Gaming the system - Tendering Law

Here's an issue that I hadn't thought of before, but that has potentially serious implications for my work:

My research on trains tends to assume that public tendering can be arranged with a reasonable amount of efficiency all around. It may not always be a good idea, but the process itself is fairly idiot-proof. This confidence was seriously hurt today when I read a ruling by the Court of Appeals in Den Bosch, the Netherlands. In this case, the plaintiff wanted a tender result annulled on the grounds that the winning company had violated the terms of the tender by - put simply - gaming the system.

This is how the city of Helmond screwed up: they defined the financial side of the evaluation criteria (350 points out of 1000) based on three sub-criteria:

• one-off implementation costs: 150 points
• total annual costs over a period of 5 years: 150 points
• average hourly rate: 50 points

In each of these categories, the best offer was awarded maximum points, and the others were given fewer in proportion. Given this setup, the approach of the successful applicant was (or should have been) quite foreseeable: construct a bid that involves € 0,- implementation costs, thus assuring 150 points in that category, and stick the costs of implementation in with the ordinary annual costs instead. That way, the gain in category one will almost certainly exceed the loss in category two.

One of the losing bidders, Centric, sued, arguing that the city should have excluded this bidder because it was a "manipulative bid". The bidder and the city, on the other hand, argued that it was merely a "strategic bid", which was permitted. Ultimately, the Regional Court and the Court of Appeals sided with the city.

What fascinates me about this case isn't so much the ruling itself, which is based on the General Conditions of the tender and is therefore quite tedious (not to mention limited to these facts), but the sheer ineptitude of the city. Why did they not realise that this was the optimal strategy, given the formula chosen? Why did they not choose a formula based on total cost instead? If local authorities are this incompetent, perhaps it is better to let them run the local transport services in-house. That way, no one has much of an incentive to game the system, and if errors are still made, both the costs and the benefits of the error end up in the city's coffers.

Hat-tip: recht.nl and Banning Advocaten (in Dutch)

John Paul Stevens

While we're at it, let's take a moment to celebrate the awesomeness of retired-Justice John Paul Stevens

The Colbert Report	Mon - Thurs 11:30pm / 10:30c
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www.colbertnation.com
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(And yes, I do intend to go buy that book.)

What future for economics?

Martin Wolf writes on the Financial Times' The World blog (also known as Gideon Rachman's blog) about a forum he moderated in Davos, featuring several promiment salt-water economists. To summarise, he has 10 propositions about economics. Since I took the liberty of writing something on this topic in the introduction chapter of my dissertation, I thought I might comment.

1. orthodox economics had, in the years leading up to the crisis, become more a cult than a science, particularly with the assumption that what exists in competitive markets has to be the best possible outcome, since, if it were not, it could not exist. So, if crises are not predicted, it is because they cannot be: they are the result of unexpected shocks, by assumption.

Statements such as this I can only evaluate based on my undergraduate experience, given that my grad school days only started when the crisis was already almost upon us, and were spent in any event among Public Administration people, not economists. All I can do is recall that when I studied Finance & Banking in Groningen, we did spend quite a bit of time on the (heterodox) theory of Behavioural Finance, including the (relatively orthodox) theory of rational bubbles. (Orthodox because the model involves quite a bit of rationality.)

2. let a thousand flowers of thought bloom. There cannot be just one general model of the economy or just one approach to economics. Among the blooms discussed were behavioural economics, neuroeconomics, computer based modelling of processes over time. Participants recommended talking to political scientists and even sociologists. They also recommended looking at the causes of inequality, the economics of happiness, the role of institutions, the importance of culture, and the effects of power. Fortunately, economists are creative people. A great deal of imaginative stuff is going on.

This is where I put in my usual warning about the difference between interdisciplinary research and multidisciplinary work. Each of the social sciences should play to their strengths, and the idea that individuals optimise something within certain constraints is the key strength of economics. Individuals might have limited knowledge, limited computing ability, or they might care a great deal about the welfare of others, but there is a meaningful concept of utility that individuals optimise in some meaningful way. If we give that up, for example by taking on too many psychology-inspired notions of optimising, we end up like a car-boat, which, despite these pretty pictures, is not a very good car and not a very good boat either. Instead, each discipline should do what it is good at, while at the same time trying to figure out how to aggregate our results.

