This Week and Last Week in Luxembourg

The British system of special advocates for national security immigration cases survived a challenge under the free movement directive this week. While the Grand Chamber (Judge Von Danwitz) set some limits, those are the same as the limits already set by the ECtHR and the UK Supreme Court: Only when it is strictly necessary, and in any event the “essence” of the case must be disclosed. ZZ v. Secretary of State for the Home Department Cf. UK Human Rights Blog and Eutopia Law Blog

The big competition case last week was Bundeswettbewerbsbehörde v. Donau Chemie et al., where the Court (Judge Tizzano) held that access to a competition case file cannot be made subject to a right of veto of the parties. Even in cases of leniency submissions, the national court has to assess the balance of interests. Note that the new Commission proposal for a Directive on private damages suits in competition law forbids access to statements made in leniency submissions and settlement negotiations categorically. COM(2013) 404 Cf. Kartellblog and, on the Proposal, Recent Developments in European Consumer Law Blog

In January 2012, the General Court (Judge Forwood, of course) held that there was no longer any need to adjudicate the asset freeze case of Ayadi v. Commission, because Mr. Ayadi had since been removed from the asset freeze list. The Court (Judge Rosas) affirmed last month’s Grand Chamber judgement in Abdulbasit Abdulrahim v. Council (also by Judge Rosas) to hold that that was wrong. Ayadi v. Commission

In the Sardinian Hotel Aid case of HGA et al. v. Commission, the Court (Judge Arabadijev) signed off on the use by the Commission of a “corrective decision” in order to update a state aid procedure in mid-stream in light of new information provided by the Italian authorities (don’t ask). In so doing, the Court upheld the General Court’s decision in Regione autonoma della Sardegna et al. v. Commission (NL, DE, FR).

If one public authority hires another to clean its offices without any kind of (traditional) collaboration being established between them, that constitutes a public service contract under Directive 2004/18, meaning that it should have been tendered. Piepenbrock Dienstleistungen GmbH & Co. KG v. Kreis Düren

Ryanair lost its appeal in the Alitalia state aid case. The Commission’s decision finding that the loan provided by the state constituted unlawful state aid while the state’s other measures did not now stands. Ryanair v. Commission

As it turns out, just because you didn’t mention jurisdiction when opposing a the European order for payment, doesn’t mean you’ve forfeited the right to do so in the regular procedure under Regulation 44/2001. Goldbet Sportwetten v. Sperindeo

AG Mengozzi is proposing that, for a change, the Swiss should not end up holding the short end of the stick in a dispute about the tax-free amount for German inheritance tax. Welte v. Finanzamt Velbert

AG Kokott delivered an opinion on the rights of the citizen taxpayer when a Member State asks another Member State for information. She concluded that, as far as EU law is concerned, the citizen has no rights in this context. Jiří Sabou v. Finanční ředitelství pro hlavní město Prahu (NL, DE, FR)

The facts in the unfair commercial practices case of CHS Tour Services v. Team4 Travel make for a pretty interesting case, but tragically the ECJ’s portion of it is pretty straightforward. Defendant describes its arrangement as “exclusive” based on its contract with the hotel in question, plaintiff manages to book there anyway, and therefore challenges the use of “exclusive”. Result, according to AG Wahl: “Where a commercial practice falls within the scope of art. 5(4) of Directive 2005/29, it is of no relevance whether the criteria under art. 5(2)(a) and/or art. 5(2)(b) are also fulfilled.” So the plaintiff wins. Cf. Recent Developments in European Consumer Law Blog

According to AG Mengozzi, the requirement that you have to provide your fingerprints for your passport does not violate art. 8 Charter. Schwarz v. Stadt Bochum (DE, FR)

AG Jääskinen made some pointed remarks about the brevity with which the French Cour de Cassation formulated its prejudicial question (par 19), before concluding that the questions posed are irrelevant for the dispute at bar and therefore inadmissible. The case concerns the locus delicti of a case of alleged music piracy under Regulation 44/2001. Pinckney v. KDG Mediatech AG (NL, DE, FR)

The General Court (Judge Martins Ribeiro) handed down an interesting access to documents judgment last week. In Stichting Corporate Europe Observatory v. Commission, it held that the fact that certain documents about the EU-India free trade negotiations had been provided to trade associations – i.e. potentially to large numbers of people – did not mean that the Commission had essentially already made those documents public.

Fyra

In his weekly column, which is usually unique among opinion pieces in being both carefully reasoned and highly insightful, Bas Heijne tore into a slew of targets yesterday. The reason why he lost his calm like that? Fyra.

Fyra is - or rather: was - the high-speed train between Amsterdam and Brussels. There is also a high-speed from Amsterdam to Brussels and then on to Paris, the Thalys, but that train works just fine and is not the topic of this story. Fyra, on the other hand, is an unmitigated disaster. It was launched on December 9, last year, and by the time I took the highspeed (Thalys) to Brussels in early January, it already had a reputation for offering at best an even chance of reaching its destination. Later that month, it was taken out of service, as reported by the BBC here. On May 31, the Belgian railways announced they were cancelling the Fyra service permanently, and a few days later the Dutch followed suit.

So who's to blame? Bas Heijne mentions a few people, but he seems mostly interested in talking about Parliament. However, let's start at the beginning:

• The supplier of the train, the Italian company AnsaldoBreda, seems to have supplied a train that was not fit for purpose.
• NS and NMBS took delivery of a train that was not fit for purpose.
• NS and NMBS contracted with AnsaldoBreda in the first place.
• The Dutch and Belgian governments are the only shareholders of NS and NMBS respectively, so clearly they dropped the ball.
• Likewise, there are some things wrong with the regulatory system. More on that below, but again it is the governments of the two countries that are responsible for that one.
• And finally, Mr. Heijne notes how Parliament (the Dutch one) seems to spend all of its time either screaming at the government about something that was on the front pages of the newspapers the day before, or screaming at the government because of some mess that resulted from the government giving it what it asked for. While that is quite correct, I'm not sure if it is such a relevant consideration in this particular instance. I don't recall any screams from Parliament about how we urgently needed a highspeed connection with Belgium. The government seems to have originated that idea all on its own.

