EU Law Stories: Contextual and Critical Histories of European Jurisprudence 9781316340479, 9781107118898, 2016047805, 9781107545038

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eu law stories Through an interdisciplinary analysis of the rulings of the Court of Justice of the European Union, this book offers ‘thick’ descriptions, contextual histories and critical narratives engaging with leading or minor personalities involved behind the scenes of each case. The contributions depart from the notion that EU law and its history should be narrated in a linear and incremental way, to show instead that law evolves in a contingent and not determinate manner. The book shows that the effects of judge-made law remain relatively indeterminate and each case can be retold through different contextual narratives, and shows the commitment of the European legal elites to the experience of legal reasoning. The idea to cluster the stories around prominent cases is not to be fully comprehensive, but to re-focus the scholarship and teaching of EU law by moving beyond the black letter and unravelling the lawyering techniques to achieve policy results. Fernanda Nicola is Professor of Law and Director of the Program on International Organizations Law and Diplomacy at American University, Washington College of Law. She is a member of the American Society of Comparative Law (ASCL), the International Academy of Comparative Law (IACL) and Fernand Braudel Senior Fellow at the European University Institute (EUI). Bill Davies is Associate Professor of Justice, Law & Criminology at American University. He is the author of Resisting the European Court of Justice (Cambridge University Press, 2012).

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The Law in Context Series Editors: William Twining (University College London), Christopher McCrudden (Queen’s University Belfast) and Bronwen Morgan (University of Bristol).

Since 1970 the Law in Context series has been at the forefront of the movement to broaden the study of law. It has been a vehicle for the publication of innovative scholarly books that treat law and legal phenomena critically in their social, political and economic contexts from a variety of perspectives. The series particularly aims to publish scholarly legal writing that brings fresh perspectives to bear on new and existing areas of law taught in universities. A contextual approach involves treating legal subjects broadly, using materials from other social sciences, and from any other discipline that helps to explain the operation in practice of the subject under discussion. It is hoped that this orientation is at once more stimulating and more realistic than the bare exposition of legal rules. The series includes original books that have a different emphasis from traditional legal textbooks, while maintaining the same high standards of scholarship. They are written primarily for undergraduate and graduate students of law and of other disciplines, but will also appeal to a wider readership. In the past, most books in the series have focused on English law, but recent publications include books on European law, globalisation, transnational legal processes, and comparative law. Books in the Series

Ali: Modern Challenges to Islamic Law Anderson, Schum & Twining: Analysis of Evidence Ashworth: Sentencing and Criminal Justice Barton & Douglas: Law and Parenthood Beecher-Monas: Evaluating Scientific Evidence: An Interdisciplinary Framework for Intellectual Due Process Bell: French Legal Cultures Bercusson: European Labour Law Birkinshaw: European Public Law Birkinshaw: Freedom of Information: The Law, the Practice and the Ideal Brownsword & Goodwin: Law and the Technologies of the Twenty-First Century Cane: Atiyah’s Accidents, Compensation and the Law Clarke & Kohler: Property Law: Commentary and Materials Collins: The Law of Contract Collins, Ewing & McColgan: Labour Law Cowan: Housing Law and Policy Cranston: Legal Foundations of the Welfare State

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Darian-Smith: Laws and Societies in Global Contexts: Contemporary Approaches Dauvergne Making People Illegal: What Globalisation Means for Immigration and Law Davies: Perspectives on Labour Law Dembour: Who Believes in Human Rights?: The European Convention in Question de Sousa Santos: Toward a New Legal Common Sense Diduck: Law’s Families Fortin: Children’s Rights and the Developing Law Ghai & Woodham: Practising self-government: A Comparative Study of Autonomous Regions Glover-Thomas: Reconstructing Mental Health Law and Policy Gobert & Punch: Rethinking Corporate Crime Goldman: Globalisation and the Western Legal Tradition: Recurring Patterns of Law and Authority Haack: Evidence Matters: Science, Proof, and Truth in the Law Harlow & Rawlings: Law and Administration Harris: An Introduction to Law Harris, Campbell & Halson: Remedies in Contract and Tort Harvey: Seeking Asylum in the UK: Problems and Prospects Hervey & McHale: European Union Health Law Hervey & McHale: Health Law and the European Union Holder and Lee: Environmental Protection, Law and Policy Jackson and Summers: The Internationalisation of Criminal Evidence Kostakopoulou:The Future Governance of Citizenship Lewis: Choice and the Legal Order: Rising above Politics Likosky: Transnational Legal Processes Likosky: Law, Infrastructure and Human Rights Maughan & Webb: Lawyering Skills and the Legal Process McGlynn: Families and the European Union: Law, Politics and Pluralism Moffat: Trusts Law: Text and Materials Monti: EC Competition Law Morgan: Contract Law Minimalism Morgan & Yeung: An Introduction to Law and Regulation: Text and Materials Norrie: Crime, Reason and History O’Dair: Legal Ethics Oliver: Common Values and the Public–Private Divide Oliver & Drewry: The Law and Parliament