3. the sociology of the profession – the need to define and defend a core discipline that can be taught to students and so determines what it means to be an economist – militates against such heterodoxy. There is a fundamental tension here. But cross-disciplinary co-operation is one way of out.

This is true in every academic discipline. Without a core that can be taught to undergraduates, an area of research doesn't even deserve to be called a discipline. But then, I don't see the problem with economists teaching undergraduates the basics of utility- and profit maximisation under uncertainty in micro-economics, about IS-LM etc. in macro-economics and about Heckscher-Ohlin in international trade theory. As far as I know, that is still the basis of what we do.

4. human beings are not rational calculating machines. Their mood and approaches to decision making varies with the circumstances.

Straw man. No one in economics would dispute this. The point is simply that in many cases it can be useful to talk about them as if they are rational calculating machines.

5a. time matters in economic processes, which are, in general, not reversible and not characterised by any sort of equilibrium.

This one I can only agree with. My neo-institutional dissertation, above-mentioned, devoted a whole section to how the outcome we observe is supposed to move towards the optimum predicted by the theory, arguing that this is a serious weak point of both Williamson and Hart c.s. Later on, one of the "benchmark theories" I examined was (forum participant) Brian Arthur's path dependency, which has its own strengths and weaknesses, but which was valuable enough to earn a spot in my story.

5b. economics suffers from physics envy. It seeks to be an exact science, which is impossible.

Rubbish. People who make this criticism tend to be mistaken in two ways: First of all, physics is a lot more difficult than they think it is. There's more to it than Newtonian mechanics. Secondly, this "physics envy" is what drives us forward. While we should be cautious that we do not overdo it, and sceptical about the dominance of calculus in economics, physics envy as such is what has made economics superior to sociology, its 19th century sibling.

6. the world is not computable. It is far more sensible to think in terms of irreducible uncertainty than computable risk. This fundamental point made by John Maynard Keynes was lost in the subsequent so-called “neoclassical synthesis”.

I would have added Frank Knight's uncertainty/risk distinction, but OK. Absolutely agreed. This is why I used some of my afore-mentioned introductory chapter to advocate for modesty on the part of economists. Our work only describes one aspect of society, and even then we tend to overlook the uncertainty that surrounds us.

7. being a study of complex human behaviour, in which the world is created by human understand and motivations, economics is hard.

Indeed. And physics is hard, too.

8. in theory it is right and proper to abstract in order to focus on a specific phenomenon. In addressing policy, this is irresponsible. Policy must be informed by an understanding of everything that might bear on the problem in front of one. This makes economic policy really hard to do well.

Like I said, economists should focus on what they're good at. When they're done, they should combine their results with everybody else's. Only then can you make policy recommendations. Failure to do so makes the theoretical basis of the recommendations dangerously narrow, and has a tendency to ignore the is/ought distinction. Unless they are checked by other disciplines, economists have a dangerous tendency to equate efficiency with desirability.

9. even though economists get much wrong, they still have much to offer to non-economists who tend to assume that economic problems are far more simple than they actually are.

Amen. I would only add that more often than not, the contribution that economists make is to show that problems are simpler than they are perceived to be. Economists are good at cutting away the dead wood, of asking "why?" a few more times than anyone else. That is what is so awesome about the work of Ronald Coase: His 1960 article outlines a number of tort law hypos that lawyers are very familiar with, but instead of asking what the rule of liability is, he asks why the rule of liability is what it is. "Why?"

10. there is a great danger that in rejected the most simplistic pro-market mantras, economists and policymakers will embrace even more dangerous and naïve statism.

Amen.

Chutzpah

In Wikipedia, we find:

Chutzpah ( /ˈhʊtspə/) is the quality of audacity, for good or for bad. The Yiddish word derives from the Hebrew word ḥuṣpâ (חֻצְפָּה), meaning "insolence", "audacity". The modern Englishusage of the word has taken on a broader meaning, having been popularized through vernacular use in film, literature, and television. The word has also been able to be interpreted as meaning the amount of spunk or ability that an individual has. In more traditional usage, chutzpah is invariably negative.

