building through an improvised walkway, instead of through the monumental front entrance that they have now.)

The Council felt that this planning charge was a tax from which it was exempt under the Protocol on Priviliges and Immunities (now Protocol 7), so they litigated. Much ado later, they're arguing before the Belgian Council of State, which now wishes to hear who gets to speak on behalf of the EU/Council.

Art. 282 EC provided the start of an answer:

In each of the Member States, the Community shall enjoy the most extensive legal capacity accorded to legal persons under their laws; it may, in particular, acquire or dispose of movable and immovable property and may be a party to legal proceedings. To this end, the Community shall be represented by the Commission.

However, in practice things aren't actually that simple. As it happens, the Commission is accustomed to let each of the Institutions litigate for itself "in matters relating to their respective operation" (cf. art. 335 TFEU). This practice is now blessed by the AG, in anticipation of art. 335 TFEU which adapts the legal rule to the habits of the institutions:

(...) the Union shall be represented by the Commission. However, the Union shall be represented by each of the institutions, by virtue of their administrative autonomy, in matters relating to their respective operation.

The next problem is whether it matters whether the Commission's decision authorising the Council to represent itself in these proceedings names a specific natural person. Is it mandatory for a natural person to be named? And what are the consequences if subsequently a different person takes over? In this case, the Commission had named the Deputy Secretary-General, De Boissieu, but much of the subsequent litigation had been carried out by the head of the legal service, Piris. The AG argues, quite reasonably, that this is an internal matter of Council administration, that does not concern the Commission or the Belgian authorities. The Council will be represented by whomever it pleases. (par. 52)

Finally, the AG suggests an interesting obiter dictum, an answer to the second question posed even though strictly speaking no answer is necessary. (Since question one was answered in the affirmative.) He argues that it is not for the courts of the Member States to sort out these kinds of delegational issues between the Institutions:

57. (...) any review of an authority granted by the Commission to the Council comes within the exclusive jurisdiction of the Community courts, for any involvement in the matter on the part of national courts would constitute an unlawful encroachment on the autonomy of the European Union institutions.

58. For which reason, even if an authority is manifestly invalid, a national court cannot do other than refer the appropriate question for a preliminary ruling under Article 267 TFEU.

Google AdWords in the Netherlands

The first Dutch AdWords case is in, and it is curiously backwards compared to the ECJ's approach, because it views the problem almost entirely from a comparative advertising point of view. In Google France, the ECJ said:

70 It must be borne in mind, in that regard, that the Court has already held that the use by an advertiser, in a comparative advertisement, of a sign identical with, or similar to, the mark of a competitor for the purposes of identifying the goods and services offered by the latter and to compare its own goods or services therewith, is use ‘in relation to goods or services’ for the purposes of Article 5(1) of Directive 89/104 (see O2 Holdings and O2 (UK), paragraphs 35, 36 and 42, and L’Oréal and Others, paragraphs 52 and 53).

71 Without its being necessary to examine whether or not advertising on the internet on the basis of keywords which are identical with competitors’ trade marks constitutes a form of comparative advertising, it is clear in any event that, as has been held in the case-law cited in the preceding paragraph, the use made by the advertiser of a sign identical with the trade mark of a competitor in order that internet users become aware not only of the goods or services offered by that competitor but also of those of the advertiser constitutes a use in relation to the goods or services of that advertiser.

In the Dutch expedited procedure ruling of Tempur Benelux et al. v. The Energy+ Company of 20 December, however, the Court in the Hague starts by observing that this is certainly a case of comparative advertising under art. 6:194a of the Civil Code. (par. 4.3) It then cites some ECJ comparative advertising case law like O2, Toshiba and Siemens to shut down the plaintiff's argument that the use of its trade mark was unlawful per se (par. 4.4), before examining the details of defendant's use of the trade mark in light of this case law. Only there does the Judge cite the Google France case: to support the idea of confusion regarding origin as undermining the defendant's case for legitimate comparative advertising. In making this argument, the judgement relies more on the L'Oréal precedent that was also cited by the ECJ in Google France (cf. above) than on Google France itself.

Of course, much of the rest of the Tempur case is legitimately about comparative advertising, given that the plaintiff also objected to the manner in which the defendant compared their respective products on its website, but I would have thought that an AdWords case should be dealt with under the specific precedent that we have at our disposal for that situation, rather than under the general comparative advertising framework, even if the latter does arguably apply.