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Picciotto: International Business Taxation Probert: The Changing Legal Regulation of Cohabitation, 1600–2010 Reed: Internet Law: Text and Materials Richardson: Law, Process and Custody Roberts & Palmer: Dispute Processes: ADR and the Primary Forms of Decision-Making Rowbottom: Democracy Distorted: Wealth, Influence and Democratic Politics Sauter: Public Services in EU Law Scott & Black: Cranston’s Consumers and the Law Seneviratne: Ombudsmen: Public Services and Administrative Justice Seppänen: Ideological Conflict and the Rule of Law in Contemporary China Siems: Comparative Law Stapleton: Product Liability Stewart: Gender, Law and Justice in a Global Market Tamanaha: Law as a Means to an End: Threat to the Rule of Law Turpin and Tomkins: British Government and the Constitution: Text and Materials Twining: Globalisation and Legal Theory Twining: Rethinking Evidence Twining: General Jurisprudence: Understanding Law from a Global Perspective Twining: Human Rights, Southern Voices: Francis Deng, Abdullahi An-Na’im, Yash Ghai and Upendra Baxi Twining & Miers: How to Do Things with Rules Ward: A Critical Introduction to European Law Ward: Law, Text, Terror Ward: Shakespeare and Legal Imagination Wells and Quick: Lacey, Wells and Quick: Reconstructing Criminal Law Zander: Cases and Materials on the English Legal System Zander: The Law-Making Process

international journal of law in context: a global forum for interdisciplinary legal studies The International Journal of Law in Context is the companion journal to the Law in Context book series and provides a forum for interdisciplinary legal studies and offers intellectual space for ground-breaking critical research. It publishes contextual work about law and its relationship with other disciplines including but not limited to science, literature, humanities, philosophy, sociology, psychology, ethics, history and geography. More information about the journal and how to submit an article can be found at http://journals. cambridge.org/ijc

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EU Law Stories contextual and critical histories of european jurisprudence

Edited by

FERNANDA NICOLA Washington College of Law, American University

BILL DAVIES School of Public Affairs, American University

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University Printing House, Cambridge cb2 8bs, United Kingdom One Liberty Plaza, 20th Floor, New York, ny 10006, USA 477 Williamstown Road, Port Melbourne, vic 3207, Australia 4843/24, 2nd Floor, Ansari Road, Daryaganj, Delhi – 110002, India 79 Anson Road, #06-04/06, Singapore 079906 Cambridge University Press is part of the University of Cambridge. It furthers the University’s mission by disseminating knowledge in the pursuit of education, learning, and research at the highest international levels of excellence. www.cambridge.org Information on this title: www.cambridge.org/9781107118898 doi: 10.1017/9781316340479 © Cambridge University Press 2017 This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published 2017 Printed in the United States of America by Sheridan Books, Inc. A catalogue record for this publication is available from the British Library. Library of Congress Cataloging-in-Publication Data names: Nicola, Fernanda, 1972- editor author. | Davies, Bill, (Law teacher), editor author. title: EU law stories : contextual and critical histories of European jurisprudence / edited by Fernanda Nicola, Washington College of Law, American University, Bill Davies, School of Public Affairs, American University. other titles: European Union law stories description: New York, NY : Cambridge University Press, 2017. | Includes bibliographical references and index. identifiers: lccn 2016047805| isbn 9781107118898 (hardback : alk. paper) | isbn 9781107545038 (pbk. : alk. paper) subjects: lcsh: Law–European Union countries–Cases. | Jurisprudence–European Union countries–History. classification: lcc KJE958 .E885 2017 | ddc 341.242/2–dc23 LC record available at https://lccn.loc.gov/2016047805 isbn 978-1-107-11889-8 Hardback isbn 978-1-107-54503-8 Paperback Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party Internet Web sites referred to in this publication and does not guarantee that any content on such Web sites is, or will remain, accurate or appropriate. Downloaded from https://www.cambridge.org/core. , on , subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/9781316340479