As it happens, though, the concept can be explained better with an example:

Courtesy of the German-language law blog Verfassungsblog, we have the story of the argument made by Heinrich Boere - Dutch Nazi war criminal - before the German Federal Constitutional Court. He argued - wait for it - that he could not be prosecuted in Germany because he had already been prosecuted, and found guilty, in the Netherlands in 1949. Of course, this Dutch sentence (originally death, later commuted to life in prison) had never been carried out, because the German authorities always took the view that he had (or in recent decades: "might have") German citizenship. In 2007-2008, it briefly looked like he might have to serve his Dutch sentence in Germany, but that ruling was overturned on the grounds that the Dutch trial had been in absentia. Which is how he finally ended up being retried in Germany.

Enter the creative legal argument. In general, the rule of ne bis in idem never applies when the

two trials are by different sovereigns, because all sovereigns are supposed to be equal and so no sovereign has the power to bind another. However, since a few years EU law makes an exception, one that doesn't even apply in the US:

Art. 50 Charter

No one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law.

A similar principle was already found in the European Arrest Warrant Framework Decision, where art. 3(2) forbids extradition when the case has already been tried somewhere. This provision, however, has an important exception that art. 50 Charter does not have:

The judicial authority of the Member State of execution (hereinafter "executing judicial authority") shall refuse to execute the European arrest warrant in the following cases:
(...)
2. if the executing judicial authority is informed that the requested person has been finally judged by a Member State in respect of the same acts provided that, where there has been sentence, the sentence has been served or is currently being served or may no longer be executed under the law of the sentencing Member State;

See also art. 54 of the Convention Implementing the Schengen Agreement of 1990:

Article 54
A person whose trial has been finally disposed of in one Contracting Party may not be prosecuted in another Contracting Party for the same acts provided that, if a penalty has been imposed, it has been enforced, is actually in the process of being enforced or can no longer be enforced under the laws of the sentencing Contracting Party.

Boere, however, was not resisting extradition. He was resisting his second trial in Germany. As such, only art. 50 Charter applied to him, putting the Constitutional Court in a difficult position. The solution proposed by the Regional Court in Aachen and the Federal Supreme Court in Berlin was upheld by the FCC: art. 54 CISA was lifted from its context and interpreted as a general limitation of the art. 50 right under art. 52(1) Charter, which allows for limitations of the rights stated under certain conditions.

While this is undoubtedly the correct result, I'm not sure if I agree with the method taken to get there. I think I would have preferred it if the FCC had opted for a more general interpretative method, without bringing in art. 54 CISA. They should have said straight-up that art. 50 Charter cannot reasonably be read as covering sentences that have not been carried out, or even more generally sentences imposed in absentia. Leaving art. 54 CISA out of it would have made the

argument more honest, and would have avoided the awkward tangle of saying that an agreement from 1990 on cross-border travel somehow limits the definition of a freedom enacted in 2010, as applied to someone who hasn't crossed an international border since 1945.

Still: Chutzpah...

P.S. Speaking of German Nazis, check out this protest action against a Neo-Nazi City Councillor in Oldenburg. Get it? They gave him house arrest by bricking up his door!

(Not that I necessarily agree with the concept of preventing a councillor - be it "symbolically" or otherwise - from attending a City Council meeting, but I just love the creativity and the humor of it.)

Government Debt as Property

I remember having this conversation with a colleague in the Faculty Club once: What is the difference between the Government writing off the value of all debt, and the Government writing off the value of its own debt. (Said colleague argued for the former, but I insisted it would be a violation of art. 1 P1 to do so. Hence the question: What's the difference?)

This issue has become relevant once again now that some Hedge Funds are apparently threatening to sue Greece if it unilaterally forces certain debt holders to take losses. Cf. yesterday's NY Times. I continue to be of the opinion, though, that the will not succeed. (Or at least that they should not.)

Article 1 of the First Protocol says:

Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.

