This Week in Luxembourg

The Third Chamber denied the appeal of Deutsche Telekom, just like AG Mazák had recommended. (The CFI's ruling is here.) This means that the EU will continue to have two different state agencies supervising regulated industries: the regulator and the Commission's DG Comp (or the national competition authority, of course). Deutsche Telekom could not derive a legitimate expectation of legality from the German Regulator's approval of its pricing scheme. (par. 97-110) Deutsche Telekom v. Commission. (At some point I'm going to write more about this case, I promise.)

UPDATE: There is a post about this case here. It should be noted that I left out the actual substance of the case (i.e. the alleged margin squeeze) on purpose. I don't think that it is the most interesting aspect of the case, being highly fact-specific, and it didn't fit in the limited space that I like to use for any one case. It will however appear in my paper about this case, as it did in the earlier draft paper.

The Grand Chamber this week considered problems of age discrimination, retirement and severance in the German case of Rosenbladt and the Danish Andersen case. Much to the relief of everyone (except me), the Court did not invalidate the mandatory retirement age.

In Nuova Agricast and Cofra v. Commission, the First Chamber sorted out an Italian state aid mess in the context of a damages claim against the Commission. In the middle of it all there an interesting question of legal certainty.

[UPDATE: ECJBlog.com has a post about this case.]

AG Sharpston has an opinion on the law of nobility in EU citizenship law. Austria has always been rather harsh in its rejection of noble titles. (Former nobles aren't even allowed the prefix "von" or "zu".) The AG now argues that the public policy arguments behind this rule are capable of justifying a certain amount of free movement inconvenience, but only to a point. As a final cherry on the pie, there's also a problem about surnames and titles that vary depending on the sex of the person, which of course gets all the Slavic countries very excited. Ilonka Sayn-Wittgenstein.

[UPDATE: ECJBlog.com has a post about this case.]

AG Bot has an opinion on the patentability of Graphical User Interfaces under Directive 91/250, the software patent directive. He doesn't think they are patentable under that directive, but he does think that they are capable of being copyrighted under Directive 2001/29. Bezpečnostní softwarová asociace – Svaz softwarové ochrany v. Ministerstvo kultury (NL, DE, FR)

Finally, AG Kokott has an Aarhus Convention case, specifically an access to documents case under Directive 2003/4. In this case, the information is requested by the City of Lyon, though that is legally irrelevant. The city wants information about the sale of emission rights by certain district heating companies, because they're trying to decide who to award a concession to. She concludes that the Caisse des dépôts et consignations was justified in rejecting access until after the five year confidentiality period of art 10 of Commission Regulation 2216/2004 was over. Ville de Lyon (NL, DE, FR)

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

Comité interprofessionnel du vin de Champagne v. Unilever

Today's ruling in Comité interprofessionnel du vin de Champagne v. Unilever is interesting exactly for what it assumes rather than deciding. In par. 4.1 we find:

Niet in geschil is dat Unilever door het verhandelen van de Champagne shampoo inbreuk heeft gemaakt op de beschermde oorsprongsbenaming Champagne in de zin van artikel 118 quaterdecies van “Verordening 491/2009” (de voorzieningenrechter begrijpt: Verordening 1234/2007 zoals die luidt na wijziging door Verordening 491/2009).

Meaning (my translation):

Not in contention is that Unilever has infringed on the Protected Indication of Origin Champagne by selling Champagne shampoo, as forbidden by art. 118m of Regulation 491/2009 (the Court in Expedited Procedure understands: Regulation 1234/2007 as it is after amendment by Regulation 491/2009).

Given that parties seem to have stipulated to this fact, the rest of the ruling is quite straightforward. CIVC gets its injunction, backed up by a penalty payment of € 5.000 per day, with a maximum of € 500.000.

