Judicial action Articles 263, 265, 277, 268 & 340 TFEU

Previously on EU Law I…..

• Enforcement of EU law against MS and individuals:– Public enforcement: Art. 258 TFEU ff, MS fails to

apply EU law (correctly)– Private enforcement of EU law: direct effect (and

state liability!)– Preliminary ruling: Art. 267 TFEU: EU Courts

interpret EU law, national court applies

Today’s topic

• Enforcement of EU law against EU institutions:– Annulment of EU ALL acts: Artt. 263 TFEU– Failure to act: Art. 265 TFEU– Contractual liability and torts: Artt. 268 and 340

TFEU

Art. 263: annulment of EU acts• 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-à-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-à-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 their application, or misuse of powers.

• The Court shall have jurisdiction under the same conditions in actions brought by the Court of Auditors, by the European Central Bank and by the Committee of the Regions for the purpose of protecting their prerogatives.

• Any natural or legal person may, under the 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.

Art. 253 TFEU: Grounds for review

Something must be wrong with the act • Lack of competence: the EU institution has exceeded the power

conferred to it (e.g. wrong legislative procedure) • Manifest error of assessment and/or abuse of power: assessments

must be based on evidence that is accurate, reliable, consistent and sufficiently complete

• Infringement of an essential procedural requirement: e.g. the right to know the reasons for a legal measure, the rights to a hearing where one’s right is restricted, presumption of innocence, act in good fait, due consideration, etc. etc.

• Infringement of the Treaty or of any rule of law relating to their application: fundamental rights, proportionality, legal certainty, non-discrimination, legitimate expectations (Mulder: taking land out of production under a milk reduction scheme, and being unable to resume milk production without being told so in advance)

Art. 253 TFEU: applicants• Privileged applicants: No need to show particular

interest in order to have standing; • Member States, the European Parliament, the Council and the

Commission• Non-privileged applicants: need to show interest in order

to have standing;– ‘any natural or legal person’

• Challenge of an act addressed to the applicant• Challenge of an act of direct and individual concern to applicant• Challenge of regulatory [non-legislative: Art. 289 TFEU] act of direct

concern (not implementing measure)

• No standing? Preliminary ruling procedure (Art. 267)

Direct concern

• Direct concern: “causation” and “legal position”: the measure must affect the applicant’s legal position directly.– Causation: Act must cause a direct change in its

position. MS have no discretion as to the implementation of an EU act

– Legal position: affected interest must be an interest that is legally protected. (Sicily cannot apply to court for subsidy, requested by Italy)

Individual concern• Plaumann test

Plaumann imported mandarins from outside EU and paid 13% customs duties. Germany asked Commission permission to levy 10% but Commission refused (= EU act). Plaumann wanted to challenge the act.

ECJ: “Persons other than those to whom a decision is addressed may only claim to be individually concerned if that decision affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons”

Individual concern• Plaumann test (2)

ECJ: Could anyone become a mandarin importer? Plaumann was part of a group that anybody could (in theory) join and did not have attributes or circumstances that distinguished him from others: an open category.

• Union Deutsche Lebensmittelwerke: “…a closed circle of persons who were known at the time of its adoption and whose rights the Commission intended to regulate.”

• Terres Rouges: new quota of Regulation did not affect traders’ position directly, as before and after new Regulation traders must obtain an import license; decision whether or not to give license directly affects traders’ position.

• Codorniu: because of a new Regulation, Codorniu could no longer use the trademark ‘cremant’, that he has held and registered since 1924. Therefore his situation was different that the situation of all other traders that wanted to use the trademark ‘cremant’.

Individual concern• Plaumann test (3)

Koninklijke Friesland: KF applied for state aid, but Commission investigated the state aid program and NL would therefore not admit KF to the program. 2 years later Commission took decision that state aid was illegal but that companies admitted to the program could continue receiving money. KF challenged the Commission Decision.

ECJ: Could anyone become a company that applied for state aid but was not admitted to the program? KF was part of a group that nobody could (in fact) join anymore and was therefore distinguished from others: an closed category.

Individual concern• Plaumann: Critique

Union de Pequeños Agricoltores v. Council: Trade association representing interests of small farmers wanted to challenge Council Regulation cancelling financial aid to olive producers.AG: Plaumann test is barrier to the right to an effective remedy before court (Fundamental Right). Therefore in case of adverse effect of EU acts, persons should have standing.(General Court: Jego Quere: Court considered applicant to have standing according to AG’s opinion in UPA.)ECJ in UPA: Plaumann test should be applied, until MS change the rules on standing by a change of the Treaty.