So who's really to blame? Well, it may be my professional background, but I think the issue is one of regulation, not politics. Remember the issue of NS: Like Schrödinger's cat, it is two things at once. It is a state-owned for-profit company that contracts with another state-owned for-profit company for access to the network, which it is entitled to because of a concession it was granted by its owner, the state. All the money it makes running trains and avoiding taxes it pays out to the state in dividends.

In the 1990s, this schizophrenia infected even the state. The Treasury department viewed NS as a for-profit subsidiary and advocated treating it as such until its privatisation, which was to happen sooner rather than later. The Transport department, on the other hand, viewed it as a state-owned enterprise that should be encouraged to run the trains as wisely as possible based on the government's instructions without being burdened with such nuisances as competition or privatisation. The former was run almost exclusively by the liberal VVD party between 1994 and 2007, mostly through the highly influential Deputy-Prime Minister and occasional party leader Gerrit Zalm, while the latter ministry was traditionally a bastion of Christian-Democrats and Socialists. And so, with the ebbs and flows of power between parties and between ministries, the government's policy goals with regard to the railway sector changed as well. That is how the country ended up with a fully unbundled railway sector with competitive tenders in large parts of the system, but also with a state-owned incumbent who is given the most important concession outright every few years. (The last time until 2025.)

Highspeed South, which includes both Fyra and Thalys, is a wonderful example of this schizophrenia at work. When the Treasury was powerful, it pushed through a competitive tender for this concession. NS was so paranoid about letting any foreign company onto the Dutch market that they went crazy and overbid massively. As Mr. Heijne's own newspaper, the NRC, discovered in 2011, the company's internal bid team thought that €120 - 130 million per year would be the maximum realistic bid. The board, however, added to that in a series of meetings until they ended up with € 148 million, a sum € 18 million higher than the € 130 million that the Transport Ministry had estimated as the maximum. The bid was so high that the government went back and encouraged them to re-evaluate, but in the end the bid was accepted. (No other company even came close to bidding € 100 million, much less € 148 million, so NS's concern was entirely unwarranted.)

When High-Speed Alliance, the NS-KLM joint venture tasked with running the trains, went bankrupt in 2011, the Treasury had long since lost its influence. So the liberal approach to railway regulation was unceremoniously replaced by a conservative approach: The Dutch company gets to keep its concession. Instead of re-tendering, the highspeed service was added to NS's regular concession and granted outright, at a reduced price of € 108 million per year. (Ironically, since 2010 the Transport Minister was a liberal.) Nationalism and bureaucracy instead of competition.

In my view, that is how we ended up with this Fyra debacle. As NRC wrote in January, the reason why in 2004 NS and NMBS bought the AnsaldoBreda trains instead of rolling stock from another manufacturer was purely a matter of price. They compromised on speed (which you wouldn't need anyway given how close together the stops are) and quality in order to get the cheapest possible train. That decision made sense from the point of view of a company that was in over its head, having bid way too much in a competitive tendering process. The trouble only arrived now, long after all the responsible railway executives and government ministers have retired.

To review:

• 2001: The government screws up the tender by accepting a bid that was unrealistically high. (Tenders are hard.)
• 2004: NS and NMBS buy the cheapest trains they can get their hands on.
• 2011: HSA collapses and is rescued by the Dutch state.
• 2013: The trains start running and then break down. 

This is not a problem that started in Parliament. They wrote a law that is fundamentally sound. It just leaves a little too much room for shenanigans, so shenanigans is what we got. The solution seems to be that NS should be privatised post haste. A company that makes € 300 million profit per year should fetch a handy sum, which should please the orthodoxy, and theoretically privatisation should remove any further temptation for the Transport Ministry to do anything stupid. Let a private NS run the trains it has contracted to run, and let the Transport Ministry and the Regulator ACM fine them up the wahzoo if they screw it up.

Lone Voice of Sanity Successfully Silenced

Ever since the beginning of the current economic crisis, the government's orthodoxy that cutting expenditure to match tax receipts is the only option has been echoed by all official voices - the Treasury, the National Bank - except one. The CPB, the state agency responsible for analysing the economic impacts of government policy through advanced economic modelling, consistently insisted on pointing out that reducing expenditure doesn't do anyone any good if that reduces GDP more than debt. If contractionary austerity is, well, contractionary - and the CPB's models show it is -  maybe it should be left for better economic times.

Insiders knew, however, that the secret of the CPB's sucess was fickle. After all, like every government agency there is a limit to its independence, and that limit is the term of appointment of its chief. Coen Teulings, the man who was director of the CPB from 2006 until last April, took responsibility for the unpopular findings of his staff, resisting pressure from the government to downplay the results of the agency's modelling. Now that is term is over, however, he has been replaced by Laura van Geest, someone who comes straight from the heart of orthodoxy: the Treasury Ministry. Following the appointment of former top-Treasury civil servant Klaas Knot to the Presidency of the National Bank last year, this is the second time that an independent agency's conformity to orthodoxy is safeguarded by putting a Treasury staffer in charge.

The most surprising thing is how little time it took for this decision to matter. Teulings left on May 1, but Van Geest's appointment doesn't start until August 1. In the interim, however, the mood has already changed. This week, the CPB released a Policy Brief called "Prudent debt level: a tentative calculation", which magically finds that the prudent (maximum) level of debt is in the 61%-86% range. Above that, the authors claim, "the gains of holding a larger buffer to ward off negative shocks [exceed] the cost of transitioning to a lower debt level", the cost of transitioning being evaluated at a 8-year time horizon.