For Brishen, Simone, and Giovanni – Fernanda Nicola For Eunice, Amelie and Allisdair – Bill Davies

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Contents

page xiii xvii xix xxxi

Contributors Acknowledgements List of Cases Cited List of Abbreviations 1

Introduction to EU Law Stories: Contextual and Critical Histories in European Jurisprudence

1

Bill Davies and Fernanda Nicola

part i manufacturing eu law stories 2

EU Law Classics in the Making: Methodological Notes on Grands arrêts at the European Court of Justice

19 21

Antoine Vauchez

3

Behind the Scenes at the Court of Justice: Drafting EU Law Stories

35

Karen McAuliffe

4

Judges or Hostages? Sitting at the Court of Justice of the European Union and the European Court of Human Rights

58

Mathilde Cohen

part ii constitutionalization and democratization 5

Imagining the Course of European Law? Parti Ecologiste ‘Les Verts’ v. Parliament as a Constitutional Milestone in EU Law

81

83

Anne Boerger and Bill Davies

6

Law Meets History: Interpreting the Van Gend en Loos Judgment Morten Rasmussen

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103

x

Contents

7

Goodbye to All That: Commission v. Luxembourg & Belgium and European Community Law’s Break with the Enforcement Mechanisms of General International Law

121

William Phelan

8

Acts of Creation: The ERTA Decision as a Foundation Stone of the EU Legal System

134

Anne McNaughton

part iii human rights and citizenship 9

Internationale Handelsgesellschaft and the Miscalculation at the Inception of the ECJ’s Human Rights Jurisprudence

155 157

Bill Davies

10

Personal Conviction and Strategic Litigation in Wijsenbeek

178

John Morijn

11

Breaking Chinese Law – Making European One: The Story of Chen, or Two Winners, Two Losers, Two Truths

201

Dimitry Kochenov and Justin Lindeboom

12

Ruiz Zambrano’s Quiet Revolution: Four Hundred and Sixty-Eight Days That Made the Immigration Case of One Deprived Worker into the Constitutional Case of Two Precarious Citizens

224

Francesca Strumia

13

Media Pluralism in Centro Europa 7 srl, or When Your Competitor Sets the Rules

245

Roberto Mastroianni

part iv market integration: competition, corporate and private law 14

The Difficult Quest to Implement Cartel Control: Grundig-Consten (1966) and Philip Morris (1987)

259 261

Laurent Warlouzet

15

The Cassis Legacy: Kir, Banks, Plumbers, Drugs, Criminals and Refugees

278

Kalypso Nicolaïdis

16

The Duty of Sincere Cooperation as a Lawyering Strategy: A Personal Account of Commission v. United Kingdom Case 804/79 John Temple Lang

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301

Contents

17

Centros, the Freedom of Establishment for Companies and the Court’s Accidental Vision for Corporate Law

xi

309

Martin Gelter

18

The Pyrrhic Victory of Mr. Francovich and the Principle of State Liability in the Italian Context

338

Antonio Bartolini and Angela Guerrieri

19

Tessili vs. Dunlop 1976: The Political Background of Judicial Restraint

357

Vera Fritz

20

Océano Grupo: A Transatlantic Victory for the Consumer and a Missed Opportunity for European Law

369

Fernanda Nicola and Evelyne Tichadou

part v beyond the market: gender and anti-discrimination 21

The Society for the Protection of Unborn Children v. Grogan: Rereading the Case and Retelling the Story of Reproductive Rights in Europe

391

393

Stéphanie Hennette Vauchez

22

Jenkins v. Kingsgate and the Migration of the US Disparate Impact Doctrine in EU Law

418

Ioanna Tourkochoriti

23

Mademoiselle Gravier and Equal Access to Education: Success and Boundaries of European Integration

446

Gisella Gori

24

The Early Retirement Age of the Hungarian Judges

471

Gábor Halmai

part vi beyond the eu borders 25

Viking’s ‘Semantic Gaps’: Law and the Political Economy of Convergence in the EU

489 491

Peter L. Lindseth

26

Melki in Context: Algeria and European Legal Integration

506

Daniela Caruso and Joanna Geneve

27

Of ‘One Shotters’ and ‘Repeat Hitters’: A Retrospective on the Role of the European Parliament in the EU-US PNR Litigation Elaine Fahey

