Law of the European Union:
Outline
Unit
I: European Community System
·
Historical Perspective and the Basics of
Integration
◊
Foundational Myths
§
the EC is, above all, a long term strategy for
securing peace in Europe
*
the founders set out to avoid the mistakes and
failures of Versailles
*
they believed that the EC should be conceived of
as a long term contract with the necessary flexibility to allow for changing
circumstances and ever increasing cooperation
*
increased solidarity and cooperation will make
war (between France
and Germany)
and “unthinkable” and, therefore, “materially impossible”
›
NOTE: “unthinkable” represents the reality;
while war will never be truly materially impossible, there will be no war
between States that no longer conceive of each other as enemies
§
economic myth: the common market (now the single
market)
*
promote the well-being of the people of Europe
(TCE)
*
prosperity, rise in the standard of living,
closer relationship btw States -> all aim at forming “an ever closer union”
*
stages of economic intergration (Ballasa
theorem)
›
nondiscrimination principles
·
most favored nation (MFN)
·
national treatment (NT)
›
ad hoc trade liberalization
›
free trade area
›
customs union
›
common market
›
economic and monetary union
·
externally impose strict monetary policy on
domestic systems
§
the political myth: community citizenship
*
positive law
*
what does it mean to be a European citizen? how
does Europe understand itself?
·
The Political Institutions
◊
The Commission
§
Nomination and Appointment
*
Nomination of the President of the Commission:
common accord of the Member States; must be approved by the European Parliament
*
Nomination of Commissioners: common accord with
nominee for President
*
Parliamentary approval: all nominees must be
approved in a single vote by Parliament
*
Appointment of the Commission: by common accord
of the Member States
*
NOTE: President is a huge issue in the new
constitution
§
Composition of the College of Ministers:
20 members – 2 from each of the five larger States, 1 from each of the smaller
States
§
Term: 5 years with the possibility of one
renewal
§
Qualities of Commissioners
*
independent:
cannot take instructions from any government or other body; cannot take action
incompatible with duties; cannot engage in other occupations; must act with
integrity and discretion (inc. not accepting certain appointments or benefits
after leaving office)
*
dismissal:
failure to fulfill conditions above or serious misconduct
§
Portfolios: allocated by President, but must
balance national interests and consider general competence and reputation of
nominees
*
sliced thinner and thinner as EU grows
*
NOTE: another huge issue for the Constitution
§
Cabinet: each Commissioner is assisted by a
cabinet whom she appoints
*
restrictions: maximum of six advisors per
Commissioner headed by the chef de
cabinet; represent at least three nationalities; either chef de cabinet or her assistant must be
of a different nationality than the commissioner
§
Directorates-General (DGs) or Services
(Commission divided into 36)
*
qualification: entry exam or secondment of
national administrations
§
Decisions: simple majority, but bound by the
principle of collegial responsibility
*
“clearly defined measures of management and
administration” may be delegated to individual Commissioners
*
decision to issue reasoned opinion and to
commence enforcement against Member States cannot be delegated (some other
decisions as well)
§
Procedure
*
Rules of Procedure may be adopted by commission,
which must also adhere to general principles of administrative fairness and
consistency
*
inalterability of administrative measures
›
translation cannot be left to individual
Commissioners
›
versions cannot be authenticated before text is
ready for notification / publication
*
collegial responsibility
›
in order to insure that decisions were actually
taken by the Commission and correspond exactly to its intention, the entire
Commission must be involved in drafting and finalization
§
Mediation and Conciliation: independence from
national governments allows Commission to give ‘European perspective’ and help
mediate conflicting interests, esp. in the Council
§
Powers and Tasks
*
Formulation of Policy
›
proposals for action
·
small initiatives: draft legislation for
adoption by Council
◊
in most areas the Commission has the exclusive right to propose legislation;
◊
thus, nearly all Council law-making power begins
with such a proposal;
◊
Commission has broad discretion in the proposals
it puts forward;
◊
Parliament and the Council can often request
that the Commission propose certain legislation, but they cannot force the
Commission to do so;
◊
why is this such a huge power?
§
first draft always has great influence over the
outcome; it is the starting point against which all changes are measured
§
they set the agenda
·
large initiatives: proposals for EU action
within broad field
›
allocation of resources: Commission drafts the
budget
›
policy decisions granted by Treaties
·
free movement of persons: joint right of
initiative re. secondary measures with Council
·
legislative and regulatory powers may be
delegated to Commission by Council
◊
NOTE: how does Constitution change the role of
the Commission re. delegated powers
·
ECJ has held that where Commission is granted
specific tasks (eg. encouraging cooperation and facilitating coordination btw
Member States in social policy – such as emp, labor rela’ns, work cond,
training, and social security) it has power of decision necessary to carry out
these tasks
*
Executive and Administrative Function
›
policy implementation
·
NOTE: EU has relatively small bureaucracy, thus
it must rely of MSs for implementation of policy objectives;
·
in major policy areas Commission makes rules to which national
administrators must adhere, and ensures
compliance;
·
thus, the administrations of the individual MSs’
are also the administration of the EU;
·
rule making power usually delegated by Council;
rules often made in conjunction with committees of national reps.
›
budget – responsible for collection and
expenditure
›
reports – obliged to issue number of reports inc
General Annual Report
›
intervene in every
case before the ECJ
§
the Commission is an autonomous political body –
so why is it so important for each member to have a commissioner? and why do
MSs fight so fiercely for the portfolios given their commissioner?
*
question of legitimacy
– inform Commission of the values of particular epistemic community;
Commissioner from a MS will understand and consider the MS’s position
*
shrinking the number of Commissioners will
change the paradigm of legitimation – major divisions are no longer along MS
lines, but along left / right, male / female, urban / rural
›
it’s not at all clear whether the EU is really
at this point; will the new MSs in 2004, who are widely considered more
nationalistic
›
the social engineer will argue that the
structural change must proceed the social reality, but, two critiques:
·
this isn’t always true (see Canada);
·
this is true, but we don’t want such a social
reality (don’t want to be a US,
Australia,
etc.) – of what kind of union do we want to a member?
◊
Council
§
General
*
Presidency
›
rotates on a six month basis
›
controls agenda for Council meetings
·
this power has been used to some extent to usurp
the Council’s policy-making and mediation functions
›
MSs usually have an interest in achieving
tangible results during their presidency (e.g. Italy – Berlusconi – wants to
complete the Constitution so that it can be signed in Rome)
*
Transparency
›
least transparent: secret deliberations, no full
record of business is published, no permanent political presence, information
channels have not been established to the same degree as the other institutions
*
Accountability
›
not accountable to any EU institution
›
accountability at national level varies
·
some governments (e.g. UK and Denmark) insist
that the democratic legitimacy of the EU is rooted in the role national
parliaments play in overseeing their government’s involvement in the Council
*
Qualified Majority Voting
›
Treaties have begun to call for QMV in a number
of situations; however, the unwillingness of the Council to commit fully to QMV
is a persistent theme
›
MSs have a set number of votes (est. by treaty);
but weighting does not fully reflect population
§
European Council
*
resolving conflicts: deal-breaking horse
trading; breaking logjams
*
long-term strategic political guidance
*
foreign policy: only group that can have proper
sensitivity to the two pulling interests; namely,
›
only by speaking with one voice can they have
global influence equal to their economic might;
›
each country wants to preserve its ability to
disagree
§
Council of Ministers
*
originally Foreign Ministers, but now varies
depending on topic (e.g. Agriculture,
§
COREPER: permanent mission of each MS to the EU
(specifically the Council)
*
de facto approve all legislation that is
uncontroversial
*
allows Council of Ministers to focus on tough
issues
*
cannot take ‘decisions’ in a legal sense
*
both the MSs’ Trojan horse within the EU and the EU’s Trojan horse within the MSs
◊
Parliament
§
626 representatives elected in a five year cycle
based on a set distribution among the MSs
§
P is charged with drawing up uniform electoral
procedure, and must assent to any provisions adopted by Council (adoption
requires unanimity) for this purpose
§
Legislative Process
*
before SEA only had to be consulted by Council
on Commission proposals
§
Supervisory Powers
*
put questions to the Commission
*
discuss the annual general report
*
power of censure over Commission: can require
resignation of entire Commission on a two-thirds vote
§
Democratic Deficit
*
the case for greater Parliamentary powers was
traditionally defeated by pointing to low caliber and low level of commitment
of members;
*
absence of coherent transnational party
structure;
*
an effective Parliament with a full range of
legislative and supervisory powers would acknowledge that EU has become
something approaching a federal association;
§
Single European Act (SEA)
*
power of assent over accession of new members
*
cooperation procedures: second reading of and
propose amendments to certain legislative acts
*
extend range of provisions requiring a
Parliamentary opinion
§
Treaty of Masstricht
*
assent provisions expanded
›
uniform electoral procedure
›
reorganization of structural funds
›
supervision of some aspects of ECB
›
request Commission to submit proposals
›
co-decision (with Council) included in many
provisions
*
guardian of interests of citizens
›
investigate allegations of maladministration
›
right of EU residents to petition Parliament
§
intergovernmental role
*
very limited in foreign policy sphere;
*
SEA: most be kept informed concerning European
Political Cooperation
§
Parliament and the Commission
*
budgetary weapon: can withhold discharge in
relation to expenditure
*
instead of censure, may convene a Committee of
Independent Experts (CIE)
*
transparency and honesty: Commission must supply
information P feels is necessary and it has a right to receive
§
European Ombudsman
*
inquires, decisions and recommendations regarding
individual complaints
*
undertaken investigations that have exposed
areas of resistance within the institutions
*
areas of particular concern
›
access to documents / transparency
›
role of Commission in enforcement proceedings
against MSs
›
need for a Code of Good Administrative Behavior
›
problems with late payment of creditors
*
resolving disputes
›
attempts to bring about friendly settlement
between parties if maladministration is found
›
may close a file with remarks critical of an
institution or body
›
may make formal finding of maladminstration with
formal findings
·
Structural Issues
◊
three pillars
§
1st pillar: common market – European (Economic)
Community (in the strict legal sense) – Community law, ECJ, etc.