While this has the merit of not being prima facie stupid (it doesn't have a Reinhart-Rogoff-style threshold level of debt above which bad things start to happen immediately), it misses one thing: it uses an average/ordinary 8-year time horizon, based on the way the economy has historically worked, which is very much not the same as the current 2013-2021 time horizon. The next 8 years are likely to be decidedly not average, just like the last 6 years weren't. The authors recognise this, to some exent. That is why they make caveats such as this one:

In the press release:

Caution is advised in using these debt levels as anchors for policy, as the costs of deviating from these numbers are small in this range while the benefits may be significant.

And in the brief itself:

Caution is advised in using these prudent debt levels to anchor policy. Note for example that, by Table 1, an increase in debt of a 10% from such a prudent level reduces lifetime earnings by just a few percentage points. This is relatively small if the debt increase averts a financial crisis. Also, adverse economic circumstances may lead to temporarily higher debt levels, which can be prudent.

[Footnote:]  This can be understood by seeing that the cost of debt reduction increase in a recession. Then, the prudent debt level, that at which the gains of debt reduction equal the costs, rises as well.

Result: We end up with a study that is not so much stupid as it is misguided, but that conveniently ends up supporting the orthodox line that the Netherlands should get to work cutting its expenditures in order to reduce its debt down to the 60% of the Stability and Growth Pact. So yes, we're still all doomed.

This Week and Two Weeks Ago in Luxembourg

The Grand Chamber (Judge Rosas) this week again concerned itself with the issue of asset freezes. In this case, it held that the General Court had erred by holding that Abdulbasit Abdulrahim no longer had standing to sue to have his name removed from the sanctions list because, since he commenced proceedings, his name had already been removed from the sanctions list. The Grand Chamber argued that the applicant had a separate interest in the retroactive effect that a victory in court would produce, as well as in the support such a judgment would offer for any damages suit. Abdulbasit Abdulrahim v. Council

The Court (Judge Šváby) upheld a General Court finding that the Commission failed to act in a state aid case brought by Ryanair against Italy. I must say that the two years between the initial complaint and the action before the General Court seems short to me, given how long the Commission usually takes to handle competition cases. Commission v. Ryanair

In its 1^st Railway Package cases, the Commission achieved another (partial) win, this time against Poland. The Court (Judge Borg Barthet) agreed that the Polish system for access pricing left somewhat to be desired. Commission v. Poland

In one of the more optimistic trademark actions I’ve ever seen, You-Q BV litigated all the way up to the Court of Justice in order to win the right to use Beatle as a trademark. Just like OHIM and the General Court, the Court found for Apple (the record company, that’s irony right there). In fact, the case was summarily dismissed as in part manifestly inadmissible and in part manifestly unfounded. You-Q v. OHIM

The Italian public procurement case of Consulta Regionale Ordine Ingegneri della Lombardia e.a. v. Comune di Pavia (FR), where the city of Pavia gave a contract for the provision of services to the local university without a public tender, does not seem so obvious to me that it could be handled in an order, but the court disagreed. The City (probably) loses.

For people who are amused by the mess that can occur when different Member States have different rules for deciding where an alleged tort was committed there is this month’s Melzer v. MF Global (Judge Safjan), which is handled by a court in Berlin even though the most straightforward locus delicti is London. The Court held that the case should be moved to the UK. Cf. Regulation 44/2001.

“A decision by which a national authority extends to all traders in an agricultural industry an agreement which, (…) introduces the levying of a contribution in an inter-trade organisation recognised by that national authority, thus rendering that contribution compulsory, in order to make it possible to implement publicity activities, promotional activities, external relations activities, quality assurance activities, research activities and activities in defence of the sector’s interests, does not constitute State aid.” (Judge Juhász) Doux Élevage SNC and Coopérative agricole UKL-ARREE v. Ministère de l’Agriculture and Comité interprofessionnel de la dinde française (CIDEF)

The Court (Judge Lõhmus) spent some time on the obligation to assess the suitability or appropriateness of the service to be provided under art. 19(9) of the financial instruments directive 2004/39. Genil 48 et al. v. Bankinter et al.

The Court (Judge Ilešič) also considered the issue of detention for illegal aliens pending their return to their home country. It held the illegal immigrants Directive 2005/85 does not apply to an alien who has asked for asylum, meaning that detention is precluded under Directive 2003/9 unless abuse of right can be shown. Arslan v. Policie ČR, Krajské ředitelství policie Ústeckého kraje, odbor cizinecké policie

In more asylum law, the Court (Judge Bay Larsen) held that nothing in Regulation 343/2003 (Dublin II) forbids a Member State from considering a given application for asylum. It is not required, however, to ask for the opinion of the Office of the United Nations High Commissioner for Refugees about the decision whether or not to consider the application, or whether to send the asylum seeker back to Greece. Halaf v. Darzhavna agentsia za bezhantsite pri Ministerskia savet

The Court (Judge Berger) applied the unfair consumer contract terms directive 93/13 to a tenancy agreement. It ended up aligning the procedural implications of that directive with national rules regarding the public policy exception in contract law. However, when it comes to remedies it rejected the Dutch court’s approach of reducing the contractual damages owed, requiring instead that no damages award be imposed at all. Asbeek Brusse and De Man Garabito v. Jahani BV Same directive, same judge: Jőrös v. Aegon Magyarország Cf. Recent developments in Eurpean Consumer Law Blog

The Court (Judge Lõhmus) imposed a € 3 million penalty on Sweden for non-compliance with a previous judgement. The original case was about Directive 2006/24. Commission v. Sweden Cf. Verfassungsblog and the e-comm blog

In Jeremy F. v. Premier Ministre (FR), the Court (Judge Silva de Lapuerta) did a nice nuts & bolts EAW judgment. Cf. this article and Courthouse news. 

