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2) The CJEU: under the system of dual vigilance, an individual may bring a
direct action before the CJEU itself (Part 2)
To trigger Art 258, the Commission has to consider that a Member State has
failed to fulfil an obligation under the Treaties
Force majeure defences are generally unavailable for a MS to use against the
enforcement proceedings.
Commission v Belgium [1970] --- (Belgian Woodpulp case) Belgium passed a
law contrary to EU law. Defended themselves on the grounds that parliament
had been dissolved at that point and so it was not possible to put it right. ECJ
Held: Obligations arise whatever the agency of the state whose action or
inaction is the cause of the failure to fulfil its obligation even in the case of a
constitutionally independent institution. Commentary: in other words, a MS
cannot plead circumstances or practices existing it its internal legal system to
justify a failure to comply with its obligation. Pleas of force majeure are
rejected, save in the case where a bomb attack presented insurmountable
difficulties for compliance with the Treaty (Commission v Italy [1970])
Commission v Belgium [1987] --- Powers dealing with pollution laws had been
devolved to regional bodies, and therefore the central government could not
do anything about it. ECJ Held: such arrangements could not be used to
avoid implementation. Commentary: Court always looks at the state in
totality, and does not seem to accept procedural defences
The ECJ also generally rejects arguments by MS that they were not deliberately
delaying or opposing EU law, or that the mistake was minor, or that other MSs
are also in breach, or that the EU measure is illegal
The Procedure
Art 258 TFEU:
If the Commission considers that a Member State has failed to fulfil an
obligation under the Treaties, it shall deliver a reasoned opinion on the matter
after giving the State concerned the opportunity to submit its observations.
If the State concerned does not comply with the opinion within the period laid
down by the Commission, the latter may bring the matter before the Court of
Justice of the European Union
The breach of EU law in Art 258 includes omissions and actions by MSs, failure
to implement directives, breaches of Treaty provisions or legislations or rules
The Consequences
Before the Maastricht Treaty introduced Art 260, the weakness of the Art 258
procedure was that the only ruling the ECJ could make against a defaulting MS at
the referral stage was the finding of violation the ECJ could NOT order the MS
to adopt any specific measures nor dictate the consequences of its judgment.
This is the first declaratory ruling. So if the MS does not rectify the breach, the
Commission can sue the MS again for failing to fulfil an obligation under the
Treaty (i.e. failing to comply with the ECJ ruling), thus leading to the second
declaratory ruling. But there are no adverse consequences which the MS will
face. This brings about circular actions which are expensive and meaningless.
After the Maastricht Treaty introduced Art 260, there was a penalty payment to
be imposed against the MS which failed to comply with a previous judgment of
the Court. This replaced the procedure for a second declaratory ruling and gave
teeth to the Art 258 procedure. It also provided incentives for MSs to comply with
ECJ rulings.
Article 260 TFEU:
1. If the Court of Justice of the European Union finds that a Member State has
failed to fulfil an obligation under the Treaties, the State shall be required to take
the necessary measures to comply with the judgment of the Court.
2. If the Commission considers that the Member State concerned has not taken
the necessary measures to comply with the judgment of the Court, it may bring
the case before the Court after giving that State the opportunity to submit its
observations. It shall specify the amount of the lump sum or penalty payment to
be paid by the Member State concerned which it considers appropriate in the
circumstances. If the Court finds that the Member State concerned has not
complied with its judgment it may impose a lump sum or penalty payment on it.
Penalty payment
Commission v Greece [2000] --- In 1992, Greece was taken to court for failure
to implement a directive on the disposal of dangerous and toxic substances,
and found guilty. By 1995, it had not done anything about it. Commission
started a 260(2) procedure for the first time, and the court was forced to
create a fining system. The ECJ made its first ruling on the pecuniary penalty.
Held: the ECJ agreed with, but is NOT bound by the advice of the
Commission. The Commission suggested that that penalties should always be
a deterrent and never purely symbolic. The Commission guideline stated that
the daily penalty involves a uniform flat-rate per day of delay, multiplied (as
coefficients) by these factors:
1) The seriousness of the original infringement (in terms of effects and
symbolism)
2) Its duration
3) The need to ensure that the penalty itself is a deterrent to further
infringements.