My argument at the time rested on the distinction between the government acting as legislator and the government acting as counterparty. (Notice the effortless switching between my persona as jurist and my persona as (financial) economist.) In my opinion, art. 1P1 does not protect bondholders from normal counterparty risk anymore than it does for strictly private bonds. To say otherwise would require the conclusion that Bankruptcy Acts are in violation of the Convention. The fact that in this case Greece is considering forcing the issue by enacting a statute is irrelevant. If you buy a government bond, you assume a measure of counterparty risk of exactly the nature that is at display here.

If I were representing the plaintiffs in this case, there is one aspect that I would emphasise that might cause the ECtHR to come to a different conclusion: All the arrangements that have been proposed for Greece violate the principle of equality of bondholders by asking the private bondholders - and only the private bondholders - to take a "haircut". If the Court of Human Rights were so inclined, it could hold that a discrimination of such a nature violates art. 1P1. I am not aware of a precedent either way. However, given the sensitivity of the issue, I would be highly surprised if they did so. Maybe at another time, but not now, not here.

Plus ça change...

Today I had the opportunity to attend a very interesting Book Discussion on the upcoming new book by Héritier et al. about the European Commissions old and new powers of delegated rulemaking and implementation. (The somewhat awkward avoidance of the words "delegation" and "comitology" are at the insistence of some of the speakers.)

While the book deals mainly with the pre-Lisbon transition from having only the Regulatory Procedure (under the Comitology Decision) as the most drastic legislator-scrutiny to having the Regulatory Procedure with Scrutiny as well (cf. also this 2009 Working Paper by Héritier), the discussion focused mainly on the consequences of the entry into force of the Lisbon Treaty. And this looks like it is going to be great fun.

As a reminder, this is what the Treaty on the Function in of the European Union now says about these two categories:

Article 290

1. A legislative act may delegate to the Commission the power to adopt non-legislative acts of general application to supplement or amend certain non-essential elements of the legislative act.

The objectives, content, scope and duration of the delegation of power shall be explicitly defined in the legislative acts. The essential elements of an area shall be reserved for the legislative act and accordingly shall not be the subject of a delegation of power.

2. Legislative acts shall explicitly lay down the conditions to which the delegation is subject; these conditions may be as follows:

(a) the European Parliament or the Council may decide to revoke the delegation;

(b) the delegated act may enter into force only if no objection has been expressed by the European Parliament or the Council within a period set by the legislative act.

For the purposes of (a) and (b), the European Parliament shall act by a majority of its component members, and the Council by a qualified majority.

3. The adjective ‘delegated’ shall be inserted in the title of delegated acts.

Article 291

1. Member States shall adopt all measures of national law necessary to implement legally binding Union acts.

2. Where uniform conditions for implementing legally binding Union acts are needed, those acts shall confer implementing powers on the Commission, or, in duly justified specific cases and in the cases provided for in Articles 24 and 26 of the Treaty on European Union, on the Council.

3. For the purposes of paragraph 2, the European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall lay down in advance the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers.

4. The word ‘implementing’ shall be inserted in the title of implementing acts.

So there is delegated lawmaking under art. 290 TFEU and implementation under art. 291 TFEU. A classic example of the former is the right of the Commission to amend an Annex to a piece of legislation, while a clear-cut case of implementation consists of simply applying a pre-existing rule to a specific set of facts. (As we discovered, though, in practice this distinction can become quite arbitrary quite quickly.)

[As an aside, there was a little discussion about whether the two conditions of art. 290(2) are the only possible conditions. Having read the text now, I'd agree with the Commission and Council legal services that the list is indeed exhaustive. Re-introducing Comitology one Legislative Act at a time would not be permitted.]

The benefit of this reform is clear: While in the past the delegation of powers to the Commission was essentially unstructured, with the Community Legislator being free do do as it pleased, now these mechanisms are tied to strict requirements as to definition of scale and scope, and open to being annulled by the CJEU in case the Legislator goes too far.

At the same time, of course, it represents a significant power grab for the Commission, and one that apparently was rooted in the Constitutional Convention and not substantively discussed at either the 2003-2004 IGC or the meetings preparing the Lisbon Treaty. Unsurprisingly, this displeases the Council - notwithstanding the fact that they ratified this treaty - so they try to claw back this power. As far as I can see, they do this in two ways. (I'm reading between the lines a little bit, because the discussion involved representatives of the Parliament and Commission Secretariats, but no one from the Council.)