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528

xii

28

Contents

Lessons from American Legal History: Social Rights and Market Freedoms

551

Michelle Egan

part vii conclusion 29

Learning from EU Law Stories: The European Court and Its Interlocutors Revisited

575 577

Mark Pollack

Index

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603

Contributors

Antonio Bartolini, Full Professor of Administrative Law at the University of Perugia (Italy) Anne Boerger, Contract Assistant Professor at the University of Alberta (Canada) Daniela Caruso, Professor and Jean Monnet Chair at Boston University, School of Law (USA) Mathilde Cohen, Associate Professor of Law and Robert D. Glass Scholar, University of Connecticut School of Law (USA) Bill Davies, Associate Professor, School of Public Affairs, American University, Washington, DC (USA) Michelle Egan, Full Professor and Jean Monnet Chair ad personam in the School of International Service (SIS) at American University, Washington, DC (USA) Elaine Fahey, Reader, City Law School, City, University of London (UK) Vera Fritz, Associated Researcher, Aix-Marseille Université (France) Martin Gelter, Professor of Law, Fordham University, School of Law (USA) Joanna Geneve, Associate at the litigation department of the law firm Davis, Polk & Wardwell LLP in New York City (USA) Gisella Gori, Administrator in the Secretariat of the Framework Convention for the Protection of National Minorities, Directorate General II – Democracy, Council of Europe, Strasbourg (France)

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xiv

Contributors

Angela Guerrieri, Post-Doctoral Fellow in Administrative Law at the University of Perugia (Italy) Gábor Halmai, Professor of Comparative Constitutional Law at the European University Institute (EUI) Florence (Italy) Dimitry Kochenov, Chair in EU Constitutional Law at the Department of European and Economic Law at the University of Groningen (Netherlands) and Fellow of the Europainstitut, Basel University (Switzerland) John Temple Lang, Senior Consultant at Cleary Gottlieb Steen & Hamilton in Brussels (Belgium) Justin Lindeboom, PhD Researcher on Theoretical Foundations of EU Law, University of Groningen (Netherlands) Peter Lindseth, Olimpiad S. Ioffe Professor of International and Comparative Law and Director of International and Graduate Programs at the University of Connecticut, School of Law (USA) Roberto Mastroianni, Full Professor of European Union law at the University “Federico II” in Naples (Italy) Karen McAuliffe, Reader in Law and a Birmingham Fellow at Birmingham Law School (UK) and Visiting Professor at the University of Luxembourg (Luxembourg) Anne McNaughton, Senior Lecturer in the ANU College of Law at the Australian National University, Canberra (Australia) John Morijn, Senior human law rights law adviser at the Dutch Ministry of the Interior and Kingdom Relations’ Department of Constitutional Affairs and Legislation and Assistant Professor of European human rights law at the Department of European and Economic law at the University of Groningen (Netherlands) Fernanda Nicola, Professor of Law and director of the Program on International Organizations, Law and Diplomacy at American University, Washington College of Law, Washington, DC (USA) Kalypso Nicolaïdis, Professor of International Relations and director of the Center for International Studies at the University of Oxford (UK) William Phelan, Assistant Professor of Political Science at Trinity College, Dublin (Ireland)

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Contributors

xv

Mark Pollack, Professor of Political Science and Law and Jean Monnet Chair at Temple University, Philadelphia (USA) Morten Rasmussen, Associate Professor, Saxo Institute, University of Copenhagen (Denmark) Francesca Strumia, Lecturer in Law at the University of Sheffield School of Law (UK) Evelyne Tichadou, Référendaire, European Court of Justice, Lecturer, Europa Institut, Saarland University (Germany) Ioanna Tourkochoriti, Lecturer, School of Law, NUI Galway (Ireland) Antoine Vauchez, CNRS Research Professor at the Université Paris 1– Sorbonne (France) and iCourts permanent Visiting Professor, University of Copenhagen School of Law (Denmark) Stéphanie Hennette Vauchez, Full Professor at University Paris Ouest Nanterre La Défense, (France) and Princeton LAPA Fellow (USA) Laurent Warlouzet, Associate Professor, Université d’Artois (France), Professor of Contemporary History, Université du Littoral (UCLO)