§
2nd pillar: common foreign affairs and defense
policy
§
3rd pillar: common justice and domestic affairs
policy
Unit
II: The Community System of Judicial Remedies
·
Structural Overview (Unit II-1)
◊
Articles 226, 227 & 228
§
226 provides method for Commission to bring
cases against Member States; four step process:
*
notify MS that Commission believes it has failed
to fulfill an obligation
*
allow MS to submit observations
*
issuance of a reasoned opinion (if Commission
still believes obligation has not been fulfilled)
*
bring case (if MS does not comply with reasoned
opinion)
§
227 provides method for Member States to bring
cases against one another
§
228 provides for Commission oversight of Member State
compliance with ECJ decisions
§
the important point is that the process prior to
bringing a case provides a number of opportunities for resolving disputes
without bringing the matter to trial, thus limiting litigation and the
attendant ill will
◊
Article 234
§
provides method for ECJ to give preliminary
rulings on interpretation of the Treaty when requested to do so by Member State
courts
§
enlists the habit of obedience and compliance
pull of domestic courts in defending EC system
§
solves (unintentionally) problems of monitoring,
resources, and discretion that would prevent the Commission from adequately
policing the Treaty
*
private attorney general model: individual
self-interest will ensure that MS violations do not go unchallenged
*
compliance of domestic courts, especially lower
courts, is insured by appealing to the psychology of judges
›
gives lower courts power to overturn national
legislative acts (which in many countries they do not have even on
constitutional grounds)
›
removes judges’ fear that they may be forcing a
stricter interpretation of the Treaty on their State than is applied in other
States (harmonizes interpretation)
*
NOTE: rests on a belief in a strong judiciary
·
Articles 226, 227 & 228 In Action (Unit II-2)
◊
considerations for the Commission in determining
whether to bring a case
§
increasing MS compliance (foremost concern)
§
costs: limited resources (time and money), have
to focus on the important cases
§
ECJ docket
*
don’t want to clog the courts with needless
cases
*
justice delayed is justice denied, etc.
§
EC reputation
*
bringing needless cases would bring the entire
system into disrepute
*
also, judgments that cannot be enforced in a
timely manner (eg. b/c Parliament is dissolved) make it look as if ECJ is
ineffectual
◊
Liability of MS for failure of parliament to act
§
as long as it has complied with the procedures
set out in Art. 226, the Commission may bring an action whenever it wants (Case
7/68: Commission v. Italy
(Art treasure case), 3 – 1968)
*
case brought when it was clear that Italian
Parliament was going to be dissolved preventing them from enacting legislation
that would have brought Italy into compliance; the legislation had already been
approved by the Senate and was awaiting parliamentary action; Italian
government (executive) claims there was nothing more they could have done (ie.
they were attempting to comply)
*
lessons
›
MS are strictly liable for failure to fulfill
obligations – domestic difficulties are no defense
·
every branch of MS gov’t is liable – want to
discourage free-riding
*
dissolution of parliament is not force majeure; MS is still liable (Case 77/69: Commission v. Belgium (Timber
Tax case), 14 – 1970)
◊
Partial implementation
§
partial implementation of a Community Directive
does not make case inadmissible even if the specific allegations of the
Commission are of complete noncompliance (Case
117/95: Commission v. Italy (African horse sickness), 12 – 1996)
*
despite AG’s opinion that the case should be
held inadmissible because the MS ought to be required only to reply to the
specific allegations, ECJ found partial compliance was not a satisfactory
answer
*
Italy
had jerked the Commission around, not raising the claim of partial compliance
(based on a 1954 Presidential Decree) until the matter was before the ECJ
*
even the AG thought that Italy should
bear its own costs (usually the loser pays)
*
NOTE: this decision seems to trivialize the Art.
226 procedures, even though the ECJ clearly thought it needed to send a signal
to MS to take 226 clearly, in so doing they themselves do not take it seriously
◊
Liability of MS for breach of CL by the
judiciary
§
such cases were not considered for quite
sometime due to ECJ’s reliance on domestic courts for the effectiveness of Art.
234
§
however, now that the relationship is solidly
established they are beginning to consider breaches due to acts of the
judiciary
◊
Moot cases
§
even if the reason for the case has disappeared,
a decision by the ECJ can be important in “establishing the basis of a
responsibility that a Member State can incur as a result of its default, as
regards other Member States, the Community or private parties” (¶ 11) (Case
39/72: Commission v. Italy (Slaughtered cows case), 19 – 1973)
*
case may act as a signal to private individuals
(in other MS) that they have a right which may be vindicated in the courts –
allows private attorney general model to operate
§
“the purpose of judgments delivered under
Articles [226 to 228] is primarily to lay down the duties of Member States when
they fail to fulfill their obligations (¶ 15) (Cases 314 and 136/81 and 83/82: Procureur de la Republique, 34 –
1982)
*
“it is the duty of the national court … to infer
◊
Principle of collegiality
§
decision to issue a reasoned opinion may not be
delegated (¶ 36)
*
Commission must deliberate because it is
required to exercise political discretion
*
this is a message to the legal services:
›
keep the Commission informed
›
let the Commission know what choices it has to
make; differentiate professional judgment from political discretion
◊
Counter measures and reciprocity
§
“…in no circumstances may the member states rely
on similar infringements by other member states in order to escape their own
obligations under the provisions of the treaty” (¶ 8) (Case 142 and 143/80: Essevi, 23 – 1980)
*
NOTE: in this respect CL is unlike normal
international law; the duty is not contractual between the MS, instead it is
owed to the Community and to the people
of the MS
◊
Compliance
§
MS ought to be given sufficient time to comply
with ECJ ruling; this is particularly the case where the obligation in question
requires the MS to achieve a certain result by altering and monitoring
practices throughout the country rather than simply enacting legislation (Case 278/01: Commission v. Spain, AG Opinion,
39 – 2001)
·
Article 234 In Action (Unit II-3)
◊
“…any court or tribunal of a Member State…”
§
where the annulment and withdrawal of a body’s
members as well as their impartiality and independence are provided for by law,
and where the body exercises a judicial function, it is a court or tribunal for
purposes of Art. 234 (Case 54/96: Dorsch
Consult, 5 – 1997)
§
ECJ will not accept preliminary references from
arbitration panels (Case 102/81: Nordsee,
11 – 1982)
*
however, the ECJ suggests that questions of EC
law can be raised in national court proceedings ancillary to arbitration and,
if so, a preliminary reference can be made
§
insofar as domestic rules require national
courts to grant an application for annulment of an arbitration award if the
application is based upon failure to observe national rules of public policy,
those courts must also grant applications based upon failure to comply with the
EC Treaties (Case 126/97: Eco Swiss,
14 – 1999)
§
see also AG Ruiz-Jarabo’s review of the ECJ’s case
law re. “national court or tribunal” and proposal for tightening the definition
(which was rejected by the ECJ) (Case
17/00: De Coster, 18 – 2001)
◊
discretion to make a reference
§
lower court may make a reference under Art. 234
even if domestic rules bind it on points of law by rulings of a superior court
(Case 166/73: Rheinmühlen-Düsseldorf I,
38 – 1974)
§
however, the decision by a lower court to refer
remains subject to judicial remedies available under domestic law (ie. appeal)
(Case 146/73: Rheinmühlen-Düsseldorf II,
40 – 1974)
*
in other words, the superior court may quash an
order to refer, in which case the ECJ will not consider the questions referred
§
NOTE: this question arose in the context of case
that was being reconsidered after the superior court quashed the original
judgment
◊
duty to refer
§
“…necessary
to enable it to give judgement…”
*
referral is not necessary if the answer to the
question cannot affect the outcome of
the case (eg. the Community law claim is one of two or more, and the other is
independently decisive)
§
“Where such a question is raised…”
*
not raised if it has already been answered by
the ECJ;
›
materially identical
›
already dealt with the point of law (even if not
materially identical and even if not
decided on a preliminary reference)
*
or, if
the answer is so obvious (to the court before whom the question is raised, but
the court must also believe that it would be equally obvious to the ECJ and to
courts in all MSs) as to raise no reasonable doubt re. interpretation
›
but
you must consider the following:
·
different languages may produce different
interpretative problems;
·
legal concepts may have a different meaning in
Community law;
·
context / interpretation in light on CL as a
whole
§
binding nature of preliminary references
*
one upshot of this decision is that answers to
preliminary references are binding erga
omnes (otherwise it wouldn’t make any sense to say that the question or
point of law had already been addressed)
§
“…court or tribunal … against whose decision
there is no judicial remedy…”
*
court from which appeal is available only upon a
declaration of admissibility (granting of certiorari) by higher court is not a
“court or tribunal … against whose decision there is no judicial remedy” (Case 99/00: Lyckeslog, 45 – 2002)
§
an international tribunal (in this case the
Benelux Court) operating within the EC boundaries may make preliminary
references to the ECJ; moreover, insofar as such a court is the court of last
appeal, it is required to make a preliminary reference (Case 337/95: Parfums Christian Dior, 120 – 1997)
§
a preliminary reference to determine the
validity of a law is not admissible in a case where the a party argues before
the national courts of one MS that breach of contract was justified with the
need to comply with the law of another MS because it is not clear why a
reasonable belief in the need to comply with the other MS’s law depends upon
the validity of the law (Case 318/00:
Bacardi-Martini, 125 – 2003)
◊
Art. 234b: “preliminary rulings concerning … the
validity and interpretation of acts of the institutions…”
§
purpose of Art. 234: uniform interpretation of
the Treaties
*
necessity for legal certainty: once the ECJ has declared an act of one of the
institutions void, national courts ought no longer apply the act (Case 66/80: International Chemical
Corporation, 50 – 1981)
*
national courts do not have the power to declare