Based on the text of that provision, it is not surprising that the actual infringement was not incontention. It reads:

Article 118m
Protection

1. Protected designations of origins and protected geographical indications may be used by any operator marketing a wine which has been produced in conformity with the corresponding product specification.
2. Protected designations of origins and protected geographical indications and the wines using those protected names in conformity with the product specification shall be protected against:
(a) any direct or indirect commercial use of a protected name:
(i) by comparable products not complying with the product specification of the protected name; or
(ii) in so far as such use exploits the reputation of a designation of origin or a geographical indication;
(b) any misuse, imitation or evocation, even if the true origin of the product or service is indicated or if the protected name is translated or accompanied by an expression such as “style”, “type”, “method”, “as produced in”, “imitation”, “flavour”, “like” or similar;
(c) any other false or misleading indication as to the provenance, origin, nature or essential qualities of the product, on the inner or outer packaging, advertising material or documents relating to the wine product concerned, and the packing of the product in a container liable to convey a false impression as to its origin;
(d) any other practice liable to mislead the consumer as to the true origin of the product.

(...)

This is a surprisingly broad provision, given that we're talking about PDOs and PGIs here, not trademarks. It seems to allow not only direct infringement proceedings, but also dilution claims of the kind brought by CIVC here. I'm not sure that I agree with the rationale for such a high level of protection. Of course, users of PDOs, just like trademark holders, invest in brand capital, and are entitled to see that investment protected by the courts, but unlike trademarks PDOs are a collective good, meaning that its users will have a much smaller investment. Also, PDOs are in a real sense a gift from the legislature; it is about truth in advertising as much as about trademark law.

For these reasons, I would consider the damage done to the Champagne PGI by the introduction of Champagne shampoo much smaller than the damage that would be done if Unilever introduced Chanel shampoo. (Assuming Chanel aren't in the shampoo business themselves, which they may well be.) Given that these laws are about a balance of equities between the users of the PDO or PGI on the one hand and the company that would like to use the designation in question on the other hand, I would have favoured a more narrow protection for PDOs in this regard.

Of course, given that the entire 56 page Regulation, like the 149-page original, is devoted to "establishing a common organisation of agricultural markets and (...) specific provisions for certain agricultural products", it is easy to see how this generous protection came about, but that doesn't make it any less unfortunate.

French Burqa Ban Constitutional

Unencumbered by any real knowledge of French constitutional law, I note simply that the Conseil Constitutionnel decided today that the law forbidding the hiding of one's face in the public space was in conformity with the constitution, except as applied to places of worship, which seems like a reasonable restriction. (I wonder why that exception wasn't included in the original law.)

Apart from its own case law and two cases from the Conseil d'État, the Council refers to four ECtHR cases:

• Kokkinakis v. Greece (1993) (par. 31)
• Leyla Şahin v. Turkey (2005) (par. 104-111)
• Dogru v. France (2008) (par. 47-48)
• Ahmet Arslan and others v. Turkey (2010) (par. 34-36)

Kokkinakis is a case about proselytising Jehova's Witnesses in Greece, which was apparently a crime. This law was held (6-3) to be in violation of art. 9 freedom of religion. It was cited as authority for the proposition that the freedom of religion implies more than only the freedom to have a religion, i.e. that it includes the "freedom to "manifest [one's] religion". Bearing witness in words and deeds is bound up with the existence of religious convictions."

Arslan, which concerned a terrorism suspect who refused to take of his turban in court, as well as the headscarf cases of Şahin and Dogru are obvious precedents to consider if you're trying to figure out how to do the proportionality analysis in these circumstances. However, the strange thing is that the Council seems to cite them more for the scope of the freedom of religion in the first place, which seems to be covered by Kokkinakis just fine. For proportionality, it cites only its own case law.

As a matter of ECHR law, it seems like quite a stretch to go from Turkish dresscode cases, which are clearly to some extent unique to Turkey, and a case about headscarves in gym class, to a ban on covering one's face in public. Judging from the ruling, which is as terse as always, it seems like the only way they got there is because they asked whether the law was "manifestly disproprotionate" to the goals pursued. (par. 5) This is a very deferential test, one that may well be more deferential than the "margin of appreciation" that the ECtHR tends to give the High Contracting Parties.