AG Bot proposed holding for the Parliament in its dispute with the Council over the way budgets should be decided. The problem is that the preamble and section 9 of art. 314 TFEU appear to envisage different ways in which the procedure is to be concluded. On balance, the AG placed more weight on section 9 and argued that no single legislative act, signed by the presidents of both institutions, was necessary. Council v. Parliament (NL, DE, FR)

Commission v. Portugal (NL, DE, FR) is the first ever case about the implementation of a penalty payment imposed under art. 260 TFEU. The Commission decided that Portugal should pay 142 days x € 19.392 = € 2.753.664, but this decision was annulled by the General Court. AG Jääskinen agreed, both with the General Court’s interpretation of its authority under art. 260 TFEU and with its interpretation of the original judgment.

Discussing the right of the Council to refuse access to certain legislative documents (things that show which delegations submitted which amendments, as always), AG Cruz Villalón spent most of his time on the General Court’s balancing of interests. In the end, he concluded that the General Court had been right to find for the plaintiff. Council v. Access Info Europe

That AG also gave an opinion on some issues to do with the liquidation of Landsbanki. Société Landsbanki Islands HF v. Kepler Capital Markets SA and Frédéric Giraux

AG Wahl took the concept of a Regulation 44/2001 mess to a whole new level in a case where the German courts are trying to decide which of two conflicting Romanian decisions to enforce. Theoretically, art. 34(4) of the Regulation offers a solution to this kind of situation, but the AG argues – not implausibly – that this article does not apply to a situation where the two conflicting judgements are from the same Member State. Salzgitter Mannesmann Handel GmbH v. SC Laminorul SA

AG Wahl also gave his opinion in a case that might strike the reader as a bit unfair: Peter Brey sues the Austrian Pensionsversicherungsanstalt because they refuse to given him – a German citizen – the compensatory supplement to his pension that Austrians would receive, and the Pensionsversicherungsanstalt turns around and argues that, as someone claiming social assistance, Mr. Brey has no right to live in Austria in the first place. AG Wahl started by citing AG Jacobs in Konstantinidis but ended up concluding that the Pensionsversicherungsanstalt was right to call the supplement “social assistance”. Fortunately, he also concluded that that doesn’t matter until Austria actually throws Mr. Brey out. Brey v. Pensionsversicherungsanstalt Cf. (the end of) this Open Europe Blog post

In litigation about the German Volkswagen Law, AG Wahl is sufficiently uncertain about his conclusion that Germany complied with the Court’s judgment in Case C-112/05 that he discusses financial penalties as well. That is actually the most interesting part, because he discusses how the fact that the original judgment is potentially unclear and the fact that the Commission took its sweet time brining this action should be taken into account. (Par. 63-88) Commission v. Germany

Italy, because it’s Italy, has a stricter limit for the amount of advertising allowed to pay-tv than for free-to-air. AG Kokott concluded that that is (probably) in violation of art. 4(1) of Directive 2010/13, but not a violation of free market law in general. Sky Italia

AG Mengozzi concluded that the Swedish rule for punishing people who are tardy surrendering their ETS credits is overly harsh. Billerud v. Naturvårdsverket (NL, DE, FR)

In a stack of litigation involving state aid to Dutch “woningcorporaties”, AG Wathelet argued that the General Court was wrong to hold that some of them were inadmissible, especially given that that court had not examined the possibility of applying the new standing rule of art. 263(4) TFEU. For the cases that had been examined substantively by the General Court, the AG generally proposed upholding the judgment. Stichting Woonlinie et al. v. Commission (NL, DE, FR) and Stichting Woonpunt et al. v. Commission (NL, DE, FR)

AG Sharpston proposed holding that the General Court took too much time for the industrial bags cartel case, without however proposing any immediate consequences for that fact. Rather than reducing the fine, she argues that the better approach is to have the applicants bring a separate action for damages. Groupe Gascogne SA v. Commission, Gascogne Sack Deutschland v. Commission and Kendrion v. Commission

According to AG Kokott, it is perfectly fine for Finland to regulate a given product as a medicinal product under Directive 2001/83 while every other Member State considers it a medical device under Directive 93/42. Laboratoires Lyocentre

The General Court again annulled a set of asset freezes in Trabelsi et al. v. Council. In Parker v. Commisison, MRI v. Commission (NL, DE, FR) and Trelleborg v. Commission it partially (a small part) annulled two Commission decisions in the marine hoses cartel case.

This Week and Last Week in Luxembourg

The biggest case this week is probably Joined Cases Libert et al. v. Flemish Government and All Projects & Developments NV et al. v. Flemish Government, where the Court (Judge Tizzano) answered a number of questions coming from the Belgian Constitutional Court. (There's 12 of them, and I honestly don't know what the common thread is supposed to be.) Most notably, it declared the Flemish system for controlling who gets to buy immovable property incompatible with the Common Market.

A Nigerian student studying for his doctorate in Edinburgh may still have the right to have his Nigerian mother in the country with him – his own right of residence rests on art. 12 of Regulation 1612/68, given that his father is an EU citizen – but only if he can convince the national court that he “remains in need of the presence and care of [his mother] in order to be able to continue and to complete his (…) education”. Alarape and Tijani v. Secretary of State for the Home Department

In a related case, the Court (also by Judge Silva de Lapuerta) paid lip service to the genuine enjoyment doctrine while reiterating the holding of Dereci and McCarthy that Member States can all but do as they like to their own citizens who have never exercised their right to free movement. Ymeraga et al. v. Ministre du Travail, de l’Emploi et de l’Immigration


On the day that the Netherlands traded in its formidable Queen for a lightweight King, AG Cruz-Villalón opined that the City of Hilversum was not allowed to include a price regulation term in the contract of sale it concluded with UPC for the city’s cable television network. He argued that the 2002 telecoms package applies to this kind of regulation, and that the contract term in question is contrary to art. 13 of the Access Directive. Only art. 106(2) TFEU might save the city’s regulations. UPC v. Municipality of Hilversum (NL, DE, FR) Cf. e-comm blog

On the same day, AG Bot concluded that International Jet Management, which carries out flights from Russia and Turkey to, amongst others, Germany, can do so using its Austrian license without needing a German license as well. The German rule to the contrary is contrary to art. 18 TFEU. International Jet Management (NL, DE, FR)