First of all, and most obviously, it tries to shift as many 290-proposals from the Commission to 291 as possible. Under the Lisbon Treaty, this is not always possible, but the Council Legal Service tries to redraft the Commission proposals so that they fit within the remit of the implementing article. As the Commission official said, this cannot go on forever. Eventually the European Institutions will end up before the Court of Justice in order to have it define the distinction between these two articles. The fact that the Commission has already adopted a Communication on this issue is less important. Of course they did so: having a rule for choosing between art. 290 and art. 291 helps them resist pressure from the Council to negotiate about this question. However, this rule is likely to strike the balance too far towards art. 290 - the option that gives the Commission more power - so it is unlikely that the CJEU will follow the Commission's approach wholesale.

The second response by the Council consists of an effort to exploit the "Expert Groups" now organised by the Commission to facilitate its decision making under art. 290 TFEU. These meetings are not formally the same as the old Comitology committees, but they serve many of the same functions. They provide the Commission with the opportunity to gauge the likely response of the Legislator to something they are thinking of doing, and to improve the legitimacy of such acts. The Council, in its turn, is attempting to transform these meetings into de facto Comitology committees. While obviously a "No" vote no longer carries the same penalty as before, I do not see how the Commission can afford to displease the Council too frequently in these meetings, certainly on sensitive issues like GMOs. (Sensitive for the Council that is. The Parliament has entirely different sensitivities.) A clear example of the Council's attempts to turn these Expert Groups into de facto Comitology Committees is their attempt to get rid of the Parliament's representation there. If the EP is represented, it is much more difficult to pretend that the meeting is anything other than consultation.

In the end, while I'm no expert (or no expert anymore, having been away from Brussels since 2006), reading between the lines I'd tend to agree with Mr. Bergström, one of prof. Héritier's co-authors. He argued throughout that this reform was much less drastic in practice than it was on paper. While this depends a little on where the CJEU will come down, I suspect the result will be a sufficient pushback from the Council that the ultimate shift on the balance of power will favour the Commission only a little more than it did before. (Especially as long as the Council keeps appointing "weak" Commission Presidents like Barroso.) Plus ça change, plus c'est la même chose...

This Week in Luxembourg

The only Grand Chamber judgment this week involved employee rights for a person working on the Dutch continental shelf. Read it if you like. Salemink v. UWV

AG Kokott considers the problem of public service contracts and military hardware. Conclusion: “An item which, according to the contracting authority, is to be used for specifically military purposes, but which, viewed objectively, is essentially no different from similar items used in the civilian sector cannot, through reliance on Article 296(1)(b) EC in conjunction with Article 10 of Directive 2004/18, be excluded from the procurement procedures prescribed in that directive.” That makes sense… Insinööritoimisto InsTiimi

AG Bot gets involved in the issue of fees for 3^rd country citizens who are long-term residents in the Netherlands. The Netherlands was already convicted by the ECtHR on this issue last week (G.R. v. the Netherlands), and AG Bot thinks the fees are also too high under Directive 2003/109. (The former case concerned their level relative to the applicant’s ability to pay, while the EU law issue focused on their level relative to comparable intra-EU fees.) Commission v. Netherlands (NL, DE, FR)

AG Trstenjak looked at some copyright law from Denmark. Apparently, the Danish copyrights organisation is annoyed with the use of copyrighted music by public broadcasters under a statutory exception to the normal rules. For this reason, it has asked the courts to rule that this exception only applies to programmes produced by the TV companies themselves, not to programmes commissioned elsewhere. However, the AG doesn’t seem to go for it. DR and TV2 Danmark v. NCB

Last Thursday, AG Mengozzi took a restrained approach to employment discrimination and Directives 2000/43 and 2006/54, by declining to support the idea of an obligation for employers to explain to the unsuccessful applicant why they hired the person that they did, and by encouraging the national court to take a look at the big picture of the application procedure. Given the facts, however, this context point will probably get the defendant in trouble. Meister v. Speech Design Carrier Systems