community acts invalid; if they believe an act to be invalid, they must make a
preliminary reference to the ECJ (Case
314/85: Foto-Frost, 53 – 1987)
›
on the other hand, national courts against whose
decision there is a judicial remedy need not make a preliminary reference in it
believes that a claim of invalidity of a community act is unfounded
§
suspension of enforcement of a community act
*
a national court may suspend enforcement of a
community measure while a preliminary reference is pending if it entertains serious doubts as to the validity of the
act (Case143/88 & 92/89: Zuckerfabrik,
58 – 1991); however, in so doing the national court must
›
NOTE: this is an example of purpose (uniform
enforcement) overcoming language (“may
refer”)
›
determine that enforcement of the contested
community act would result in serious and
irreparable damage; and,
›
take into account the interests of the community
·
whether the act “would be deprived of all
effectiveness if not immediately implemented (¶ 31)
·
whether “suspension of enforcement is liable to
involve a financial risk to the community” (¶ 32)
›
the national court “must set out … the reasons
for which it considers … the act to be invalid” (Case 465/93: Atlanta II, 64 – 1995, at ¶ 36)
§
failure of a community institution to act
*
a national court may not make a preliminary
reference based upon failure of a community institution to act, nor may it
grant interim measures pending community action (Case 68/95: T-Port I, 71 – 1996, at ¶ 53)
*
actions for failure to act must be brought with
either by
›
a MS before the ECJ (under Art. 230)
›
an individual before the Court of First Instance
(under Art. 230)
§
temporal effect of preliminary references under
234b
*
in the interest of legal certainty, the ECJ may
hold that a preliminary reference applies only prospectively (see Case 24/86: Bliazot, 75 – 1988, at ¶ 34)
›
in such cases, the ruling will only be applied
to legal relationships arising after the judgment is handed down and to those
individuals whose cases involving the same point of community law were pending
at the time of the decision
*
in some cases, the ECJ will determine the
appropriate level of compensation due when an act is found invalid (see Case 4/79: ONIC, 79 – 1980)
◊
jurisdiction of the ECJ
§
a preliminary reference may be made even in
cases that are “purely internal” (Cases
515/99 & 527-40/99: Reisch, 82 – 2002)
*
“A reference for a preliminary ruling … may be
rejected … only if it is quite obvious
that the interpretation of Community law sought … bears no relation to the
actual nature of the case or the subject-matter of the main dispute” (¶ 25)
§
Art. 177 “does not give the Court jurisdiction
to take cognizance of the facts of the case, or to criticize the reasons for
the reference”; national court need not expressly specify the provisions of the
Treaties requiring interpretation (Case
13/68: Salgoil, 86 – 1968)
§
ECJ need not entertain a preliminary ruling if
the ruling arises in the context of a false dispute (ie. the dispute is an
expedient to have a law declared invalid in a case with no opposition) (Case 104/79: Foglia-Novello I, 88 –
1980)
*
Italian wine dealer sold Italian liqueur to a
French woman; the parties stipulated that the buyer would not be liable for any
duties contrary to provisions for free movement of goods; the dealer adopted a
similar contract clause in relation to the transporter; nonetheless, the
transporter paid a French imposed duty without protest and charged the dealer;
when the dealer attempted to recover the amount form the buyer in an Italian
court, the buyer refused on the basis of their contract; both parties argued
that the duty was incompatible with Community law
§
manufacturing a preliminary reference regarding
the compatibility of a MS law with Community law before the courts of another
MS will prevent the MS whose legislation is called into question from arranging
an appropriate defense of its laws (Case
244/80: Foglia-Novello II, 91 – 1981); in such cases is not irrelevant
whether the proceeding is really a dispute between the parties or rather is
directed against a MS who is not a party
§
the ECJ may entertain a preliminary reference
even if the persons against whom the proceedings are aimed are unknown at the
time of the reference; “The decision at what stage in proceedings a question
should be referred to the Court of Justice for a preliminary ruling is …
dictated by considerations of procedural economy and efficiency to be weighed
only by the national court”; once the accused are identified, the national
court may again refer a question to the ECJ to ensure that a fair hearing is
given (Case 14/86: Pretore di Salò,
97 – 1987)
§
preliminary reference is admissible where the
dispute in question in the main action is not a procedural device as evidenced
by the fact that the national court allowed interveners to argue that the
national law in question was not contrary to Community law as long as the
referring court “sufficiently defined the national legislative background and
clearly explained why it consider[ed] that the questions it raised are
relevant” (Case 379/98: PreussenElektra,
100 – 2001, at ¶¶ 44, 47)
§
preliminary reference is admissible where a MS
has incorporated Community law into its domestic law and thus given effect to a
regulation in purely internal situations (Case
28/95: Leur-Bloom, 117 – 1997)
*
in such cases the Community has an interest in
maintaining uniform interpretation of the regulation in question
*
ECJ rejects AG’s argument that the objectives
and context of national legislation may be different than those of Community
law (see AG’s opinion at 111-13, ¶ 56)
*
moreover, the AG argues that is not wise to
interpret a regulation in a situation not contemplated by the Community
drafters, especially where the national legislation applies to situations that
Community law was not intended to reach
›
any indirect threat to the proper interpretation
of Community law by the ECJ is minimal; the ECJ could determine the correct
interpretation as soon as a case arose in a Community law context
*
in addition, such situations fall outside the
scope of Art. 234b, which gives the ECJ jurisdiction only over the validity of
Community acts
*
finally, admitting such references may result in
a huge increase in the volume of preliminary references, delaying justice for
more worthy references and preventing the ECJ from performing its true
functions
·
Article 230 (Unit II-4)
Unit
III: Direct and Indirect Effect
·
purpose
◊
in order for Art. 234 to function successfully,
Community norms must create individual rights of action
◊
the doctrine of direct effect is effectively the
way in which individual causes of action are realized
◊
although often spoken of in terms of ECJ respect
for individual rights, it is better conceived of as a necessary means of
enforcing Community law through the private attorney general model
·
the basic formula
◊
a provision of Community law confers rights upon
individuals (ie. has direct effect) if it is clear, precise, and unconditional
(ie. not qualified by a reservation requiring positive legislative enactment) (Case 26/62: van Gend & Loos, 5 –
1963)
◊
a provision meeting these requirements is
“complete, legally perfect, and … capable of producing direct effects” (Case 57/65: Lütticke, 26 – 1966)
·
spelling out the doctrine
◊
that a provision describes MS as being subject
to its obligations does not imply that individuals cannot benefit from it (Lütticke)
◊
Community law produces rules that apply to all
legal relationships located within the territory of the Community (ie. direct
effect extends to private relationships – relationships between individuals –
not just relationships between individuals and the MS) (Case 36/74: Walrave and Koch, 28 – 1974)
◊
an article need not produce direct effect as a
whole in order for certain obligation contained therein to produce direct
effect (Case 43/75: Defrenne, 31 –
1976)
§
ECJ distinguishes between direct discrimination
that can be identified on the basis of criteria explicitly included in Art. 119
(equal work and equal pay) and indirect discrimination which can only be
identified by more explicit provisions (either Community or national)
§
the former are given direct effect, while the
later are not
·
direct effect of directives
◊
Article 249 (ex 189)
§
“regulations” are explicitly given direct effect
§
“directives”, on the other hand, leave “choice
of form and methods” to MS
◊
directives may produce direct effects
§
it does not follow from the fact that
regulations may by their very nature produce direct effects that other
categories of acts may not have similar effects (Case 41/74: van Duyn, 43 – 1974)
§
MS “may not rely, as against individuals, on its
own failure to perform obligations eg. [adopt implementing measures] which [a]
directive entails” (Case 148/78: Ratti,
48 – 1979)
*
the result is that directives have direct effect
only in relationships between individuals and MS, not between private
individuals
§
an individual who is exempt from the
requirements of a directive cannot be required to prove that they fulfill such
requirements; however, the MS may determine, by its own investigation, that
such requirements are not met (Case
21/78: Delkvist, 62 – 1978)
§
in the period prescribed by a directive for
transposition into national law, a MS may not adopt legislation inconsistent
with the directive (ie. “measures liable seriously to compromise the result
prescribed”) (Case 129/96:
Inter-Environment Wallonie, 66 – 1997)
·
vertical and horizontal direct effect
◊
NOTE: remember that directives have only
vertical (btw. an individual and a MS), not horizontal (btw. individuals),
direct effect
◊
public authority
§
an individual may rely on a directive as against
a MS regardless of the capacity in which the MS is acting (eg. employer or
public authority) (Case 152/84: Marshal I,
72 – 1986)
§
“a body …
which has been made responsible [by law]
… for providing a public service under the control of the state and has for
that purpose special rights beyond those which result from the normal rules
applicable in relations between individuals is
included … among the bodies against which the provisions of a directive capable of having direct
effect may be relied upon” (Case 188/89: Foster-British Gas, 77 –
1990)
◊
“indirect effect”
§
in an action between individuals, a court must,
where possible (ie. where it is within the gamut of plausible interpretations),
interpret national law so as not to be inconsistent with a Community directive even
if this is not the interpretation which the court would otherwise have chosen (Case 106/89: Marleasing, 80 – 1990)
◊
NOTE: the final way in which the ECJ has
attempted to close the enforcement gap left by refusal to give directives
horizontal direct effect is imposition of liability on MS for damages suffered
due to non-implementation (this is considered directly below in Remedies)
Unit
IV: Remedies
·
system of tortious liability (Case 6/90 & 9/90: Frankovich, 1 –
1991)
◊
are provisions of the directive unconditional
and sufficiently precise?