A week later that same AG proposed slapping down a plainly discriminatory rule regarding which kinds of certificates of origin (cf. art. 5 of Directive 2001/77) are accepted for the purposes of a renewables quota in Flanders. More through inaction than anything else, the Flemish wound up accepting only Flemish certificates, which is obviously not OK. Essent Belgium v. Vlaamse Reguleringsinstantie voor de Elektriciteits‑ en Gasmarkt (NL, DE, FR) Cf. GAVC Law Blog and European Law Blog

AG Bot was more supportive, however, of the Walloon system for promoting biomass energy, even though it might be considered as discriminating between generation from wood and generation from other biomass. Industrie du bois de Vielsalm & Cie (IBV) SA v. Walloon Region (DE, FR)

AG Kokott did a bit of insolvency law, arguing that honouring an obligation “for the benefit of a debtor” in art. 24 of Regulation 1346/2000 includes a case where a bank pays a debt on behalf of a bankrupt account holder. Christian van Buggenhout en Ilse van de Mierop (liquidators of Grontimmo SA) v. Banque Internationale à Luxembourg (NL, DE, FR) Cf. GAVC Law Blog

This Week in Luxembourg

The Grand Chamber (Judge Ilešič) slapped down the appeal by Laurent Gbagbo and his friends against the General Court’s order dismissing their action for annulment of their asset freeze as manifestly unfounded. The problem was that the applicants were out of time. The Court discussed the general theory of binding time limits before concluding that Gbagbo c.s. hadn’t argued anything specific to substantiate their appeal to force majeure. Gbagbo et al. v. Council

The Romanian gay rights NGO Accept decided to go for broke. They brought an employment discrimination case under Directive 2000/78 against Steaua Bucharest. If that wasn’t ambitious enough, the factual basis of the claim was an interview given by Gigi Becali, the main shareholder and “patron” of the club, which may or may not be enough to consider his statements as representing the club. All three answers of the court favour the applicant. Asociaţia ACCEPT v. Consiliul Naţional pentru Combaterea Discriminării Cf. Journal du Marché Intérieur Blog

In Jyske Bank Gibraltar v. Administración del Estado, Gibraltar banking secrecy clashed with Spanish and EU legislation to combat money laundering (specifically, Directive 2005/60) and the war on money laundering won.

Because Galileo is organised, under Regulation 876/2002 as a Joint Undertaking, i.e. an EU-level PPE, the EU’s staff regulations do not apply. Bark v. Galileo Joint Undertaking

(There was also a whole stack of boring and easy infringement cases.)

In the General Court, the baby seals won in the suit brought by the Canadian fur producers. The ban on seal products was lawfully enacted on the basis of art. 95 EC. The General Court rejected art. 133 EC as an additional legal basis by relying on the titanium dioxide case. The Court also spent some time on proportionality & subsidiarity, on art. 1 P1 and on the United Nations Declaration on the Rights of Indigenous Peoples, but to no avail. Inuit Tapiriit Kanatami v. Commission Cf. European Law Blog

Wifi (2)

Last month, those b*stards at the Dutch Supreme Court ruined one of my favourite legal stories - the one I discussed in this blog post from 2011. What had happened is that the Court of Appeals in The Hague had decided that you couldn't - legally - hack a router, because a router was not sufficiently similar to a computer to qualify under the relevant provision of the Penal Code. The fact that the router at issue in the case was protected with a password was irrelevant. The defendant was (partially) acquitted.

Obviously, this is awesome on countlessly many levels, which is why I've used this case from time to time pour encourager les autres. Especially in criminal law, where the principle of nulla poena sine lege reigns surpreme, the law must be interpreted carefully, based first and foremost on the (plain) meaning of the words used by the legislator. Just because something is, in the words of the Court of Appeals, "socially undesireable", that doesn't mean the Court should therefore stretch the meaning of the law beyond its plain meaning.

For what follows, however, it should be noted that the statute in question is not exactly a paragon of clarity. For the Dutch readers, it says the following:

Art. 138a lid 1 (oud) Sr
Met gevangenisstraf van ten hoogste een jaar of geldboete van de vierde categorie wordt, als schuldig aan computervredebreuk, gestraft hij die opzettelijk en wederrechtelijk binnendringt in een geautomatiseerd werk of in een deel daarvan. Van binnendringen is in ieder geval sprake indien de toegang tot het werk wordt verworven:
a. door het doorbreken van een beveiliging,
b. door een technische ingreep,
c. met behulp van valse signalen of een valse sleutel, of
d. door het aannemen van een valse hoedanigheid.

Art. 80sexies Sr
Onder geautomatiseerd werk wordt verstaan een inrichting die bestemd is om langs elektronische weg gegevens op te slaan, te verwerken en over te dragen.

I'm not even going to attempt a translation. Suffice it to say that the list in the end is clear enough. It lists four things that at least qualify as hacking. The problem, both generally and for this case, is the term "geautomatiseerd werk", which I've never heard or seen anywhere else before or since, and which is clearly meant to refer to computers and such like without actually using the word computer or any other word that might be meaningful to the average Dutch speaker. Hence the problem of working out whether a router qualifies. Even the definition of art. 80sexies, which says that a "geautomatiseerd werk" is a tool used for storing, processing and transferring data electronically doesn't help as much as one might like.

Therefore, the Court of Appeals, like a good Continental court, looked at the legislative history and found that the intention of the legislature was particularly to protect "those who, by using security measures, have indicated that they wished to shield their data from nosy intruders". Given that a router doesn't hold data, the court argued that the legislative history supported the view that they don't count.

Last December, Advocate-General Vellinga had fairly little difficulty supporting this view. After summing up the history of the case and the law, he simply noted that courts are allowed to base their interpretation of the law on statements made in parliament at the time the law was enacted and, citing the same passage from the parliamentary transcripts as the Court of Appeals, he concluded that that court had been correct.