I suppose we shall see what the Strasbourg court will do...

P.S. One of the CDE cases they referred to is my beloved Dwarf Tossing Case! (Which clarifies to what extent human dignity, as an element of public order, is sufficient to justify government intervention.)

UPDATE: Not everybody's a fan.

Sustainability

Seriously??? Sustainable gold?

Here's a free tip from me to you: if you want people to live in a more sustainable manner, get your priorities straight. The last thing you want is to create a movement that seems to have no other goals than to take away every ounce of fun people might actually have. You can't be, or appear to be, against every single thing that people derive enjoyment from. Somehow it has to be balanced out.

One place to start would be to distinguish between planet-sustainability and people-sustainability. (To borrow the age-old adage of People, Planet, Profit.) The objection these people seem to have against the way gold is ordinarily produced seems to involve both "people" and "planet". They don't like the way gold mining ruins the environment, they don't like the way gold mining hurts the health of the miners, and they don't like how little these miners earn.

This is a problem because it makes me much less sympathetic for their cause. As a general rule, I would suggest that those three concerns widely differ in the extent to which people in the West will care, with the environment ("planet") easily beating out the interests of the miners ("people"). Personally, I'd certainly care more about the "planet" that can't speak for itself than about the workers who are making the best of a difficult situation. Not buying the gold they produce will only make them worse off; the only way to improve their lot it to support their efforts at collective bargaining and, more importantly, to help them improve the rule of law in their countries. Trying to get Western consumers to pay a "White Liberal Guilt" Premium on their gold is hardly the solution.

This Week in Luxembourg

The Grand Chamber declined to follow AG Cruz Villalón's revolutionary proposal to overturn the Rheinmühlen/Cartesio doctrine. When a MS court is faced with a case that has been referred back by a higher court, EU law trumps that higher court's instructions. Personally, I think this is unfortunate, but I don't get a vote. Elchinov v. Natsionalna zdravnoosiguritelna kasa. (Cf. below.)

In Commission v. France, the Grand Chamber pushed back (a little) the law on free movement of medical services. The French system of prior authorisation is permitted under Community Law. The Bulgarian scheme at issue in Elchinov, on the other hand, went too far and was found to violate art. 49 EC/56 TFEU and art. 22 and 36 of Regulation 1408/71. Particularly the latter case gives some useful guidance on the state of the law in this area, for those who might be interested.

On Wednesday, the 4th Chamber handed down two judgement about universal service obligations and electronic communications in Belgium. It held that it is (theoretically) permissible for the legislature to designate itself the National Regulatory Agency under art. 2(g) of Directive 2002/21, as long as the requirements of art. 3 are met. It also held that art. 13 of Directive 2002/22 requires a specific examination of the circumstances of the undertaking that is allegedly subject to an "unfair burden". The net result is that Belgacom, the old incumbent, loses. Commission v. Belgium and Base. (Cf. De Standaard.)

On Thursday, Portugal was found (by the 3rd chamber) to have failed to adequately transpose that same Directive 2002/22. Apparently, they've been a bit cavalier about their universal service obligations, which still lie with the old incumbent, but without the kind of legal framework and official findings required by the USO Directive. (cf. art. 3(2) and 8(2)) Commission v. Portugal (FR)

In Lassal, the 3rd Chamber illuminated the retroactive effect of Directive 2004/38, the general free movement of persons directive. The answer is that, yes, a continuous period of 5 years residence (cf. art. 16(1)) still counts if it was completed before the date of transposition of the directive. Once that 5 year residence period is completed, only an absence of 2 consecutive years or more can make a person lose their right of residence. (Cf. art. 16(4)).

AG Sharpston was surprisingly forgiving about Spain's (and Catalunya's) "anti-Wall Mart" law. They have a licensing scheme in place for "large retail establishments". Instead of striking it down in one fell swoop as a violation of the freedom of establishment (albeit based on indirect discrimination), she goes over it one aspect at a time to see if it is justified. As a result, she concludes that some parts are OK, while others are not. Commission v. Spain.