4) The ability of the MS to pay and the number of votes the MS has in the
Council
Lump-sum payment
Commission v France [2005] --- France was subject to a lump sum penalty
payment for a longstanding violation. ECJ Held: the procedure has the
objective of inducing a default MS to comply with the judgment both the
lump sum and the penalty payment are intended to achieve this very
objective. While the imposition of penalty payment seems particularly suited to
induce the MS to end the breach, the imposition of the lump sum is based
more on assessment of the effects on public and private interests of the
failure of the MS to comply with its obligation. The absence of any Community
guidelines for the imposition of the lump sum penalty does NOT lead to legal
uncertainty here. No political legitimacy is required for the ECJ to impose a
financial penalty which is not suggested by the Commission. The lump sum
penalty is minimal! Commentary: the Art 260 mechanism clearly represents
the sharp end of the enforcement procedure which has a distinctly less
diplomatic favour. Yet, it is also evident that the burden remains on the
Commission to marshal the appropriate evidence against the MS before the
ECJ.
Interim measures
Under Art 279 TFEU, the CJEU has power to prescribe interim measures as it
sees necessary.
Under Art 278, actions before the CJEU shall NOT have suspensory effect.
The ECJ may, however, order that the application of the contested act be
suspended. (See Factortame v UK)
2) Judicial proceedings against a MS by a MS
A MS may also initiate an action against another MS which it considers to be in
breach of the Treaty
Art 259 TFEU:
A Member State which considers that another Member State has failed to fulfil an
obligation under the Treaties may bring the matter before the Court of Justice of the
European Union.
Before a member state brings an action against another member state for an alleged
infringement of an obligation under the Treaties, it shall bring the matter before the
Commission.
The Commission shall deliver a reasoned opinion after each of the States concerned
has been given the opportunity to submit its own case and its observations on the
other party's case both orally and in writing.
If the Commission has not delivered an opinion within three months of the date on
which the matter was brought before it, the absence of such opinion shall not
prevent the matter from being brought before the Court.
The procedure
The MS suing does NOT have to first contact the MS being sued, but it has to be
brought before the Commission!
Both states MUST be heard and given the opportunity to make oral and written
submissions before the reasoned opinion is given by the Commission
Art 259 has been rarely used because of the ill-will it could occasion between
MSs
The consequences
There is no penalty or lump sum payable
Therefore, the judgment is mere declaratory and opens up to indefinite circular
action
Parti Ecologiste Les Verts v Parliament [1986] --- Held: It must first be
emphasised in this regard that the European Economic Community is a
Community based on the rule of law, inasmuch as neither its member States
nor its institutions can avoid a review of the question whether the measures
adopted by them are in conformity with the basic constitutional charter, the
Treaty.
The Court of Justice of the European Union shall review the legality of legislative acts, of acts of the
Council, of the Commission and of the European Central Bank, other than recommendations and
opinions, and of acts of the European Parliament and of the European Council intended to
produce legal effects vis-a-vis third parties. It shall also review the legality of acts of bodies, offices
or agencies of the Union intended to produce legal effects vis--vis third parties.
It shall for this purpose have jurisdiction in actions brought by a Member State, the European
Parliament, the Council or the Commission on grounds of lack of competence, infringement of an
essential procedural requirement, infringement of the Treaties or of any rule of law relating to its
application, or misuse of powers.
The Court shall have jurisdiction under the same conditions, in actions brought by the Court of
Auditors and by the ECB and by the Committee of the Regions for the purpose of protecting their
prerogatives.
Any natural or legal person may, under the same conditions laid down in the first and second
paragraphs, institute proceedings against an act addressed to that person or which is of direct
and individual concern to them and against a regulatory act which is of direct concern to them
and does not entail implementing measures.
Acts setting up bodies, offices and agencies of the Union may lay down specific conditions and
arrangements concerning actions brought by natural or legal persons against acts of these bodies,
offices and agencies intended to produce legal effects in relation to them.