§
identity of persons entitled to guarantee
*
employees with claims against insolvent
employers
§
content of guarantee
*
although MS may chose between several possibilities,
it is nonetheless possible to establish the minimum
guarantee
§
identity of person liable to provide guarantee
*
state cannot be clearly and precisely identified
as the person liable for unpaid claims because there is too much discretion in
the organization, operation and financing of the envisioned guarantee
institutions
§
thus, there is no direct effect
◊
right to reparation (ie. establishment of a
system of tortious liability for MS failure to implement obligations)
§
three conditions must be met (¶ 40)
*
result prescribed by directive must entail the
grant of rights to individuals
*
must be possible to identify the content of such
rights
*
there must be a causal link between the breach of the MS’s obligation and the loss
suffered
§
MS must establish procedural rules for legal
proceeding through which individuals may obtain reparation from the MS
·
where the result proscribed by a directive would
establish an individual right vis a vis other individuals, the MS is liable for
damages resulting from failure to implement the directive (Case 91/92: Faccini Dori, Unit 3, p83 – 1994)
·
revising and expanding the system of
non-contractual liability (Case 46/93
& 48/93: Brasserie du Pecheur, 13 – 1996)
◊
even if a directive does not have direct effect,
Community law confers a right to reparation if the following three conditions
are met:
§
rule infringed must be intended to confer rights
on individuals
§
breach must be sufficiently serious (this is new – a change from Frankovich); for this determination the
following factors may be taken into consideration
*
clarity and precision of the rule
*
measure of discretion left to MS or Community
authorities
*
intentional v. involuntary infringement
*
excusable v. inexcusable error
*
whether the position taken by a Community
institution may have contributed to the omission
*
adoption or retention of practices contrary to
Community law
§
direct causal link
·
enforcement before national courts
◊
resistance to this line of decisions in MS
§
many feel that by creating a new tort, the ECJ
is encroaching on national domain
§
this is even more worrisome given that the tort
created (liability for legislative action or inaction) is precluded in most MS
§
even though the EC institutions are also liable
for actions which exceed there powers, the ECJ has given the institutions
tremendously broad discretion
◊
all of this means that MS court are likely to likely
to be quite strict in their interpretation of “sufficiently serious” breaches
◊
however, after the Factortame decision, the English courts held that England was
liable for breach of Community law
·
effectiveness of national court remedies
◊
(Case
33/76: Rewe, 102 – 1976)
◊
(Case
158/80: Rewe “Better-Buying cruises”, 104 – 1981)
Unit
V: Supremacy
·
supremacy before the ECJ
◊
like much of the ECJ’s jurisprudence, the main
arguments supporting its assertion of the supremacy of EU law are teleological,
but they are also structural
◊
the paradigm case: Case 6/64: Costa v. ENEL, 2 – 1964
§
Treaties created a Community
*
of unlimited duration
*
with its own institutions
*
with its own personality
*
with its own legal capacity
*
with its own capacity of representation on the
international plane
*
with real
powers stemming from the limitation of MS sovereignty or transfer of powers from MS to the Community
§
thus, MS have created a body of law which binds
both their nationals and themselves
§
this law cannot achieve its objectives if the
executive force of Community law varied from MS to MS
*
thus, national laws cannot renounce Community
obligations
*
any other conclusion would undermine the legal
basis of the Community itself
◊
procedural rules
§
“in the absence of [harmonization measures], it
is for the national legal order of eash MS to designate the competent courts
and to lay down procedural rules for proceedings designed to ensure the
protection of the rights which individuals acquire through the direct effect of
Community law” (Case 45/76: Comet, 4
– 1976, at ¶ 13)
§
two qualifications
*
non-discriminatory application: the procedural
rules must not be “less favorable than those governing the same right of action
on an internal matter” (¶ 19)
*
procedural rules and statutes of limitations
must not make it “impossible in practice [for individuals] to exercise rights”
acquired through the direct effect of Community law (¶ 16)
◊
application of Community law
§
“every
national court must … apply Community law in its entirety
and protect rights which the latter confers on individuals and must accordingly
set aside any provision of national law which may conflict with it” (Case 106/77: Simmenthal, 7 – 1978)
§
this applies even to those courts which under
domestic rules do not have power to set aside national law
§
in effect, procedural options regarding
application of Community law are removed from MS discretion
§
all national courts are thus transformed into
enforcers of Community law
·
supremacy and national constitutions
◊
Germany
§
secondary community law will be subject to
national constitutional review so long as there is (a) no European bill of
rights (“codified catalogue of fundamental rights”), and (b) no effective,
democratically elected body at the heart of the Community system (full
responsibility “on a political level”) (Internationale
Handelsgesellschaft – Solange I, German Federal Constitutional Court, 36 –
1974)
*
transfer of powers to the Community does not
mean that exercise of those powers will not be subject to constitutional review
*
suggests that the relationship between the
Community and MS is not entirely hierarchical
§
principled pragmatism: while not completely
abandoning its right to subject Community law to constitutional review in
extreme and unimaginable cases, the German court recognized that ECJ has become
committed to the protection of fundamental rights; as long as this situation
persists, the German court will not exercise its jurisdiction to review
Community law (Solange II, 41 – 1988)
◊
United
Kingdom
§
English Court of Appeal located supremacy of
Community law not in the Treaties themselves but in the domestic law giving
effect to the treaty of accession (European Communities Act) (Macarthy’s v. Smith, 72)
*
since the UK has no written constitution, the
court found it necessary to retain a buffer to complete Community supremacy in
the form of Parliament
*
in short, Parliament has the power to override
Community law (and perhaps leave the EC) in order to defend fundamental legal
values of the country
Unit
VI: Competencies
·
Treaty Provisions
◊
Article 5
§
Community shall act within limits of powers
conferred and objectives assigned by Treaty
§
principle
of subsidiarity: in areas of dual competence, Community shall take action
only if:
*
objectives of proposed action cannot be
sufficiently achieved by MS
*
objectives can, by reason of scale or effects of
proposed action, be better achieved by Community
§
principle
of proportionality: Community action shall not exceed that which is
necessary to achieve the objectives of the Treaty
◊
Protocol on the application of the principles of
subsidiarity and proportionality
§
all Community legislation shall state its
rationale “with a view to justifiying its compliance with the principles of
subsidiarity and proportionality”
§
guidelines in assessing whether legislation
meets principle of subsidiarity
*
issue has transnational
aspects which cannot be regulated by individual MS
*
MS action alone or lack Community action would
conflict with the Treaty (ie. distort competition, act as disguised restriction
of trade, weaken economic and social cohesion) or would otherwise significantly damage MS interests
*
action would produce clear benefits compared to MS action
§
proportionality
*
action shall be as simple as possible
*
will go no further than necessary
*
and will leave as much discretion as possible to
MS
·
Directive of Advertising and Sponsorship of
Tobacco Products
◊
background
§
Article 152 (ex 129) (4)(c) excludes
harmonization measures in protection of human health
§
Directive 98/43, effectively banning all tobacco
advertising within the Community, was justified as a measure eliminating (a)
obstacles to the free movement of goods; and, (b) distortion of competition
◊
Germany
argued that the directive went beyond the powers of the Community and should
therefore be annulled (Case 376/98:
Germany v. Council and Pariliament, 8 – 2000)
◊
ECJ:
§
free movement of goods
*
while a prohibition might be justified with
regard to certain types of advertising, other types of advertising do not in
any way limit the free movement of goods
*
free movement of goods gives the Community power
to regulate in areas that it wouldn’t otherwise be allowed to regulate, but the
specific use of power must be justified by relating the regulation to the good
whose free movement would otherwise be obstructed
·
Weiler: The Transformation of Europe,
45 – Yale L.J. 1991
◊
the Treaties have been constitutionalized and
the EC has become roughly a federal state, but how did it get here?