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

Elchinov

Today the Grand Chamber of the European Court of Justice ruled in Елчинов v. Национална здравноосигурителна каса, or, in Latin script, Elchinov v. Natsionalna zdravnoosiguritelna kasa. Just like today's other Grand Chamber case, Commission v. France, it was a case about the free movement of medical services, including Regulation 1408/71. The French won, the Bulgarians didn't. (For more facts on Elchinov, cf. here.)

However, there is something special about Elchinov beyond this medical services stuff. The brand new Advocate General Cruz Villalón used it to advocate for the Court to overturn a 37 year old precedent: Rheinmühlen-Düsseldorf v. Einfuhr- und Vorratsstelle für Getreide und Futtermittel. (And yes, 37 years is pretty old for an ECJ precedent.) In Rheinmühlen - a case ruled in a time when both the answers and the questions were still simple - the ECJ held that:

THE EXISTENCE OF A RULE OF DOMESTIC LAW WHEREBY A COURT IS BOUND ON POINTS OF LAW BY THE RULINGS OF A COURT SUPERIOR TO IT CANNOT OF ITSELF TAKE AWAY THE POWER PROVIDED FOR BY ARTICLE 177 OF REFERRING CASES TO THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES.

In Elchinov that meant that the referring court, the administrative court of Sofia-grad, was bound under Bulgarian law by the ruling on points of law of the Supreme Administrative Court, which had considered the case and had referred the matter back to the lower court for further consideration consistent with its ruling. At the same time, however, the referring court had the right, under Rheinmühlen, to ignore the binding force of the Върховният административен съд's ruling and ask a prejudicial question. (Which presumably the SAC should have done, but didn't.)

The AG argued that there was no reason to disturb the distribution of power between the lower and the higher court, since it is a matter of Bulgarian procedural law. If there is a prejudicial question to be asked, it is the obligation of the higher court to ask it. (This obligation flows directly from art. 267(3) TFEU if the higher court is also the highest court, as it was here.) If the higher court fails to ask such a question, remedies are available under Francovich and under Brasserie du Pêcheur & Factortame. Sensible federalism implies that we do not mess with the constitutional arrangements of the Member States unless it is absolutely necessary, and it does not appear to be necessary here, at least not anymore, as AdjudicatingEurope puts it.

The Grand Chamber today disagreed. It argued that the competence to ask a prejudicial question flows directly from the Treaty, meaning that no rule of national law may interfere with it. In fact, given the primacy of EU law, the lower court may even ignore the higher court's ruling without first asking a prejudicial question. (The ECJ cites Kücükdeveci, par. 54-55 for this proposition.) The result is that the ECJ will continue to undermine the authority of MS Supreme Courts over their inferior courts. All MS courts will receive in equal measure the wisdom of Luxembourg dicta, without the Court favouring higher courts over lower ones, that is to say without any kind of pluralist dialogue.

(Remember, under the AG's preferred rule, if a MS lower court were faced with - in its view - conflicting precedents from its own higher court and from Luxembourg, its first instinct should and would have been to try to reconcile the two through some form of Community law conform interpretation of the national law. That is to say, there would be some attempt at a compromise, instead of the current system of CYA.)

Voluntary Fire Department

Here's a question: can the fire department work on a voluntary basis? I'm not talking about a voluntary fire brigade, but about their customers. Is it possible to create a fire department that only services those that first contract with it for the privilige? In Obion County, Tennessee they seem to have done just that. As a result, last week "firefighters watche[d] as home burn[ed] to the ground".

As a first approximation, the answer is simple: it can be done as long as there aren't too many externalities from house fires. If a fire in one house, unchecked, causes other homes to burn as well, mandatory fire services are the only solution. However, if the houses are far enough apart, as seems to have been the case here, there is no objection to making the fire department optional, except possibly the moral one that society should always come to the aid of people trapped in burning buildings, even if they are trapped there by their own laziness or selfishness.