Before Christmas, the General Court ruled in a highly interesting case that I overlooked because it looked like just another competition case. In CDC Hydrogene Peroxide Cartel Damage Claims v. Commission, the Commission argued that it could not give the applicants access to documents because then they might sue the subject of the (successful) competition investigation. While it is easy enough to understand the Commission’s concern, of course this argument was never going to fly as a legal matter. Cf. Eutopia Law

Finally, I would like to point out that on 15 June this year, the Florence School of Regulation is organising its First Annual Conference on the Regulation of Infrastructure Industries. The deadline for submitting abstracts is March 1, 2012. Please forward the Call for Papers to anyone you think might be interested.

1st Annual Conference on the Regulation of Infrastructure Industries

Florence, 15 June 2012

The main infrastructures – Energy, Transport, Communications – have experienced significant liberalization processes over the past 30 years. Liberalization has generally been accompanied by re-regulation, leading, among others, to the creation of sector-specific regulatory authorities, whose main role it is open up and sustain markets for the benefit of users and customers. This process of simultaneous liberalization and re-regulation has been particularly active in Europe, promoted as it is by the European Commission.

Observers of this process have become increasingly critical about the fact that liberalization has not delivered on its promises, that regulation has failed as well, and that new challenges are emerging in the infrastructures, requiring novel approaches to regulation. The most prominent such challenges pertain to investments, public services and public service obligations, infrastructure systems’ coherence, and more generally responsiveness of infrastructure operators to public policy objectives.

These constitute as many challenges for regulation and regulatory bodies. This conference aims at exploring these challenges for regulation and regulators across the infrastructures and in an interdisciplinary manner, combining engineering, economics, law, and political science.

Deadline for Submission: 1 March 2012

Door Gevaarlijke Gekken Omringd III

The world has gone mad once again. In a 6-1 ruling, the second chamber of the European Court for Human Rights held yesterday that the 1994-2009 garbage collection mess in Campania, Italy was a violation of citizens' rights under art. 8 ECHR. I can see how a serious health risk might be a violation of art. 2 or 3, but art. 8? Just copy/pasting the summary of the court's judgement (the full judgement is only available in French for now) makes me shudder:

The Court noted that the applicants had not complained of any medical disorders linked to their exposure to the waste, and that the scientific studies produced by the parties had made conflicting findings as to the existence of a link between exposure to waste and an increased risk of cancer or congenital defects. Although the Court of Justice of the European Union, which had ruled on the issue of waste disposal in Campania, had taken the view that a significant accumulation of waste on public roads or in temporary storage sites was liable to expose the population to a health risk (link), the applicants’ lives and health had not been in danger.

The collection, treatment and disposal of waste were hazardous activities; as such, the State had been under a duty to adopt reasonable and appropriate measures capable of safeguarding the right of those concerned to a healthy and protected environment.

It was true that the Italian State, from May 2008 onwards, had adopted several measures and launched a series of initiatives which made it possible to lift the state of emergency in Campania on 31 December 2009. However, the Court could not accept the Italian Government’s argument that that state of crisis was attributable to force majeure. Even if one took the view, as the Government did, that the acute phase of the crisis had lasted only five months – from the end of 2007 until May 2008 – the fact remained that the Italian authorities had for a lengthy period been unable to ensure the proper functioning of the waste collection, treatment and disposal service, resulting in an infringement of the applicants’ right to respect for their private lives and their homes. The Court therefore held that there had been a violation of Article 8.

So now garbage collection is a human rights issue. Yet another step towards the constitutionalisation of everything. (Following, for example, last year's unfortunate CJEU venture into car insurance and its somewhat more appealing foray into internet privacy in Scarlet Extended v. SABAM.)

Cf. Verfassungsblog, where Max Steinbeis is surprised that the plaintiffs in this case had standing. Also a very good point.

Before Christmas in Luxembourg

Here are some cases that I didn’t get around to before the holidays. Regularly scheduled programming resumes next week.