(Interesting side-note: the Attorney-General's appeal brief and the Advocate-General's opinion on this point were both formulated in terms of the Rechtsgut that was allegedly protected by art. 138a Sr. That's a topic I encountered only a few days ago talking about the possibility of a criminal prosecution of Thilo Sarrazin in Germany on the Volokh Conspiracy.)

The High Council (= Supreme Court), however, quoted more generously from the legislative history, focusing particularly on the word "inrichting", which I translated loosly as "tool" earlier. The Court deduced from the transcripts it quoted that the law was intended to protect not only separate devices, but also networks and parts of networks. In other words, while the three activities of storing, processing and transferring data are cumulative, they do not have to be met by each and every single potentially hackable device, only by the totality of the network or group of devices that the device in question belongs to. It follows that routers, too, can be hacked.

While this is a plausible reading, I still think that the Court of Appeals' approach is less forced. After all, the High Council did not address the Rechtsgut problem: Which interests, exactly, was art. 138a Sr enacted to defend? Just because the High Council quoted legislative history does not mean that they engaged in teleological interpretation. They didn't, because they didn't say a word about the intentions of the lawmaker. In fact, if I had to categorise their approach with one of the classic models of legislative interpretation, the only thing I can think of is plain textualist interpretation, except that they used the legislative history instead of a dictionary to discover the meaning of "inrichting". That, I would think, is not something we would want to encourage. If we are going to focus on the meaning of the words in the statute, we should rely on the meaning that ordinary Dutch speakers give those words, or the meaning that can be found in a dictionary. If the legislature wants to deviate from the normal meaning of words, they should write a definition into the law. The fact that they did so here, but not very well, should be no concern of the courts.

Moreover, I think this result violates the principle of in dubio pro reo. Given that there were two plausible interpretations of the statute, the Court should have preferred the one that favoured the defendant. When in doubt, no one goes to jail.

P.S. To clarify: Given that using your neighbour's unsecured wifi does not involve doing any of the four things specifically listed in art. 138a (oud) Sr, nor anything comparable, I would imagine it is still legal. That said, you should consult your lawyer before engaging in anything that is potentially a crime, just to be sure.

This Week in Luxembourg

The Grand Chamber handed down two big cases this week:

On the one hand, it decided not to shoot down the European Patent Court a second time. (Cf. Opinion 1/09) Curiously, Spain and Italy tried to use art. 3(1)(b) TFEU to argue that the EPC deals with an exclusive Union competence and that the EPC somehow didn’t promote integration because it excluded two Member States. More sensibly, but also unsuccessfully, they relied on the last resort requirement and the reasoning of Opinion 1/09 (par. 89-94). Joined Cases Spain and Italy v. Council Cf. IPKat (1, 2) and Verfassungsblog

On the other hand, it crushed the tentative Belgian language peace by forbidding a Flemish rule that required all employment contracts to be drafted in Dutch. Las v. PSA Antwerp Cf. the blog Journal du marché intérieur and Euractiv Cf. Eutopia Law Blog and Außenwirtschaftslupe

Following their fairly poor results in the first batch of railway infringement judgements in February (cf. Commission v. Germany here), the Commission will be pleased with its (partial) win against France. The Court (Judge Borg Barthet, of course) found against France with regard to capacity allocation and the absence of mandatory performance elements in the access charges. Commission v. France

Two appearances of the principle of effectiveness this week: In Irimie v. Administraţia Finanţelor Publice Sibiu the Court (Judge Ilešič) insisted that Romania should not let procedure get in the way of recovering all of an unlawfully levied tax, and in L v. M the Court (Judge Bay Larsen) protected the Environmental Impact Assessment Directive 2001/42 against some German procedural problems.

The Court (Judge Tizzano) followed AG Cruz Villalón and held that the dispute between Systran and the Commission is contractual, rather than tort. As such, it belongs in Luxembourg court. Commission v. Systran

Levi’s is trying to prevent another jeans manufacturer from attaching red labels to its jeans by using a number of its trademarks. As far as I can tell, they won. Colloseum Holding v. Levi Strauss & Co (Judge Juhász) Cf. IPKat

The somewhat creative Dutch Essent privatisation litigation has, predictably, ended up in Luxembourg. AG Jääskinen argued that the ban on privatisation is shielded under art. 345 TFEU and therefore OK. As to the ban on TSOs being part of wider energy conglomerates, the AG concluded that this was a justified limitation of the free movement of capital. The Netherlands v. Essent, Eneco and Delta (NL, DE, FR)

AG Wahl has a nice case where the place where the place where the work is habitually carried out is not the place most closely connected to the contract. (Cf. art. 2 and 6 Rome Convention) Schlecker v. Boedeker

In Martin y Paz Diffusion v. Depuydt and Fabriek van Maroquinerie Gauquie AG Cruz Villalón discussed the case of a trademark owner who was naughty in a way that may or may not have been illegal. The plaintiff withdrew his consent for the defendants to use his trademark in a way that the AG concluded was (probably) OK; consent cannot be irrevocable and abuse of right law cannot provide a permanent remedy here. Cf. art. 5(1) of Directive 89/104.

Even though the Commission is already litigating as a victim in Belgian court, the appeal of one of the elevator cartel cases is still pending. AG Kokott recommended this week that Schindler should lose its appeal. (Its complaint was about the way the Commission and the General Court had treated it like a single entity for competition law purposes.) Schindler Holding v. Commission (DE, FR)

AG Kokott is also potentially saying something interesting about public procurement law & structural funds in a case about a Club Med village on Martinique. The Commission had taken the tough approach, and the AG now proposes annulling the General Court’s decision that sided with the Commission. Now let’s see what the Court does. France v. Commission (NL, DE, FR)

Germany v. Puid is one of those cases that give lawyers a bad name. According to AG Jääskinen, an asylum seeker does not have an enforceable claim for a Member State to use its authority under the first sentence of art. 3(2) of Regulation 343/2003 to examine a claim it doesn’t have to. However, when “a national court cannot be unaware” of the deficiencies of the asylum system of the country that is supposed to examine the claim, it is still required to suspend the transfer of asylum seekers to that country under N.S. and M.E. Sounds right to me…

Anonymity

In a recent judgment, the Supreme Court of the Netherlands held against “The Board of the District Court of [A]”. I would humbly submit that that was taking anonymisation several steps too far.