The proceedings provided for in this Article shall be instituted within two months of the publication
of the measure, or of its notification to the plaintiff, or, in the absence thereof, of the day on which
it came to the knowledge of the latter, as the case may be.
Art 24 TEU; 275 TFEU: Eu has no jurisdiction over CFSP (common foreign
and security policy) acts, except over the compliance with Art 40 TEU and
proceedings brought under Art 263(4). Kadi points out that review of such
measures are not precluded because they were adopted pursuant to the
UNSC Resolutions: the existence of the Resolutions could not preclude
review of the EU regulations giving effect to them within the EU.
Privileged applicants: MSs, the EP (Nice Treaty) the Council and the
Commission. They are always allowed to bring an action against any act even
where the decision is addressed to others
Non-privileged applicants: natural or legal persons can sue under Article 263(4)
provided that meet the rules of standing:
b) An act not addressed to the applicant but of direct concern and individual
concern to the applicant; or
c) A regulatory act which is of direct concern to the applicant and does not entail
implementing measures. (no need to show individual concern here)
Direct Concern
Individual Concern
It is difficult for individuals to contend that the EU courts should look to the
substance of a measure across the categories of legal act. The test for legislative
act is formalistic, not substantive!
The test for individual concern is that C must be in some way differentiated from
all other persons, and by reason of these distinguishing features singled out in
the same way as the initial addressee. When commercial activity is concerned, it
is very difficult for C to distinguish himself from all other persons!
Plaumann v Commission [1963] --- German government requested the
Commission to authorise it to suspend the collection of duties on clementine
imported from other non-member states. The Commission rejected the
request. C was an importer of clementine and sought to challenge the
Commission's rejection of the suspension. ECJ Held: persons other than
those to whom a decision is addressed may only claim individual concern (IC)
if that decision affects them by reason of certain attributes which are peculiar
to them or by reasons of circumstances in which they are differentiated from
all other persons, and by virtue of these factors distinguishes them individually
(must differentiate themselves from everyone else who was affected) just as
in the case of the person addressed. In the present case, the C is affected by
the disputed Decision as an importer of clementines, that is to say, by reason
of a commercial activity which may at any time be practiced by any person
and is not therefore such to distinguish the applicant in relation to the
contested Decision as in the case of the addressee.
Craig: 1) the test is economically unrealistic: the argument that clementine import
can be done by any person is unconvincing. That the number may alter significantly
is a result of supply and demand! 2) Conceptually, it renders it literally impossible for
an applicant to succeed except in a very limited category of retrospective cases.
Currently C's standing is judged at the time the application is lodged, but the court is
now saying that C must fail because some other people might engage in the trade at
some junction in some future, ill-defined date! The consideration of future traders
notionally entering the picture will always render a category open (and not closed),
and this ignores the practical economical considerations that determine the number
of those who supply a product! The fact that I may wish to become striker for
England does not men I currently have the attributes associated with the role.
Union Deutsche Lebensmittelwerke v Commission [1987] --- (butter promotion
case). C argued that it was individually concerned as the number of suppliers
of margarine in West Berlin was known and was unlikely to change. ECJ
Held: C was affected because the Commission decision produced an effect
on the general market. It was of concern to C as much as it was of concerns
of the other margarine suppliers in West Berlin. Hence there is no individual
concern to C.
Codorniu v Council [1994] --- One of the many Spanish sparkling wine
producers, C, challenged a regulation stipulating that the term cremant should
be reserved for sparkling wines of a particular quality coming from France or
Luxembourg. Council sought to rely on the Calpak test to argue that C was
not individually concerned. ECJ Held: although the contested provision is of a
legislative nature in that it applies to the traders concerned in general, that
does not prevent it from being of individual concern to some of them! Yet, C
still had to satisfy the Plaumann conditions. Commentary: Craig: the effect of
this decision is that the court was willing to accept there was individual
concern even though the legal act could be a true regulation as judged by the
abstract terminology test in Calpak. Yet Plaumann still has to be complied
with.