§
answering this requires an analysis of structure and process
*
relationships between
›
political power in center and periphery
›
legal norms and policies of center and periphery
*
division of material competences (enumerated
powers)
◊
exit and voice
§
definitions
*
exit: the ability to abandon an organization in
the face of unsatisfactory performance
›
selective exit (in EU context): MS seeking to
avoid obligations
*
voice: mechanism for intra-organizational
correction and recuperation
§
interaction
*
stronger voice reduces demand for exit; while,
conversely, closure of exit leads to demand for enhanced voice
◊
the “foundational period”
§
growth of legal federalism (closure of selective
exit)
*
the ECJ established doctrines that foreclose MS
option of selective:
›
direct effect
›
supremacy
›
implied powers (inc. complementary doctrines of
exclusivity and preemption
›
human rights (necessary to get national courts
to go along with supremacy)
*
moreover, development of preliminary reference
Article 234 addressed the weaknesses of Articles 226-28, thus substantial
increasing the effectiveness of review of conflicts between national law and
Community law
§
political confederalism (dynamics of voice)
*
at the same time, MS retained a veto over all
legislation
*
this decisive influence over normative outcomes
made the emerging legal structure acceptable
◊
1973 to the Mid-1980’s: Mutation of Jurisdiction
and Competences
§
expansion of Community jurisdiction (or the
substantial erosion of the enumerated powers constraint)
§
jurisdictional mutation
*
extension: mutation within areas of autonomous
Community jurisdiction (eg. development of human rights doctrine, standing of
Parliament)
*
absorption: exercise of Community powers which
impinge areas of MS jurisdiction beyond explicit Community competence
*
incorporation: hasn’t really happened, but it’s
not inconceivable that Community human rights doctrine might be used to review
national law
*
expansion: original legislation outside of
Community jurisdiction has remarkably not ignited major disputes; why not?
›
incrementalism
›
part of the strategy of revival after Luxembourg
crisis, etc.
›
structuralism: Community seemed to be an
instrument of national governments rather than a usurping power
§
democratic danger: removing decision making to
Community level locks out many of the interest groups that operate effectively
of a national level but are not well-placed to play the Community game
◊
1992 and Beyond
§
structural changes
*
majority voting has become the default procedure
for Community decision-making for most internal market legislation
›
Luxembourg
is seldom invoked, and to the extent it is it seems now to require “the
assertion of a truly vital national interest, accepted as such by the other Member States”
*
negotiating under
the shadow of the vote gives the Commission considerable power to act as an
intermediary between Member
States and force
compromises
Unit
XI: Discriminatory Taxation and Measures Having an Effect Equivalent to Customs Duties
·
Charges Having an Effect Equivalent to a Customs
Duty
◊
relevant treaty provisions
§
Article 23
*
“The Community shall be based upon a customs
union … which shall involve the prohibition between Member States of customs
duties … and of all charges having equivalent effect…”
§
Article 25
*
(pre-Amsterdam) “MS shall refrain from
introducing … any customs duties … or any charge having equivalent effect, and
from increasing those which they already apply…”
*
(post-Amsterdam) “Customs duties … and charges
having equivalent effect shall be prohibited…”
◊
any pecuniary charge, however small and whatever
its designation, imposed by reason of the fact that products cross a frontier constitutes
a charge having effect equivalent (Case
24/68: Commission v. Italy – Statistical Levy, 3 – 1969, at ¶ 9)
§
purpose of Article 25 is to remove obstacles to
trade, not simply to prevent protectionism
§
moreover, even if the purpose were to prevent
protectionism, burdening imports and exports equally does not pass muster;
domestic products marketed internally are still advantaged
§
rejection of the de minimus argument
*
ECJ endorsed Commission’s desire to send a clear
message to MS that obstacles to trade were not going to be allowed
›
NOTE: this argument loses weight once the common
market is firmly established; one might expect to see evolution of a less
restrictive doctrine
*
judicial economy: bright line rule will prevent
confusion and litigation
◊
exceptions
§
“taxation which is imposed in the same way … on similar or comparable domestic
products” (Statistical Levy at ¶ 11);
“form part of a general system of internal dues applied in accordance with same
criteria to domestic goods” (Animal
Inspection Fees – AG’s Opinion, 15 at ¶ 4)
*
if there are no comparable domestic products,
the tax must be part of the general scheme of taxation
›
hypothetical domestic product test
§
tax intended to compensate for internal taxation
*
tax imposed for the benefit of domestic producers
does not apply equally to imported and domestic products because for the
domestic products it is a set-off against benefits received while for imported
products it is a supplementary tax burden (Case
77/72: Capolongo, 7 – 1973)
*
tax on imported lard is not justified by the
fact that the same tax is charged at the same rate for similar animals when
slaughtered domestically (Case 132/78:
Denkavit, 23 – 1979)
›
charge must (¶ 8):
·
(a) be imposed at the same marketing stage; and,
·
(b) “the chargeable event … must also be
identical”
*
tax on exported tobacco to fund the Tobacco
Workers’ Insurance Fund cannot be justified by the fact that a similar charge
is levied on domestic products unless both charges are applied (a) at the same
rate, (b) at the same marketing stage, and (c) on the basis of an identical
chargeable event (Cases 441-42/98:
Kapniki Mikhailidis, 26 – 2000)
›
the social objective of a tax does not matter
when determining whether it is a charge having effect equivalent
§
fee for service rendered
*
(1) for “a specific benefit actually conferred”
(Statistical Levy at ¶ 16);
“constitute the consideration for a benefit actually provided” (Animal Inspection Fees – AG’s Opinion,
15 at ¶ 4)
›
that is, the service cannot confer an advantage
that is too general or difficult to assess
*
(2) “charged in connection with inspections
prescribed by a Community directive” (Animal
Inspection Fees – AG’s Opinion, 15 at ¶ 4)
›
health inspection fees are, in and of
themselves, too general to constitute a benefit actually conferred
›
fee may be charged for inspections established
in accord with a Community directive intended to promote the free movement of
goods by removing obstacles to trade (ie. veterinary and public health
inspections adopted in accordance with Article 30 (ex 36)) (Case 46/76: Bauhuis, 9 – 1977, at ¶ 30)
·
but the fee must be no greater than the actual
costs of inspection (¶ 36)
·
unless the directive specifically provides that
MS must bear the costs of inspection, it does not matter whether the actual fee
charged has been or are capable of being harmonized (see Animal Inspection Fees, 17 at ¶ 13-15)
›
the following conditions must be satisfied (Commission v. Germany – Animal Inspection
Fees, 17 – 1988, at ¶ 8):
·
fees do not exceed the actual costs
·
inspections are obligatory and uniform for all
products concerned in the Community
·
prescribed by Community law in the general
interests of the Community
·
promote the free movement of goods … by
neutralizing obstacles to trade that might arise from unilateral measures
adopted in accordance with Article 30 (ex 36)
·
Discriminatory Taxation
◊
relevant treaty provisions
§
Article 90 (ex 95)
*
similar products: no MS shall impose, directly or indirectly, on the products of other MS any internal taxation in excess of that imposed on similar domestic
products
*
other products: no MS shall impose on the
products of other MS any internal taxation of
such a nature as to afford indirect protection to other products
§
this is really about discrimination (not
◊
differential taxation
§
it proves impossible to develop a “similar
products” test; any measure of similarity depends on the distance from which
the question is viewed (see Commission v.