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Acknowledgements

This book would not be possible without multiple sources of generous help, support and funding. First, we would like to thank the Washington College of Law and the School of Public Affairs at American University for providing funding, support and logistical help for the conferences that preceded this work in March 2014 and March 2015, as well as continued help as we worked to complete the volume. The Law Section of the European Union Studies Association also generously provided crucial funding and support. We are grateful to the AU European Law Association and the students in our EU law classes who read and commented thoughtfully on all the chapters of the manuscript. The special events staff and in particular Jennifer Dabson, Denise Richards and our librarians, William Ryan and Billy Joe Kaufman, always provided precious support and resources. The volume’s completion is also due in large part to the tireless help of multiple editors and assistants, in particular Christin Flint, Hillary Mellinger, Atilla Baksay, Melissa Wiehenstroer, and Rachna Kapur. We also would like to thank the people who have read drafts or a conceptual piece or commented on presentations of the volume, including Andy Popper, Ann Shalleck, Augustín José Menéndez, Alexandra Kemmerer, Alexander Somek, Brishen Rogers, Cathy McCauliff, Chana Barron, Dan Keleman, Anu Bradford, Marija Bartl, Katerina Linos, Joanne Scott, Daniele Gallo, Dieter Schlenker, Francesca Bignami, Gráinne De Búrca, Karin van Leeuwen, Kim Lane Scheppele, Maria Rosaria Marella, Jeff Miller, Mark Pollack, Marley Weiss, Michele Graziadei, Flora di Donato, Nicola Lupo, Robert L. Tsai, Marise Cremona and Stefan Vogenauer. Our thanks also go out to all the participants to the conference on the Use of Foreign Law in Constitutional Adjudication, especially Judge Siniša Rodin and William Valasidis, as well as Alexandra Kemmerer, Angela Ward, Dominik Düsterhaus, Evelyne Tichadou, George Vallindas, Jessica Waters,

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xviii

Acknowledgements

Katarzyna Szychowska, Kathleen Gutman, Robert Tsai Chris McCrudden and Takis Tridimas. We also would like to thank the contributors to this volume for their patience, hard work and insight. There is an inherent challenge involved in organizing a volume of this size involving scholars from multiple disciplines and across three different continents. Fortunately, we have been able to work with scholars whose dedication and expertise have been matched by their understanding and empathy. Finally, we would like to thank the people who were closest to the front line as this work was completed – our families. Your support has made this work possible, and worthwhile.

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Cases Cited

european court of justice cases in numerical order 6/60 Humblet v. Belgian State [1960] E.C.R. 560 7/61 Commission v. Italy [1961] E.C.R. 317 13/61 Kledingverkoopbedrijf de Geus en Uitdenbogerd v. Robert Bosch GmbH and Maatschappij tot voortzetting van de zaken der Firma Willem van Rijn [1962] E.C.R. 45 26/62 Van Gend en Loos v. Nederlandse Administratie der Belastingen [1963] E.C.R. 1 90/63 and 91/63 Commission v. Luxembourg & Belgium [1964] E.C.R. 625 6/64 Costa v. E.N.E.L. [1964] E.C.R. 585 56/64 and 58/64 Consten and Grundig v. Commission [1966] E.C.R. 299 8-11/66 Société anonyme Cimenteries C.B.R. Cementsbedrijven N.V. and others v. Commission [1967] E.C.R. 75 29/69 Stauder v. City of Ulm [1969] E.C.R. 419 77/69 Commission v. Belgium [1970] E.C.R. 237 11/70 Internationale Handelsgesellschaft m.b.H v. Einfuhr und Vorratsstelle für Getreide und Futtermittel, Opinion of Advocate General Dutheillet de Lamothe [1970] E.C.R. 1125 11/70 Internationale Handelsgesellschaft v. Einfuhr- und Vorratsstelle für Getriede und Futtermittel [1970] E.C.R. 1125 22/70 Commission v. Council (ERTA) [1971] E.C.R. 263 22/70 Commission v. Council (ERTA), Opinion of Advocate General Lamothe [1971] E.C.R. 263 7/71 Commission v. France [1971] E.C.R. 1003 04/73 Nold v. Commission [1974] E.C.R. 491 152/73 Sotgiu v. Deutsche Bundespost [1974] 1 E.C.R. 153 9/74 Casagrande v. Landeshauptstadt München [1974] E.C.R. 773 41/74 Van Duyn v. Home Office [1974] E.C.R. 1337 43/75 Defrenne v. Societe anonyme belge de navigation aerienne Sabena [1976] E.C.R. 445 3/76, 4/76, and 6/76, Cornelis Kramer and Others [1976] E.C.R. 1279 12/76 Industrie Tessili Italiana Como v. Dunlop AG [1976] E.C.R. 01473 xix Downloaded from https://www.cambridge.org/core. , on , subject to the Cambridge Core terms of use, available at https://www.cambridge.org/core/terms. https://doi.org/10.1017/9781316340479