Discussing the question of anonymity in court documents with my friends on the Volokh Conspiracy, I have generally defended the way the balance is struck in the Netherlands between privacy and transparency. Free speech is not an issue: there is no law forbidding anyone from publishing the names of people convicted of a crime. There is merely an agreed upon custom among the press that people’s surnames are not mentioned. Courts, in their judgments, also don’t mention the names of the individuals before them – although they do mention company plaintiffs and defendants by name – but that is not a free speech problem. Free speech does not require that the government give you information to talk about.

So that leaves transparency. The logic here is essentially the same as for Access to Documents legislation. As the EU legislature put it in recital 2 of Regulation 1049/2001:

Openness enables citizens to participate more closely in the decision-making process and guarantees that the administration enjoys greater legitimacy and is more effective and more accountable to the citizen in a democratic system. Openness contributes to strengthening the principles of democracy and respect for fundamental rights as laid down in Article 6 of the EU Treaty and in the Charter of Fundamental Rights of the European Union.

Specifically in the context of court judgments, it is claimed that transparency allows citizens to know which of their fellow citizens have done wrong, and that it allows them to scrutinise the work of the court better. Against this we put the privacy rights of criminals, and more generally of parties to litigation. We have abolished the pillory as a form of punishment, and it does not do to recreate it in the press.

Based on these considerations, I have generally argued that the right balance is struck by giving the press and the general public free access to the court room – absent special considerations requiring confidentiality of proceedings – and thus allowing them to see and report trials in a non-anonymous way. If the public interest requires that the names of litigants are reported, the press will know these names, and will be free to make that decision, but I can’t just Google my neighbour to see if he’s ever been convicted of anything just because I’m nosy.

The reason why I was thinking of this is the rather curious case of Karel Knip. (His alleged misconduct is at several removes from the case I’m interested in, so there’s no reason not to mention his name.) Karel Knip wrote about the Trafigura case, and did so in a way that noticeably favoured the company in the middle of what was generally highly bad press. While this might lead the neutral observer to question his integrity, the District Court in Amsterdam, in handing down its judgment in the Trafigura case, went well beyond that and took the highly unusual step of mentioning this journalist – who, mind, was not a party to the case – in its judgment. They wrote:

6.10. (...) Trafigura toont daarmee dat zij geen enkel vertrouwen heeft in de rol van de media en de oprechtheid van de journalisten, zij het dat zij één uitzondering maakt en dat is voor de journalist [naam 46]. Hij is de enige die het begrijpt en die - naar de rechtbank moet aannemen met behulp van informatie van Trafigura - tijdens deze strafzaak en nà het pleidooi van Trafigura nog eens komt met een artikel waarin de relatieve onschuld van de slops wordt beschreven.

My translation:

6.10. (…) Trafigura shows in this way that it has no confidence whatsoever in the role of the media and the sincerity of journalists, be it that it makes one exception, for the journalist [name 46]. He is the only one who understands and who – as the court is supposed to assume with the aid of information provided by Trafigura – during this criminal trial and after the concluding remarks of Trafigura brings an article that describes the relative innocence of the slops in question.

(The brackets are the court’s, of course. A slop is technical jargon for a chemical spill.)

The daily newspaper Trouw noticed this, and reported about what the court had said. Paraphrasing the judgment, the newspaper said that the court had questioned Mr. Knip’s integrity. Predictably, he did not like this characterisation, so he took action against the paper before the Press Council, an independent body tasked by the Dutch press with enforcing journalistic best practice. (Note that it is emphatically not a public law body. Even in the Netherlands we like to avoid litigating press stories.)

This is where we get to the second unusual event in this saga. The Council, in examining the complaint, got in touch with the court, asking it whether the newspaper’s interpretation of the judgment was correct. The clerk of the court answered that it was a reasonable interpretation. Upon receiving this answer, Mr. Knip abandoned his case before the Press Council.

He did wonder, as well he might, why on earth the clerk of the court replied to this question. So he made a complaint with the President of the District Court, who backed the clerk, and with the Council for the Judiciary, the governing body of the Dutch court system. The latter replied that this was not a question of judicial misconduct, but one of alleged misconduct in the management of the courts, and therefore someone else’s problem.

Given that this is not a very satisfactory answer, Mr. Knip decided to bring out the big guns by bringing a complaint under art. 13a of the Judiciary Act (Wet op de Rechterlijke Organisatie), a new procedure that was only created in 2011. This involves asking the Procureur-General at the Supreme Court, a magistrate whose independence is guaranteed in the same way as the independence of judges, and whose job includes, in theory, bringing prosecutions against members of the government for abuse of office, to petition the Supreme Court asking that Court to investigate the matter. (Since there has never been a prosecution against a Minister, the Procureur-General normally spends his days as the boss of the Advocates-General at the Supreme Court, joining them in advising the Supreme Court about the best resolution of the cases before it.)

The Procureur-General granted the request and brought his petition, and the Supreme Court heard the Amsterdam court at a hearing in January. (This being a civil law country, there were no spectacular Law & Order theatrics. Instead, the Amsterdam court made a statement via counsel, and Mr. Knip declined to make an appearance.)

Last month, the Supreme Court handed down its judgment in this case, and it was a doozy. The Amsterdam court was reprimanded severely for having allowed the clerk to respond to the Press Council’s question, and for supporting the clerk’s decision afterwards. Judges speak through their judgments, and if any commentary is necessary there is a judge-spokesperson for every court. And the Supreme Court stressed that even that person, who is himself a judge, should be careful not to create the impression that his statements are in any way authoritative. The way the Amsterdam District Court handled this matter could not have been more wrong.