France – Alcoholic Beverages, 32 – 1980)
§
the ECJ claims that this doesn’t matter because
taxation on products that might be similar will certainly be caught by the
“other products” clause because the products will be at least in partial
competition (¶ 38)
*
Note: this ignores the fact that the “other
products” test is much more difficult
§
the question now becomes competition and
substitutability
*
products are in competition with each other when
they are substitutable
*
however, if consumers are unaware that they are
substitutable, they will not be in competition
*
the cross-price elasticity test cannot
affectively measure the degree of substitutability between products that are
taxed at different rates because the tax may itself contribute to perceptions
of substitutability (and thus produce a low cross-price elasticity result) (see
Commission v. UK – Wine and Beer, 52
– 1983)
›
in short, cross-price elasticity measures
consumer preference, and preference may be affected by the fact that one
product is more expensive due to higher tax rate
*
thus substitutability remains a subjective test
›
however, a strong case for substitutability can
be made whenever products are used in similar manners in different countries
◊
taxation of such a nature as to afford indirect
protection
§
the “other products” clause suggests that small
differences are not prohibited
§
Weiler: real test ought to be whether the difference
in tax rate distorts the competitive relationship between products
*
competitive relationship is expressed by price
ratio
*
thus an ad
valorem tax will never distort the competitive relationship
*
one must argue around the language of Article 95
(which is horribly drafted) by saying any distortion of competition which is
not de minimus
›
this last qualification will, in practice, be
taken care of by the fact that someone thought the difference was big enough to
justify the costs of litigation
§
the difficulty is that not all taxes are ad valorem
*
if, for example, taxes are based on alcohol
content and prices vary quite extremely between products with the same alcohol
content it will be very difficult to determine whether taxation affects price
ratio
*
whilse
◊
the pursuit legitimate economic or social goals
§
Community law does not prohibit Member States
from granting tax advantages in pursuit of legitimate economic or social
purposes (Case 148/77: Hansen & Balle,
31 – 1978)
§
MS may establish differential taxation between
similar products on the basis of objective criteria if the differentiation
pursues of objectives of economic policy that are compatible with Community law
(Commission v. France – Natural Sweet
Wines, 49 – 1987, at ¶ 6)
*
MS may pursue legitimate economic or social aims
through differential taxation as long as such preferential systems extend to
imported products conforming to the same standards as preferred domestic
products (eg. non-discriminatory) (¶ 7)
§
end products which are identical but have different
manufacturing processes may be taxed at different rates despite the fact that
one is not produced domestically if the reason it is not produced domestically
is the higher tax rate (Case 46/80: Vinal,
41 – 1981)
*
giving preference to a particular manufacturing
process or raw material is a legitimate choice of economic policy
§
if a MS has a differential taxation rate based
upon method of production, it cannot impose the higher rate on all imported
products based upon the fact that it is impossible to distinguish between the
products at the time of import (Case21/79:
Commission v. Italy – Mineral Oil
Products, 45 – 1980)
*
it is up to importers who wish to take advantage
of the lower tax rate to produce evidence that their product was manufactured
in accordance with the preferred method
*
the MS may not require a higher standard of
proof than is necessary to avoid the risk of tax evasion
§
while a MS may require evidence enabling it to
determine whether an imported product meets the standards required for a
preferential rate of taxation (eg. certificates issued by the appropriate
authorities in the state of origin), it must allow the exporting MS to choose
control methods and designate the responsible authority for controls (Natural Sweet Wines)
*
recognition of equivalence may not be made
dependent upon prior negotiation of an agreement between the national
authorities concerned
§
tension between social purposes and
non-discrimination
*
Finland
taxed energy at differential rates based on source (eg. nuclear energy taxed much
higher than wind energy); however, because it was impossible to determine the
source of imported energy, the Finnish government taxed all imported energy at
the average rate of tax of domestic energy (ie. greater than the lowest rate,
less than the highest rate) (Case 213/96:
Outokumpu Oy, 74 – 1998)
*
held: MS must abolish differential taxation
which is objectively justified if doing so is the only means of avoiding direct
or indirect discrimination against the imported products (¶ 40)
*
notice that this holding is in tension with
other parts of the decision which maintain that MS have a right to pursue
“objectives which are themselves compatible with the requirements of the Treaty
and its secondary legislation” through differential taxation based on objective
criteria (¶ 30)
*
thus, non-discrimination seems to trump social
objectives
›
practical difficulties cannot justify
discrimination
◊
general system of internal dues
§
system must be applied systematically to
categories of products in accordance with objective criteria
§
the method of taxation applied to imported
products not produced domestically (eg. tax on supply) may not differ from the
method of taxation applied to domestic products (eg. tax on use of products)
within the same category (eg. products which make use of the Hertzian radio
spectrum) (Case 109/88: CRT France
International, 80 – 1999)
Unit
IX: Non-Tariff Barriers
·
Relevant Treaty Provisions
◊
Article 28
§
quantitative restrictions on imports and all
measures having an equivalent effect shall be prohibited between Member States
◊
Article 29 (ex 34)
§
quantitative restrictions on exports and all
measures having an equivalent effect shall be prohibited between Member States
◊
Article 30 (ex 36)
§
Articles 28 and 29 shall not preclude
prohibitions on restrictions on imports, exports or goods in transit on grounds
of:
*
public morality, public policy or public
security
*
protection of the health of humans, animals or
plants
*
protection of national treasures
*
protection of industrial and commercial property
§
provided that such restrictions do not
constitute a means of arbitrary discrimination or a disguised restriction on
trade
·
Restrictions on Imports
◊
all trading rules enacted by MS which are
capable of hindering, directly or indirectly, actually or potentially,
intra-Community trade are to be considered as measures having an effect
equivalent to quantitative restrictions (Case
8/74: Dassonville, 5 – 1974)
§
the rule in question need not exclude an import,
not even burden imports more than domestic products
◊
unilateral measures
§
rule of reason / doctrine of mandatory
requirements (Case 120/78: Cassis de
Dijon, 7 – 1979)
*
MS may unilaterally regulate the production and
marketing:
›
(1) in the absence of harmonization measures;
and,
›
(2) to the extent “necessary in order to satisfy
mandatory requirements”
·
(a) mandatory requirements = compelling interest
◊
effectiveness of fiscal supervision
◊
protection of public health
◊
fairness of commercial transactions
◊
defense of the consumer
·
(b) necessary = narrowly tailored / least
restrictive measure (proportionality)
*
the rule of reason operates as a part of the
doctrine of justification, but it ought to be seen as an interpretation of
‘justified’ rather than as an expansion (by judicial fiat) of the list of
acceptable justifications in Article 30
§
functional parallelism (Cassis de Dijon, at ¶ 14)
*
a product lawfully produced and marketed in
another MS, which satisfies the lawful regulatory regime of another MS, must be
allowed to be marketed if the regulatory regime of the other MS is functionally equivalent to that of the
MS into which product is being imported
›
NOTE 1: a regulation must be judged in relation
to its ultimate purpose (eg. safety, etc.); can’t simply say that a regulation
doesn’t insulate as well, have to say that the level of insulation required is
necessary to protect consumer
›
NOTE 2: this (n.1) only works where an objective
standard is possible; this would not be the case, for example, in regards to
emissions
*
ECJ misspoke when it claimed that any product
“lawfully produced and marketed in one Member State”
ought to be allowed into any other Member
State
*
“It is … contrary to the principle of
proportionality for national rules to require … imported products to comply
strictly and exactly with the provisions or technical requirements laid down for
products manufactured [domestically] when those imported products afford users the same level of protection.” (Case188/84: Woodworking, 13 – 1986)
◊
the law of justification
§
NOTE: treat the rule of reason and Article 30
basically in the same way – that is, read Article 30 to include the “least
restrictive measure” requirement (but don’t say “necessary”)
§
non-arbitrary discrimination (rabies in the UK)
*
UK
and Ireland
require all animals entering their territory to remain in quarantine for long
enough to prove that they do not have rabies
*
while this only applies to imported products
(ie. discriminates), and thus insulates the pet market in both countries from
competition, it is not arbitrary because there is no rabies in either UK or
Ireland and there is a strong public interest in keeping it that way
§
disguised restrictions on trade
*
laws which burden (hinder) trade, but do so
equally for domestic and imported products, are subject to rationality review
(basically as described in the rule of reason)
*
laws which are neutral on their face, but have disparate impact (ie. are more
burdensome to imports than to domestic products) are immediately more suspect
›
disparate impact is not illegal per se
›
however, it acts as a trigger for heightened
judicial scrutiny of the regulation
*
although in theory all policy headings deserve
the same consideration, in the practice the ECJ has created a continuum
›
the ECJ gives the MS wide latitude in crafting
regulations justified by public morality (despite having disparate impact) –
low scrutiny
·
“if a prohibition on the importation of goods is
justifiable on grounds of public morality and if it is imposed with that
purpose the enforcement of that prohibition cannot, in the absence within the
Member States concerned of a lawful trade in the same goods, constitute a means
of arbitrary discrimination or a disguised restriction on trade” (Case 34/79: Henn and Darby, 18 – 1979)
›
health = medium scrutiny
›
fairness of commercial transaction = strict
scrutiny
·
in most cases the ECJ will find that a labeling
requirement would be ‘equally’ effective (see, eg., Cassis de Dijon)
·
rules denying consumers access to certain
information (eg. prohibiting advertising from stating the length of a sale or
referring to previous prices) cannot be justified by the MS’s compelling
interest in consumer protection (Case
362/88: Inno, 47 – 1990)
*
in each case, the ECJ is in effect asking itself
whether it agrees with the MS assessment of acceptable risk
›
while the ECJ does not accept MS determination
that no risk is acceptable in the case of fairness to the consumer, it is
willing to give MS more latitude to determine acceptable health risks, and is
almost completely unwilling to dictate appropriate acceptable risk assessments
in cases of public morality
*
functional parallelism
›
in cases where regulations are not functionally
parallel (eg. red v. blue grounding wire example), it is impossible to argue
that a regulation
›