xx

List of Cases Cited

29/76 LTU Lufttransportunternehmen GmBH & Co v. Eurocontrol [1976] E.C.R. I-01541 61/77 Commission v. Ireland [1978] E.C.R. 417 88/77 Minister for Fisheries v. C.A. Schonenberg [1978] E.C.R. 473 106/77 Amministrazione delle Finanze dello Stato v. Simmenthal [1978] E.C.R. 629 175/78 The Queen v. Vera Ann Saunders [1979] E.C.R. 1129 185-204/78, J. van Dam en Zonen and Others [1979] E.C.R. 2345 237/78 Caisse régionale d’assurance maladie de Lille (CRAM) v. Toia [1979] E.C.R. 2645 32/79 Commission v. United Kingdom [1980] E.C.R. 2403 44/79 Hauer v. Land Rheinland-Pfalz [1979] E.C.R. 321 129/79 Macarthys Ltd. v. Smith [1980] E.C.R. 1275 157/79 Regina v. Stanislaus Pieck [1980] E.C.R. 2171 804/79 Commission v. United Kingdom of Great Britain and Northern Ireland [1981] E.C.R. 1045 96/80 J.P. Jenkins v. Kingsgate Ltd. [1981] E.C.R. 00911 142/80 and 143/80 Amministrazione delle Finanze dello Stato v. Essevi [1980] E.C.R. 1413 53/81 D.M. Levin v. Staatssecretaris van Justitie [1982] E.C.R. 1035 283/81 Srl CILFIT and Lanificio di Gavardo SpA v. Ministry of Health [1982] E.C.R. 3415 152/82 Forcheri v. Belgian State [1983] E.C.R. 2323 13/83 Parliament v. Council (‘Transport’) [1985] E.C.R. 1513 14/83 Von Colson and Kamann v. Land Nordrhein-westfalen [1984] E.C.R. 01891 C-293/83 Gravier v. City of Liege [1985] E.C.R. 593 294/83 Parti écologiste “Les Verts” v. European Parliament [1986] E.C.R. 01339 60/84 and 61/84 Cinéthèque SA and others v. Fédération nationale des cinémas français [1985] E.C.R. 2605 142/84 and 156/84 British-American Tobacco Company Ltd and R. J. Reynolds Industries Inc. v. Commission [1987] E.C.R. 04487 170/84 Bilka-Kaufhaus GmbH v. Weber Von Hartz [1986] E.C.R. 1607 152/84 M. H. Marshall v. Southampton and South-West Hampshire Area Health Authority [1986] E.C.R. 00723 66/85 Deborah Lawrie-Blum v. Land Baden-Württenberg [1986] E.C.R. 2121 79/85 Segers v. Bestuur van de Bedrijfsvereniging voor Bank- en Verzekeringswezen, Groothandel en Vrije Beroepen [1986] E.C.R. I-2375 293/85 Commission v. Belgium [1988] E.C.R. 305 309/85 Barra v. Belgium State and City of Liège [1988] E.C.R. 355 24/86 Blaizot v. University of Liège and others [1988] E.C.R. 379 C-39/86 Sylvie Lair v. Universität Hannover [1988] E.C.R. 3161 197/86 Steven Malcolm Brown v. The Secretary of State for Scotland [1988] E.C.R. 3205 81/87 The Queen v. Treasury and Commissioners of Inland Revenue, Ex Parte Daily Mail and General Trust PLC [1988] E.C.R. I-5483