Buralux v Council [1996] --- ECJ Held: the mere fact that it was possible to
determine the number or identity of those affected did NOT mean that the
regulation was of IC to them, so long as the measure was abstractly
formulated. IC was determined by the Plaumann test!
In certain areas like anti-dumping, competition, and state aids though, courts
have been more liberal in according standing, as EU interest in these areas was
clear.
Metro v Commission [1977] --- (competition policy) Metro was a distributer of
electronic goods made by SABA. Metro was concerned that the contract was
illegal under EU competition law, breaching Art 85 of the Treaty. Metro sent a
letter to the commission asking them to investigate. They investigated and
issued a decision to SABA saying there is nothing wrong with the contracts.
Metro thus sought to annul this decision, and this involves Metro proving
whether it was individually concerned. ECJ Held: Metro was distinguisable
and identifiable because they had written a letter, and had become a member
of a closed and identifiable class people who had complained before the
decision was passed.
AE Piraiki-Patraiki v Commission [1985] --- (contracts already concluded)
Greek yarn exporters to France challenged a Commission decision that
allowed France to impose quotas on the amount of yarn being exported. C
brought an action for annulment against the commission on 3 grounds: 1) they
were the main exporter of yarn court 2) it would be impossible for anyone else
to form such an industrial and commercial organisation in the duration for
which the decision will apply 3) a group of them had already entered into
contracts and already had yarn in transit, which succeeded because it was a
fixed/identifiable/closed/distinguishable class ECJ Held:
Extramet v Council [1991] --- (anti-dumping: preventing those from outside the
EU from selling goods within the EU at too low a price to the detriment of
other EU traders). E imported calcium from outside the EC which it then
processed itself. There was only ONE Community producer of calcium, P, who
refused to supply the raw material to E, claiming that a dumping duty was
imposed because E's supplies were dumped in the EC. E sough to annul this
duty. ECJ Held: E satisfied the Plaumann test for individual concern. E was
the largest importer of the product (subject matter) and the end-user of the
product. Its business activities depend to a very large extent on those imports
and are seriously affected by the contested regulation. E therefore had
individual concern.
Commentary: Craig: there were three types of anti-dumping cases where the
ECJ found individual concern: 1) where a principal complainant firm initiated
the complaint about dumping (Timex) 2) where the producer of the product is
subject to the anti-dumping duty and were identified or involved in the
preliminary investigation (Allied Corporation) 3) where the importer of the
product against which anti-dumping duty had been imposed sought to contest
the legality of the anti-dumping regulation (Extramet)
Thomas: Federolio v Commission [1997]: You cannot get around the rules of
standing by suing as a federation of all the industry concerned unless the
association is defending its own interests. Similarly see case C-321/95
Summary of the law on IC: In view of the above case laws it would appear that:
1. It is not sufficient that the applicant is carrying out an economic activity which
may at any time be practised by any person.
4. The class may be closed for legal reasons (eg. the holding of intellectual property
rights in Codorniu) or factual reasons (eg. contracts already concluded as in
Piraiki-Patraiki or goods in transit as in Sofrimport).
5. One of the reasons for the more liberal caselaw re competition law, state aids and
anti-dumping is the existence of extensive provisions in relation to these three
areas for the participation of economic operators in the procedure leading to the
adoption of measures, typically by the Commission. Applicants who did not have
standing for a direct action under Art 263 could contest the legality of the
measure indirectly through Art 267 TFEU
6. But in the case of CAP decisions and Regulations, it is not the case that the
economic operators are required to participate in the procedure leading to the
adoption of the measure.
ECJ Held: did not follow AG Jacobs proposed new test. Plaumann remains to be
the test. It is not acceptable to adopt an interpretation to the effect that a direct action
for annulment will be available if it can be shown that those rules do not allow the
individual to bring JR proceedings. Such an interpretation would require the court to
go beyond its jurisdiction and examine national procedural law!
Commission v Jego Quere [2004] --- ECJ Held: recognised the principle of
effective protection but insisted that the criteria for standing would not be
relaxed even where it is clear that the national rules did not allow C to contest
the validity of he measure without having contravened it. The right to effective
judicial protection could NOT, have the effect of setting aside a condition
expressly laid down by the Treaty!