The biggest case of the weeks before Christmas is undoubtedly the Grand Chamber’s Emissions Trading for Airlines judgment in Air Transport Association of America et al. v. Secretary of State for Energy and Climate Change. While there is too much to this case for me to mention it all here, I have to say that I’m not convinced by the Court’s insistence that charging airlines for all emissions produced, from the moment it starts taxiing until the moment it reaches the gate at the other end, does not infringe the sovereignty of third countries (cf. par. 127-130).

In asylum law, The Grand Chamber followed the ECtHR’s ruling in M.S.S. v. Belgium (cf. Strasbourg Observers), as well as AG Trstenjak, and held that “European Union law precludes the application of a conclusive presumption that the Member State which Article 3(1) of Regulation No 343/2003 indicates as responsible observes the fundamental rights of the European Union.” N.S. v. Home Secretary and M.E. et al. v. Refugee Applications Commissioner et al.

The Grand Chamber rejected France’s appeal against the General Court’s ruling in PMOI v. Council. Essentially the French took some of Kadi’s rights of defence language head on, and lost. France v. PMOI In sanctions news, the Third Chamber takes a flexible approach to interpreting Regulation 423/2007 (sanctions against Iran). Clearly attempts at finding loopholes are not being tolerated. Afrasiabi et al.

The Grand Chamber also convicted Austria of breaching art. 28 and 29 EC “by prohibiting lorries of over 7.5 tonnes carrying certain goods from using a section of the A 12 motorway in the Inn valley (Austria)”. It is always fascinating to see how the law can force parties to argue from a completely unrealistic framework. After all, this is not really a free movement of goods issue, this is a transportation issue. (The Netherlands and Italy appeared as intervenors.) And yet, MEE it is. Commission v. Austria

In Ziolkowski et al. v. Berlin, the Grand Chamber considered how people acquire a permanent right of residence if their home country only joins the EU while they’re already abroad. The conclusion is that their residence abroad not only has to be legal under the law of the host MS, but also has to meet the conditions of art. 7(1) of Directive 2004/38. However, residence in an EU MS that meets those requirements counts towards the required minimum period even if it occurred before accession. (So a Czech who has lived in Germany since 2000 acquires the right of permanent residence in 2005.)

Following AG Mengozzi, the Grand Chamber held that Directive 85/374 does not prevent Member States from making make hospitals and doctors liable for using a defective product in addition to the liability of the producer. The French law in question created no-fault liability for the users of the medical product in addition to the liability for the producer of the product that is required by the directive. Centre hospitalier universitaire de Besançon v. Dutrueux et al.

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In energy law, the Second Chamber endorsed an Italian Universal Service Obligation for energy producers, notwithstanding art. 11 of Directive 2003/54. ENEL Produzione v. Autorità per l’energia elettrica e il gas

After September’s Gueye and Salméron Sanchéz (cf. also here for a detailed analysis), the Court now again has a case on the protection of vulnerable victims under Framework Decision 2001/220. And again, the answer is not quite what the victims in question will have hoped. Prosecutor v. X

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In Cicala v. Sicily, the Italian court asked two questions about the obligation to state reasons under the Charter of Fundamental Rights. While it might have been interesting to hear the answers, the case in question did not otherwise touch on EU law, so the Third Chamber threw it out for lack of jurisdiction.

In 2004, the ECJ rejected sui generis Intellectual Property protection under art. 7(1) of Directive 96/9 for a database of football fixtures. Cf. Fixtures Marketing v. Oy Veikkaus. Now, a new plaintiff is trying for straight up copyright protection under art. 3 of that Directive. AG Mengozzi, however, does not seem enthusiastic. He argues that this is only possible if the database is “an original intellectual creation”, and the work of putting together the database does not count. Moreover, he argues that MS are not allowed to create additional protection. Football Dataco et al. v. Yahoo! UK et al.

In the Grand Chamber case of Kamberaj (NL, DE, FR, IT), AG Bot proposes an answer that passes most of the problem back to the Italian judge. The question is whether an Albanian long-term resident of Italy can have his rental assistance taken away in a manner that violates the equal treatment he is in principle entitled to under Directive 2003/109. The AG suggests that the national judge should sort out whether this qualifies as social security, etc. under art. 11(1)(d) of the Directive, and, if so, whether it is a core benefit under art. 11(4). He does, however, propose some guidance for the latter.