There is just one odd thing about the Supreme Court’s judgment. At the top, it is styled: “Judgment in the matter of the complaint brought by [complainant] against the Board of the District Court of [A]”, and that same style is maintained throughout. The fact that Mr. Knip’s name was removed is entirely normal, and in line with Dutch court practice. The fact that the reference to Amsterdam was also removed is less normal, and also much less defensible. Not only would the custom with regard to companies suggest differently, but so would the underlying first principles. If ever there is a strong case for transparency, it is when the judiciary is trying to clean its own house.

As it happens, there is only one District Court that starts with an A, making this case of anonymisation particularly silly. (There used to be more, but several District Courts were merged in recent years.) While the board of the court is strictly speaking a group of individuals, the same goes for the board of a corporation, such as the board of Trafigura who ended up with their company name printed for all to see in the jurisprudence. As long as the judges in question don’t end up with their names printed in the judgment, I don’t see how the normal rules for anonymisation require that the name of the court be removed from the judgment.

Even if, applying the normal rules, one were to say that this is a borderline case, surely the public interest in observing how the judiciary polices itself is greater than the public interest in transparency normally would be? In other words, the Supreme Court should have erred on the side of naming the board of the Amsterdam District Court.

In order to remedy that omission, I will take the liberty of naming the current members of the board. Board members for courts are appointed for six year terms, so I cannot be sure that these judges were already on the board at the relevant time, but it will have to do. They are:

• Mrs. C.T.E. Eradus, President of the Court and chairwoman of the Board;
• Mrs. E. de Rooij, judge-member.
• Mr. Hans Janssen, non-judge member appointed as of 1 April 2013.

This blog post is based on this Dutch-language story by Hugo Arlman on NJBlog.nl. The opinions expressed here are, of course, my own.

Today in Luxembourg

The case of Mindo v. Commission (judge Arabadijev) gave the Court the opportunity to explore the consequences of joint and several liability for competition fines when one of the persons liable is bankrupt. It held that the General Court was wrong to ask Mindo to prove that the other creditor, AOI, actually intended to recover part of the fine from Mindo. More embarrassingly for the General Court, the main focus of the judgment was the failure of the GC to state adequate reasons.

In the Aarhus case of R. (Edwards and Pallikaropoulos) v. Environment Agency et al., the Court (judge Bonichot) tried to give some usable guidance as to the rule that judicial proceedings in this area of the law should not be “prohibitively expensive”. It concluded that the applicant’s ability to pay is not the only criterion. It also listed:

• The reasonableness of the costs in isolation;
• “The situation of the parties concerned”;
• The claimant’s “prospect of success”;
• “The importance of what is at stake for the claimant and for the protection of the environment”;
• “The complexity of the relevant law and procedure”;
• “The potentially frivolous nature of the claim at its various stages”;  and
• “The existence of a national legal aid scheme or a costs protection regime”.

It turns out that the fact that the claimant has not, in fact, been deterred is not dispositive. Also, the criteria have be consistently applied regardless of the stage of proceedings at which the question is considered. Cf. UK Human Rights Blog and GAVC Law Blog

For prof. Heldeweg, if he still has time for such things, the Court (judge Arestis) has a case on the precautionary principle and the Habitats Directive. Sweetman et al. v. An Bord Pleanála

The Court (judge Toader) held that Regulation 44/2001 is applicable to a claim for recovery of a sum unduly paid by a public entity in the context of Nazi-era reparations. The Court also devoted some attention to the question of whether it is necessary for various co-defendants to live outside Germany. Land Berlin v. Sapir et al.

Berger v. Bavaria dealt with food that was unfit for human consumption but not a health risk. The Court (judge Bay Larsen) interpreted art. 10 of Regulation 178/2002 to permit national legislation that allowed for intervention in these circumstances. Note the – somewhat hypothetical – question 2 posed by the national court, which the Court unfortunately ignored.

In Jeltes, Peeters and Arnold v. UWV, the Court (judge Fernlund) held that its judgement in Miethe v. Bundestanstalt für Arbeit was no longer good law in light of the enactment of Regulation 883/2004.  The plaintiffs were all atypical frontier workers in the sense of Miethe because they lived in Belgium or Germany while maintaining a professional and social life almost entirely in the Netherlands.

This week, the Czech Republic gives us a particularly egregious case of gender discrimination by having a law that lets women retire younger than men, and making their retirement age dependent on how many children they’ve raised. Soukupová v. Ministerstvo zemědělství

In his opinion in Commission v. the Netherlands (NL, DE, FR), AG Wathelet offered not one but two reasons why the Commission should lose. The boring one is that the case concerns a purchase of land, not an award of a concession. More interestingly, he discussed the applicability ratione temporis of Directive 2004/18 to this case, which concerned decisions taken at various moments before and after the enactment and the entry into force of that directive.

While Regulation 44/2001 does not apply to Denmark, there is a parallel international agreement between the EU and Denmark that brings it back in through the back door. AG Kokott did some legal interpretation ninja to explain why the Danish court is allowed to ask a prejudicial question notwithstanding the text of the agreement before arguing that the Regulation applied to the case at bar. Her Majesty’s Revenue & Customs v. Sunico et al.

AG Cruz Villalón argues that, for once, the Turkish plaintiff should lose in an EU-Turkey association agreement case. Specifically, he argues that the passive freedom to provide services is not covered by the Agreement, and in the alternative he argued that the plaintiff’s reliance on that freedom was too speculative, given that she only really wanted to get around the visa requirement in order to visit her family in Germany. Demirkan v. Germany Cf. European Law Blog

AG Mengozzi disentangled a case where Germany refused a visa on the grounds that the applicant was likely to overstay. Cf. art. 21(1) Visa Code. Koushkaki v. Germany (NL, DE, FR)

In other news, I came across the Commission’s notification letter concerning its decision to open an art. 108(2) procedures against a number of Dutch football clubs, including PSV.