moreover, it is the π burden to prove that a regulation in the
MS of origin is functionally parallel to the regulation in the importing MS
(and thus the importing MS’s regulation is unnecessary)
◊
method of sale
§
in the first Sunday trading case, defended by
the UK as a necessary measure to maintain Sunday as the traditional day of
rest, the ECJ found that a regulation prohibiting retail shops from opening on
Sunday was caught by Dassonville
(hinder trade by reducing the total amount of products sold – ie. reduced
consumption), but held that the regulation was nonetheless justified under
Article 30 (Case 145/88: Torfaen Borough,
31 – 1989)
*
because the regulation was not justified by any
of the policy headings mentioned in Article 30, the ECJ had to create a new
exception: way-of-life justification (regulations which seek to ensure that
market conditions are in accordance with national or regional socio-cultural
characteristics)
*
however, the AG argued that justification should
not be required in such cases; that is, the ECJ should have held that rules
regulating method of sale should not be caught by Dassonville
§
“the application to products from other Member
States of national provisions restricting or prohibiting certain selling arrangements is not such as to
hinder … trade between Member States within the meaning of the Dassonville judgment, so long as” those
provisions are non-discriminatory (apply to all relevant traders and affect
domestic and imported products in the same manner) (Cases 267-68/91: Keck, 51 – 1993, at ¶ 16)
*
rule may not be by nature such as (¶ 17):
›
to prevent [imported products’] access to the
market; or,
›
impede access [of imported products] any more
than it impedes the access of domestic products
*
theoretical justification (Weiler’s constitutional
argument)
›
Article 28 is a vehicle for harmonization: the
purpose of harmonization is to remove justified obstacles to trade
›
way-of-life regulations should not be subject to
harmonization
›
thus, MS ought not be required to justify such
measures; in other words, such a rule should not be held to be a measure having
an effect equivalent to a quantitative restriction
›
this preserves the proper scope of MS regulatory
power
*
drawing the line between regulatory autonomy and
trade law
›
it is to the benefit of both producers and
consumers that products produced and marketed in one country be allowed into
the market of another (and vice versa)
·
almost as a duty of comity, a complete exclusion
ought to be explained and justified; too drastic from a comity / relational /
public policy view
·
moreover, with exclusionary rules we want to
give the Community the possibility of harmonization legislation b/c we want to
allow the MS to adopt rules which make the
·
in these circumstances MS is forcing others to
internalize the costs of its regulation, by increasing production costs
(forcing producers to alter products to gain access to their markets)
›
on the other hand, as long as a MS allows a
product into its marketplace, other MS have no call to determine how that marketplace
is regulated (provided that there is no discrimination)
·
each country should be allowed to run its civil
law, its criminal law, and its market regulation; and, most importantly, no
country ought to be forced to justify its rules in these realms
·
such rules do not place additional requirements
on the manufacturer / don’t make Euro production less efficient
›
thus, way-of-life
rules which hinder but do not exclude should not be held to be measures having
effect equivalent
§
measures caught by Keck (rather than Dassonville)
*
rule prohibiting resale at a loss (Keck)
*
rule of professional conduct prohibiting
pharmacists from advertising quasi-pharmaceutical products outside of the
pharmacy (Case 292/92: Hunermund, 54
– 1993)
*
rule limiting the products that can be sold at
gas stations outside of lawful opening hours and limiting the manner of sale
(eg. tobacco products can only be sold by vending machines) (Case 401 & 402/92: Tankstation’t Heukske,
63 – 1994)
*
rule prohibiting the distribution sector from
advertising on television (Case 412/93:
Leclerc, 69 – 1995)
›
as AG Jacobs points out, rules relating to
advertising are more difficult than might first be imagined (see AG’s Opinion,
64)
›
prohibiting advertising (or even certain forms
of advertising) may effectively deny full market access to new products
›
but note that the new products affected may be
domestic as well as imported, and, moreover, the established products (which
benefit from keeping the new products out) may be imported
›
in short, this isn’t a simple case of
discrimination
*
rule limiting the sale of infant formula
(processed milk) to pharmacists’ shops (Case
391/92: Commission v. Greece – Infant Milk, 74 – 1995)
›
Greece
produces no infant formula (and, thus, the rule applies only to imported
products)
›
ECJ stated that “only if it was apparent that
the legislation … protected domestic products which were similar to [the
regulated product] … or which were in competition with [it]” would the fact
that a MS did not produce the regulated product bring the regulation within Dassonville
*
rule requiring shops to close on Sundays and
public holidays, but not prohibiting Sunday working (Cases 69 and 258/93: Punto Casa, 77 – 1994)
*
statute requiring energy providers to purchase
electricity produced within their area of supply from renewable resources (at
above-market prices) (Case 379/98:
PreussenElektra, 116 – 2001)
›
promoting the use of renewable energy resources
is a purpose compatible with the Treaties
›
given that it is still not possible to determine
the source of energy once it has entered the transmission or distribution
system, MS’s are unable to confer a similar benefit on imported electricity
›
thus, the legislation in question is not a
measure having effect equivalent to a quantitative restriction on imports
§
measures which are still caught by Dassonville
*
rule prohibiting the sale of ice-cream bars with
the promotional marking ‘+10% ice-cream’ on their wrappers (Case 470/93: Mars, 90 – 1995)
›
rule “may compel the importer to adjust the
presentation of his products according to the place where they are to be
marketed and consequently to incur additional packaging and advertising costs”
(¶ 13)
*
rule prohibiting the sale of publications
offering readers the chance to take part in games for prizes (Case 368/95: Familiapress, 91 – 1997)
›
the legislation in question “bears on the actual
content of the products” and, thus, constitutes a measure having effect
equivalent to a quantitative restriction on imports (¶ 11)
›
moreover, the MS could have adopted a less
restrictive measure, eg. requiring pages containing prize competitions to be
blacked out or removed or requiring a disclaimer that readers in the MS do not
qualify for a chance to win the prize
*
requirement that beneficiaries of a social
insurance fund obtain the prior authorization of the fund in order to be
reimbursed (at a flat rate) for medical products (eg. prescription glasses)
purchased in another MS is a barrier to the free movement of goods since it
encourages insured persons to purchase products in the State in question, nor
can such rules be justified by the need to control health expenditures (Case 120/95: Decker, 121 – 1998)
§
non-discrimination (the post-Keck battlefield)
*
rule requiring shops to close on Sundays and
public holidays is non-discriminatory even though it has a disparate impact on
imported goods because, with the rule in place, consumers will purchase more
necessary goods from small shops located in the city center (which, in the case
of Rome, tend to stock primarily domestic products) than from large retailers
on the periphery (which sell more imported products) (Cases 418 etc. /93 & 9 etc. /94: Semeraro, 80 – 1996)
›
any additional burden on imported products is
entirely contingent
·
one might expect that over time shops in the
city center will begin to stock more imported moreover
·
moreover, even if they do not, the reason may be
that domestic products are of higher quality (think Italian shoes, clothes,
etc.)
*
a Community Directive requires that all
broadcasts emanating from the Community and intended for reception within the
Community (particularly within another MS) must comply with the regulations of
the state of origin, and, moreover, lays down a number of principles regarding
the protection of minors, a MS may not require that broadcasts emanating from
another MS (Case 34-36/95: De Agostini,
111 – 1997)
›
receiving State may not apply legislation
specifically designed to control the content of television advertising with
regard to minor to broadcasts emanating from another MS (¶ 60)
›
however, “an outright ban on advertising aimed
at children … is not covered by Article 28 …, unless it is shown that the ban
does not affect in the same way, in fact and in law, the marketing of national
products and of products from other Member States.” (¶ 44)
*
“in the case of products like alcoholic
beverages, the consumption of which is
linked to traditional social practices and to local habits and customs, a
prohibition on all advertisements in the press, on the radio and on television,
the direct mailing of unsolicited materials or the placing of posters on the
public highway is liable to impede access
to the market by products from other Member States more than it impedes
domestic products, with which consumers are instantly more familiar” (Case 405/98: Gourmet International, 127
– 2001)
›
however, [in the case of alcoholic beverages]
such measures may be justified by the protection of public health (¶ 26)
›
there is, moreover, no evidence that the rule in
question discriminates against imported products
›
it is for the national court to determine
whether the objective might be achieved by use of less restrictive measures
§
failure to take all necessary and proportionate
measures in order to prevent the free movement of goods from being obstructed
through criminal activity
*
MS must adopt and enforce measures necessary to
remove obstacles to the free movement of goods not caused by the State (Case 265/95: Commission v. France – Fresh
Strawberries, 96 – 1997)
›
given that incidents of vandalism had been
ongoing for over ten years, that they took place primarily in certain places
and during certain times of year, that the group responsible is known to the
police and yet only a small number have been arrested and prosecuted, France is
in breach of its obligations under Article 28
›
“unless it can show that action on its part
would have consequences for public order with which it could not cope by using
the means at its disposal,” the MS must “adopt all appropriate measures to
guarantee the full scope and effect of Community law so as to ensure its proper
implementation” (¶ 56)
*
the principle of the free movement of goods does
not require a MS to ensure free access to major truck routes when they are
countervailing fundamental rights interests at stake and when the disruption is
temporary and transporters have been altered and informed of alternate routes (Case112/00: Schmidberger, 104 – 2003)
›
permitting upon request a demonstration by
environmental groups exercising fundamental rights of freedom of expression and
assembly to shut down a major motorway for 30 hours on a single occasion when
sufficient notice had been given
›
this “isolated incident … did not give rise to a
general climate of insecurity such as to have a dissuasive effect on
intra-Community trade flows as a whole” (¶ 88)
·
Restrictions on Exports
◊
rule prohibiting sausage manufactures from
having in stock or processing horsemeat does not have effect equivalent to a quantitative
restriction on exports (Case 15/79:
Horsemeat, 133 – 1979)
§
“national measures which have as their specific object or effect the
restriction of patterns of exports and thereby the establishment of a