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List of Cases Cited

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186/87 Cowan v. Trésor Public [1989] E.C.R. I-195 235/87 Annunziata Matteucci v. Communauté française of Belgium and Commissariat général aux relations internationales of the Communauté française of Belgium [1988] E.C.R. 5589 242/87 Commission v. Council [1989] E.C.R. 1425 302/87 Parliament v. Council (‘Comitology’) [1988] E.C.R. 5615 321/87 Commission v. Belgium [1989] E.C.R. 997 377/87 Parliament v. Council [1988] E.C.R. 4017 C-389/87 and 390/87 G.B.C. Eternacht and A. Moritz [1989] E.C.R. 723 C-70/88 Parliament v. Council (Chernobyl) [1990] E.C.R. I-204 145/88 Torfaen Borough Council v. B & Q plc. [1989] E.C.R. 3851 171/88 Rinner Kühn v. FWW Spezial-Gebäudereinigung GmbH & Co. KG [1989] E.C.R. 2743 C-51/89, C-90/89, and C-94/89 United Kingdom of Great Britain and others v. Council [1991] E.C.R. 2757 68/89 Commission v. The Netherlands [1991] E.C.R. I-2637 C-38/89 Ministère Public v. Guy Blanguernon [1990] E.C.R. I-83 C-308/89 Carmina di Leo v. Land Berlin [1990] E.C.R. I-4185 C-357/89 V. J. M. Raulin v. Minister van Onderwijs en Wetenschappen [1992] E.C.R. I-1027 C-3/90 M. J. E. Bernini v. Minister van Onderwijs en Wetenschappen [1992] E.C.R. I-1071 C-6/90 and C-9/90 Francovich and others v. Italian Republic [1993] E.C.R. I-5403 C-369/90 Mario Vicente Micheletti and Others v. Delegación del Gobierno en Cantabria [1992] E.C.R. I-4239 C-370/90 The Queen v. Immigration Appeal Tribunal and Surinder Singh, ex parte Secretary of State for Home Department [1992] E.C.R. I-4265 C-320/91 Criminal Proceedings Against Paul Corbeau [1993] E.C.R. I-2533 C-91/92 Faccini Dori v. Recreb Srl. [1994] E.C.R. I-3325 C-91/92 Faccini Dori v. Recreb Srl, Opinion of Advocate General Lenz [1994] E.C.R. I-3328 C-127/92 Enderby v. Frenchay Health Auth. and Secretary of State for Health [1993] E.C.R. I-5535 C-288/92 Custom Made Commercial Ltd v. Stawa Metallbau GmbH [1994] E.C.R. I-02913 C-312/93 Peterbroeck, Van Campenhout & Cie SCS v. Belgian State [1995] E.C.R. I-04599 C-393/92 Municipality of Almelo and Others v. Energiebedrijf IJsselmij NV [1994] E.C.R. I-1508 C-46/93 and C-48/93 Brasserie du Pecheur v. Bundesrepublik Deutschland and the Queen and Factortame [1996] E.C.R. I-01029 C-317/93 Nolte v. Landesversicherungsanstalt Hannover [1995] E.C.R. I-4625 C-430/93 and C-431/93 Jeroen Van Schijndel and Johannes Nicolaas Cornelis van Veen v. Stichting Pensioenfonds voor Fysiotherapeuten [1995] E.C.R. I-04705 C-435/93 Dietz v. Stichting Timiszorg Rotterdam [1996] E.C.R. I-5223

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C-445/93 Parliament v. Commission [1994] O.J. C 1/22 C-479/93 Francovich v. Italian Republic [1995] E.C.R. I-03843 C-194/94 CIA Security International SA v. Signalson SA and Securitel SPRL [1996] E.C.R. I-02201 C-229/94 Adams [1994] (removed from the Register) C-319/94 Dethier Équipement SA v. Dassy [1998] E.C.R. I-1079 C-120/95 Decker v Caisse de Maladie des Employés Privés [1998] E.C.R. I-1831 C-85/96 Maria Martínez Sala v. Freistaat Bayern [1998] E.C.R. I-2691 C-158/96 Kohll v. Union des Caisses de Maladie [1998] E.C.R. I-1931 C-348/96 Criminal proceedings against Donatella Calfa [1999] E.C.R. I-11 C-399/96 Europièces SA v. Wilifried Sanders and Automotive Industries Holding Company SA [1998] E.C.R. I-6979 C-416/96 Nour Eddline El-Yassini v. Secretary of State for Home Department [1999] E.C.R. I-1209 C-167/97 Regina v. Secretary of State for Employment, ex parte SeymourSmith and Laura Perez [1999] E.C.R. I-666 C-212/97 Centros Ltd. v. Erhvervs-og Selskabsstyrelsen [1999] E.C.R. I-1459 C-215/97 Barbara Bellone v. Yokohama SpA [1998] E.C.R. I-2191 C-378/97 Criminal proceedings against Florus Ariël Wijsenbeek [1999] E.C.R. I-6207 C-440/97 GIE Groupe Concorde and Others v. The Master of the vessel ‘Suhadiwarno Panjan’ and Others [1999] E.C.R. I-06307 C-240-C-244/98 Oceano Grupo Editorial SA v. Rocio Murciano Quintero and Salvat Editore SA v. Jose M. Sanchez Alcon Prades et al. [2000] E.C.R. I-4941 C-240-C-244/98 Oceano Grupo Editorial SA v. Rocio Murciano Quintero and Salvat Editore SA v. Jose M. Sanchez Alcon Prades et al., Opinion of Advocate General Saggio [2000] E.C.R. I-4953 C-287/98 Luxembourg v. Linster and Others [2000] E.C.R. I-06917 C-287/98 Luxembourg v. Linster and Others, Opinion of Advocate General Léger [2000] E.C.R. I-6917 C-443/98 Unilever Italia SpA v. Central Food SpA [2000] E.C.R. I-07535 C-456/98 Centrosteel Srl v. Adipol GmbH [2000] E.C.R. I-6007 C-184/99 Grzelcczyk v. Centre public d’aide sociale d’Ottignires-Louvainla-Neuve [2001] E.C.R. I-6193 C-413/99 Baumbast and R v. Secretary of State for the Home Department [2002] E.C.R. I-7091 C-60/00 Mary Carpenter v. Secretary of State for the Home Department [2002] E.C.R. I-6279 C-208/00 Überseering BV v. Nordic Construction Company Baumanagement GmbH [2002] E.C.R. I-9919 C-473/00 Cofidis SA v. Jean-Louis Fredout [2002] E.C.R. I-10898 C-167/01 Kamer van Koophandel en Fabrieken voor Amsterdam v. Inspire Art Ltd. [2003] E.C.R. I-10155 C-243/01 Criminal proceedings against Piergiorgio Gambelli and Others [2003] E.C.R. I-13031