Craig: the premise underlying both UPA and Jego is that the Treaty provided for a
complete regime of legal protection in terms of access to courts via Art 267 and 263
TFEU. The difficulties of this hypothesis are as follows:
1) The ECJ ignored AG Jacob's concern of the procedural and substantive difficulties
faced by individuals who seek to use Art 267
2) Exhorting national courts to interpret national procedural rules to allow individuals
to challenge EU norms cannot resolve the procedural difficulties adverted to above,
and difficulties flowing from the discretionary nature of Art 267.
3) Challenges via Art 267 increases the ECJ's workload and means that its scarce
resources are diverted to answering the insignificant prelim rulings
4) The ECJ reasoned that modification to the traditional case law on direct challenge
would go beyond the boundaries of legitimate Treaty interpretation. The ECJ said we
cannot set aside the condition of individual concern. But who says we are setting it
aside? It is just the meaning to be given to the phrase that is the question in issue! It
is also no apparent that AG Jacob's formulation would make for any transgression of
the bounds of Treaty interpretation.
5) However impressive the principles of JR are in a legal system, C has no use for
them because of the unduly narrow standing rules.
6) The ECJ in UPA did not mention the consequences of the liberal test under Art
263. It will not significantly increase the workload of the court - some cases would be
joined in a single action etc
7) There are good reasons why the ECJ is wary of going to far but they can influence
the number of actions that are brought through the standards of review that are
applied
The meaning of regulatory act is uncertain, but the better view is that it applies
only to secondary norms and not to primary legislative acts
Inuit v Parliament and Council [2011] --- ECJ Held: the meaning of regulatory
act for the purposes of the fourth paragraph of Article 263 TFEU must be
understood as covering all acts of general application apart from legislative
acts. Consequently, a legislative act may form the subject-matter of an action
for annulment brought by a natural or legal person only if it is of direct and
individual concern to them. Commentary: so it seems that regulatory acts
include delegated (Article 290 TFEU) and implementing acts (Article 291
TFEU) as long as they are acts of general application
Individual concern is not required when there is a regulatory act that is of direct
concern and does not entail implementing measures.
Microban v Commission [2011] --- The measure challenged by the applicants
in Microban case was a Commission decision on non-inclusion of triclosan in
the positive list of authorised substances. The decision was adopted using
Commissions implementing powers. Therefore, according to the classification
of legal acts provided for in the Treaty, it was a decision falling within the
ambit of implementing acts. As, due to its scope, it was also an act of general
application, the Court concluded, referring to the Inuit Tapiriit Kanatami case,
that the contested decision should be considered to be a regulatory act.
Art 265: Should the European Parliament, the European Council, the Council,
the Commission or the European Central Bank, in infringement of the Treaties,
fail to act, the Member States and the other Institutions of the Union may bring an
action before the Court of Justice of the European Union to have the infringement
established. This Article shall apply, under the same conditions, to bodies, offices
and agencies of the Union which fail to act.
The action shall be admissible only if the institution, body, office or agency
concerned has first been called upon to act. If, within two months of being so
called upon, the institution, body, office or agency concerned has not defined its
position, the action may be brought within a further period of two months.
Any natural or legal person may, under the conditions laid down in the preceding
paragraphs, complain to the Court that an institution, body, office or agency of the
Union has failed to address to that person any act other than a recommendation
or an opinion.
Reviewable omissions
It has been accepted in Comitology that Parliament could bring an action for
failure to adopt a measure that was not itself a reviewable act
C has to show that there was an obligation to act
Eridania v Commission [1969] --- C sought the annulment of Commission
decisions granting aid to certain sugar refineries in Italy, claiming that their
competitive position would be deleteriously affected. C also argued that was a
failure to act ECJ Held: C was not individually concerned. Without stipulating
under which provision of Community law the Commission was required to
annul, C was effectively alleging that the decisions were infringing the Treaty.
To allow C to refer the failure to the court as an illegal omission to deal with
the matter would amount to providing C with a method of recourse parallel to
that of Art [263]. Hence, Art [265] was not satisfied.