difference in treatment between the domestic trade of a Member State and its
export trade in such a way as to provide a particular advantage for national
production or for the domestic market” are prohibited (¶ 7)
§
“This is not so in the case of a prohibition …
which is applied objectively to the production of goods of a certain kind
without drawing a distinction depending on whether such goods are intended for
the national market or for export.” (¶ 7)
◊
rule prohibiting work in bakeries between 10 pm and 4 am, and prohibiting the transportation of
bakers’ wares for delivery to consumers or retail outlets between 10 pm and 5:45 am does not have effect equivalent to a
quantitative restriction on exports (Case
155/80: Oebel, 135 – 1981)
§
case would be different if the rule prohibited
transportation to warehouses or intermediaries (¶ 20)
◊
refusal to issue export licenses to another MS
cannot be justified on the grounds that the other MS is not properly
implementing a Community Directive on the slaughtering of animals (Case 5/94: Hedley Lomas, 138 – 1996)
§
“recourse to Article [30] is no longer possible
where Community directives provide for harmonization” (¶ 18)
§
MS cannot unilaterally adopt measures designed
to obviate a breach of Community law by another MS (¶ 20); they must rely on
mutual trust to carry out checks on their respective territories (¶ 19)
◊
the fact that a harmonization measure allows
derogations for the adoption of stricter protection of animals within the
territory of a MS than those laid down in the directive does not mean that the
MS may refuse to export animals to MS who have only adopted the minimum
requirements of the harmonization measure (Case
1/96: ex parte Compassion in World Farming, 141 – 1998)
◊
rule requiring transporters of animals to bring
them to the nearest suitable abattoir for slaughter upon embarking on
transportation or entering the MS is a measure having effect equivalent to a
quantitative restriction on both imports and exports (Case 350/97: Wilfried Monsees, 145 – 1999)
§
because the measure effectively makes
international transit by road of animals bound for slaughter impossible within Austria, and,
moreover, since less restrictive measures could achieved the MS’s interest in
protecting the health of animals, the rule cannot be justified under Article 36
◊
rule prohibiting the use of a designation of
origin for wines transported in bulk and bottled outside of the region of
origin is a measure having effect equivalent to a quantitative restriction on
exports (Case 388/95: Belgium v. Spain,
148 – 2000)
§
however, the rule is justified by Spain’s
interest in preserving the high reputation of quality wines bearing the
particular designation of origin
§
the requirement that bottling take place within
the particular region aims to strengthen control over the particular
characteristics and quality of the product since bottlers in the region have
specialized experience and thorough knowledge of the specific characteristics
of the wine in question
Unit
XII: Intellectual Property
·
Articles on Competition
◊
Article 81 (ex 85)
§
prohibits as incompatible with the common market
*
all agreements between undertakings;
*
decisions by associations of undertakings; or,
*
concerted practices,
§
which have as their object or effect the prevention, restriction or distortion of
competition; in particular:
*
fix selling prices or other trading conditions
*
limit or control production, markets, technical
developments, or investment
*
share markets or sources of supply
*
apply dissimilar conditions to equivalent
transactions with other trading parties (putting those parties at a competitive
disadvantage)
*
make conclusion of contracts subject to
supplemental agreements that have no connection with the subject of the
contracts
§
these provisions may be declared inapplicable in
the case of
*
concerted practice which contributes to …
promoting technical or economic progress, while allowing consumers a fair share
of the resulting benefit, and which does not:
›
impose … restrictions which are not
indispensable to the attainment of these objectives
›
afford … the possibility of eliminating
competition
◊
Article 82 (ex 86)
§
abuse of dominant market position is prohibited
insofar as it may affect trade between Member States
§
abuse may include in particular:
*
imposing unfair purchase or selling prices or
other unfair trading conditions
*
limiting production, markets, technical
developments to the prejudice of the consumer
*
applying dissimilar conditions to equivalent
transactions with other trading parties (putting those parties at a competitive
disadvantage)
*
making conclusion of contracts subject to
supplemental agreements that have no connection with the subject of the
contracts
·
Patents
◊
purpose: to reward the creativity of the
inventor, thereby stimulating scientific progress
◊
existence v. exercise (Case 24/67: Parke, 20 – 1968, at ¶ 11)
§
the existence
of patent rights is a matter of national law, which is protected by Article
30 (exceptions to measures having effect equivalent to a quantitative restriction
on imports) and Article 295 (treaty doesn’t prejudice MS rules governing
property)
§
however, the exercise
of patent rights is limited by Articles 28, 81, and 82
*
charging higher price for product than is
charged for similar product in MS that does not offer patent protection for
such products is not necessarily an abuse of a dominant position
◊
justification under Article 30 (Case 15/74: Centrafarm v. Sterling, 24 –
1974)
§
specific
subject matter of a patent is the guarantee that the patentee (to reward
creativity) has the exclusive right to
use an invention with a view to:
*
manufacturing industrial products
*
putting them into circulation for the first time
›
directly; or,
›
by grant of license to third party
*
opposing infringements
§
exhaustion
of rights: once the patentee has introduced the product (herself or with
her consent) into the market of one MS, the patentee may not oppose the
importation of the product into another MS where she holds a patent
*
this holds even where the exporting MS does not
provide patent protection for the product in question (Case 187/80: Merck I, 31 – 1981)
*
the right of first placing a product on the market
enables the patentee to obtain a reward, without guaranteeing that reward (¶
10)
*
it is up to the patentee to decide, in light of
all the circumstances, under what conditions she will place the product on the
market; once placed, however, she loses the right to object to trade between MS
in which she has placed the product
*
an exception arises where the patentee proves
that there is a genuine, existing, legal obligation to continue marketing the
product in a MS that does not afford patent protection to the product in
question (Cases 267-268/95: Merck II, 34 – 1996)
›
in such cases, the patentee cannot be deemed to
have consented to the marketing of the product
*
exception 2: patentee may object to importation
of a product from a MS in which the product is manufactured by a third party
under a compulsory license (ie. without the consent of the patentee) (Case 19/84: Pharmon, 41 – 1985)
◊
limitations to MS right to afford patent
protection
§
granting patent to a “re-invented” product (ie.
making available of a product that had been previously patented but had never
been placed on the market) does not constitute a means of arbitrary
discrimination nor does it give rise to a disguised restriction on trade (Case35/87: Thetford, 49 – 1988)
§
MS may not use compulsory licensing to promote
the domestic production of a product which is made available to the market by
the patentee through importation from another MS (Case30/90: Commission v. UK – Compulsory Licenses, 53 – 1992)
·
Trademarks
◊
purpose: to reward the manufacturer who
consistently produces high-quality goods, thereby stimulating economic progress
◊
distinguishing function: act as a guarantee
[economic, not legal] to the consumer that all goods bearing a particular mark
have been produced by, or under the control of, the manufacturer and, thus, are
likely to be of similar quality
§
the purpose of trademarks is consumer protection
(Hoffman-La Roche)
§
prior to Hoffman-La
Roche, the distinguishing function of a trademark was described as the
owner’s interest in maintaining the goodwill of consumers
◊
justification of trademark protections under
Article 30 (Case 16/74: Centrafarm v.
Winthrop, 87 – 1974)
§
specific
subject matter: “the guarantee that the owner of the trade mark has the
exclusive right to use that trade mark, for the purpose of putting products
protected by the trade mark into circulation for the first time” (¶ 8)
*
this is “intended to protect him against
competitors wishing to take advantage of the status and reputation of the trade
mark” (¶ 8)
§
exhaustion
of rights: “an obstacle [to the free movement of goods] is not justified
when the product has been put onto the market in a legal manner in the Member
State from which it has been imported, by the trade mark owner himself or with
his consent” (¶ 10)
*
consent only applies where the trademark
proprietor is either the same in the importing and exporting state or the
proprietors are economically linked (part of the same undertaking, licensee,
parent company, subsidiary of the same group, or exclusive distributor) (Case 9/93: IHT v. Ideal-Standard, 79 –
1994)
*
national rules may not provide for the
exhaustion of rights in respect of products placed on the market in non-member
states with the consent of the trademark proprietor (Case 355/96: Silhouette, 111 – 1998)
◊
disguised restriction to trade – repackaging
§
essential function of a trademark: “to guarantee
the identity of the origin of the trade-marked product to the consumer or
ultimate user, by enabling him without any possibility of confusion to
distinguish that product from products which have another origin” (Case102/77: Hoffman-La Roche, 92 – 1978)
*
thus “the consumer of ultimate user can be
certain that a trade-marked product … has not been subject at a previous stage of marketing to
interference by a third person, without the authorization of the proprietor,
such as to affect the original condition of the product” (¶ 7)
§
conditions which must be met in order for
enforcement of trademark rights against repackaged products to qualify as a
disguised restriction on trade (Hoffman-La
Roche, at ¶ 14):
*
enforcement of the trademark by the proprietor,
having regard to the marketing system she has adopted, will contribute the artificial partitioning of the common market
*
repackaging cannot
adversely affect the original condition of the product; eg.,
›
trademarked product is marketed in double
packaging and the repackaging affects only the exterior packaging (Hoffman-La Roche, at ¶ 10; Case 1/81: Pfizer, 97 – 1981, at ¶¶
10-11)
*
the proprietor of the trademark receives prior notice of the marketing of
repackaged products (Hoffman-La Roche,
at ¶ 12)
*
new packaging states by whom the product has
been repackaged (Hoffman-La Roche, at
¶ 12)
§
re-labeling
*
removal of an identification numbers applied for
purposes which are legitimate under Community law (eg. identifying the lot to
which a foodstuff belongs), but is also used by the proprietor of the trademark
to combat parallel trade, the parallel trader should seek protection under the
competition articles (Case349/95:
Ballantine & Sons, 102 – 1997, ¶ 41-43)
*
if re-labeling is necessary to comply with the
labeling requirements in the Member
State of destination (Ballantine & Sons, at ¶ 45-46)
›
the original label may be removed and a new
label applied if the original label would prevent the product from being
marketed in the destination
State
›
if additional information is required, this may
be accomplished by applying a sticker with the additional information while
leaving the original label is place
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