A more interesting question - also useful for microeconomics 101 exams - is what to make of the offer to pay "whatever the cost" if the firefighters would come immediately. In the comments to the Volokh Conspiracy post about this story, Sasha Volokh gives - I think - the correct answer:

The fire department could have said “$75 per unit of time for insurance OR
$10,000 if you need protection on the spot.” But the amount for spot protection
had better be pretty high, or else you’ll see people systematically forgo the
insurance and just pay on the spot. Just like with optional insurance generally,
you can see unraveling (or just inefficient development) of the insurance market
by adverse selection; only since the price of spot protection is going to have
to be lower than the actual cost of losing your house in a fire, the problem
will probably be worse.

Of course, this is all well and good but how do you recover this fee from someone whose house just burned down?

UPDATE: Krugman heard about this story too, and he doesn't like it. He compares it, somewhat implausibly, to the health care debate. I don't see how that analogy can work: surely there is a difference between allowing someone's house to burn down and denying them medical care?

Kokott

Surprisingly few people seem to be complaining about AG Kokott's - euh - unfortunate insurance opinion from yesterday. (link) Most reports seem to simply accept that this kind of excessive political correctness is what passes for EU law these days, never mind that she had to (propose to) annul an explicit provision of EU law to reach her preferred conclusion.

De Standaard (Dutch), after all, it is a Belgian case.

EUObserver

Wall Street Journal

NRC Handelsblad (Dutch)

Colère

Like with the German word geil, I can't help but laugh every time I see the French talking about colère. For a Dutch speaker, both words are always going to be unavoidably funny.

(And yes, last Saturday, 11 days after the event, the Jean Quatremer was still angry about Commissioner Reading's Nazi comparison, his usual left-wing tendencies notwitstanding. To make matters worse, she said it in English! [Warning: that article also talks about colère.])

This Week in Luxembourg

AG Sharpston has a quite spectacular case on the intersection of reverse discrimination in free movement law and fundamental rights protection in EU Law post-Lisbon. The case concerns the rights of residence of an infant Union citizen and its third country national parents. The result is not unequivocally to the benefit of said child (no "fundamental" right to family life at the material time), but is interesting because it seems to divorce the right of residence from the underlying free movement right. (par. 67-122) Note also how she brings in the fundamental rights (par. 151-177). Ambitious... let's see what the Grand Chamber does.

In the conflict between the European Commission and Belgium about the financing of the European Schools, the ECJ now held that it does not have jurisdiction, since the Community is not a party to the 1957 Statute of the European School and the 1962 Protocol, which Belgium stood accused of having violated. In other words, the Commission will have to bring this case in Belgian court. Commission v. Belgium. (AG Mengozzi had argued that the ECJ only had jurisdiction after 2002.)

AG Kokott thinks that it is not fair to make women pay lower life assurance premiums, just because it so happens that they live longer. As a result, she concludes that art. 5(2) of Directive 2004/113, which makes an exception to the general equal treatment rules to make this possible, is invalid. Association Belge des Consommateurs Test-Achats and Others

AG Cruz Villalón considered an Austrian regulation which quite obviously violated Community law by requiring that the licensee already be established in Austria and that a new license be denied if it threatened the profitability of other licensees. The case concerned tourist busing services in Vienna. Yellow Cab Verkehrsbetriebs (DE, FR)

In the Polish VAT case of Oasis East, tax havens everywhere achieved a useful victory. Poland is not allowed to exclude them from the usual rules about international VAT.

Finally, there were two more terrorism cases before the General Court this week. In Al-Faqih et al. v. Council, the applicants, who are on the UN list as well as on the EU list, won on the grounds that their right to be heard and their right to effective judicial review had been violated. They are officially no longer terrorists. Also, Yassin Abdullah Kadi is back in Luxembourg. As before, the Court ordered him to be taken off the list. Even though the Commission provided a statement of reasons this time, they still infringed the rights of defence and the principle of effective judicial protection. Kadi v. Commission.

[UPDATE: ECJBlog.com has a post about this case, as does EJIL:Talk!.]

The archive of these emails is here.