Individual concern

• Lisbon Treaty: Change of standing rules?Art. 263(4) TFEU makes difference between regulatory and legislative EU acts. For legislative acts, non-privileged applicants have limited standing; for regulatory (administrative) acts, non-privileged applicants have liberalized standing. Reason: Legislative acts are taken by representative institutions through a democratic process that should not be disrupted by judicial challenge.

• No standing? Raise question of validity of an act before national court: Preliminary ruling ex Art. 267

‘Regulatory acts’: Art. 263(4) TFEU

• Lisbon Treaty failed to interpret ‘regulatory act’ and ‘implementing measures’. It is left to the Court(s) to decide whether the standing rules are relaxed…or not.

Time limitation: Art. 263(5) TFEU

• “The proceedings provided for in this Article shall be instituted within two months of the publication of the measure,…” : if the applicant does not bring an action before the Court of Justice, he looses his rights to do so (however: see Art. 277 TFEU)

Consequences of annulment: Art. 264 TFEU

• The Court of Justice shall declare the act to be void: binding on all national courts

• The Court is free to determine the effects of its ruling as to which part of the Act is declared void, and from what time onwards: whether it should be considered as having never existed, or whether it should be void from the moment of the ruling onwards, or whether it should remain in force for some time after the ruling: balance between legal certainty and respect for legality.

Failure to act: Art. 265 TFEU

• Art. 4(1) TEU: principle of conferral: competences not conferred upon the Union in the Treaties remain with the Member States

• Art. 265 TFEU: Should the [institutions], in infringement of the Treaties, fail to act, the MS and the other institutions may bring an action before the ECJ to have the infringement established.

• Case 13/83: Common Transport Policy

Case 13/83: Common Transport Policy

• Art. 58 TFEU: Freedom to provide services not applicable to transport sector.

• Art. 95(1) TFEU: principle of non-discrimination applicable in transport sector…

• …Art. 95(3) TFEU: as long as the Council has made rules providing for this non-discrimination: no direct effect because of conditional wording. No obligation for EU institutions?

• ECJ: Council was under the obligation to create rules extending the scope of the freedom to provide services to the transport sector. Waiting until 1980 to do so is a failure to act.

Failure to act: Art. 265 TFEU

• Conditions for standing similar to Art. 263 TFEU.• No failure to act if institution has large discretion;

the omission has to be illegal (‘Eridiana’: Commission was not obliged to revoke its Decision).

• ‘defining a position’ is no act under Art. 263 TFEU.

• If not called upon to act within a reasonable time, nothing happens and the right to complain is lost.

(Non-)contractual liability: Artt. 268 and 340(2) TFEU

• Member States can be held liable for individual loss arising from a failure to comply with EU law (remember: Faccini Dori and Brasserie du Pecheur)

• In Bergaderm the ECJ ruled that if– EU institutions infringe an EU rule of law conferring a right to an

individual– This infringement is sufficiently serious(e.g. a manifest error of

assessment, or disproportionality in exercise of discretion), and– There is a direct causal link between infringement and damageIndividuals may be entitled to compensation. This depends

on the measure of discretion the EU institutions have!

(Non-)contractual liability: Art. 340(2) TFEU

• Liability: • Schneider – Legrand: Commission took decision

concerning a merger between Schneider and Legrand and ordered the company to be broken up.

• ECJ: Commission decision lacks a decent economic analysis and Commission had not told Schneider what it could do in order to avoid the merger being declared illegal (= violation of rights of defence).

• Loss and causality: including opportunity costs

(Non-)contractual liability: Art. 340(2) TFEU

• Liability: • Adams v Commission: Commission did not

sufficiently keep identity of informer secret, informer was put in prison in Switzerland.

• ECJ: Commission should have taken more care in trying to keep identity of informer secret, and should not have assumed that he would not return to Switzerland.

• Loss and causality: including immaterial damage (death of wife, imprisonment etc.)

Art. 277 TFEU: plea of illegality

• Expiry of 3 months’ period to commence action under Art. 263 TFEU

• Natural and legal persons are directly and individually affected by a general EU measure that would be DIRECTLY challengeable under Art. 263 TFEU

• Art. 277 TFEU offers opportunity to challenge INDIRECTLY

• Simmenthal: Challenge of Regulation as basis of a Decision that was of direct and individual concern.

Interim measures: Artt. 278 and 279 TFEU

• “Actions brought before the ECJ have no suspensory effect”: the challenged EU Act is still valid / the MS may still continue to show the same behavior (258 TFEU).

• The court may order certain interim measures having similar effects to the expected judgment on the merits, in case of– Circumstances giving rise to urgency: prevent alleged injury– Factual and legal grounds justifying the granting of the measures

sought

• The final judgment may confirm or revoke these interim measures.