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C-4/02 and C-5/02, Hilde Schönheit v. Stadt Frankfurt am Main and Silvia Becker v. Land Hssen [2003] E.C.R. I-12575 C-9/02 Hughes de Lasteyrie du Saillant v. Ministère de l’Économie, des Finances et de l’Industrie [2004] E.C.R. I-2409 C-148/02 Garcia Avello v. Belgian State [2003] E.C.R. I-11613 C-200/02 Kunqian Catherine Zhu and Man Lavette Chen v. Secretary of State for the Home Department [2004] E.C.R. I-9925 C-201/02 Wells v. Secretary of State for Transport, Local Government and the Regions [2004] E.C.R. I-00723 C-235/02 Criminal proceedings against Marco Antonio Saetti and Andrea Frediani [2004] E.C.R. I-1005 C-237/02 Freiburger Kommunalbauten GmbH Baugesellschaft & Co. KG v. Ludger Hofstetter and Ulrike Hofstetter [2004] E.C.R. I-3412 C-147/03 Commission v. The Republic of Austria [2005] E.C.R. I-05969 C-209/03 The Queen, on the application of Dany Bidar v. London Borough of Ealing and Secretary of State for Education and Skills [2005] E.C.R. I-2119 C-403/03 Egon Schempp v. Finanzamt München v. [2005] E.C.R. I-6421 C-411/03 SEVIC Systems AG [2005] E.C.R. I-10805 C-540/03 Parliament v. Council [2006] E.C.R. I-5769 C-548/03 Parliament v. Council (Removed from the register on 16 December 2004) C-144/04 Werner Mangold v. Rüdiger Helm [2005] E.C.R. I-09981 C-196/04 Cadbury Schweppes plc. and Cadbury Schweppes Overseas Ltd v. Commissioners of Inland Revenue [2006] E.C.R. I-7995 C-317/04 Parliament v. Council [2006] E.C.R. I-2457 C-317/04 and C-318/04 Parliament v. Council and Commission (Opinion of Advocate-General Leger) [2006] E.C.R. I-4721 C-318/04 Parliament v. Commission [2006] E.C.R. I-2467 C-372/04 The Queen, on the application of Yvonne Watts v Bedford Primary Care Trust and Secretary of State for Health [2006] E.C.R. I-4376 C-413/04 Parliament v. Council [2006] E.C.R. I-11221 C-168/05 Mostaza Claro v. Centro Movil Milenium SL [2006] E.C.R. I-10421 C-222-C-225/05 van der Weerd [2007] E.C.R. I-04233 C-341/05 Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet and Others [2007] E.C.R. I-11767 C-380/05 Centro Europa 7 Srl v. Ministero dello Comunicazioni [2008] E.C.R. I-349 C-403/05 Parliament v. Commission [2007] E.C.R. I-9045 C-429/05 Rampion and Godard v. Franfinance SA and K par K SAS [2007] E.C.R. I-8017 C-438/05 International Transport Workers’ Federation and Finnish Seamen’s Union v. Viking Line ABP and OÜ Viking Line Eesti [2007] E.C.R. I-10779 C-133/06 Parliament v. Council [2008] E.C.R. I-3189 C-210/06 Cartesio Oktató és Szolgáltató bt. [2008] E.C.R. I-9641 C-346/06 Dirk Rüffert v. Land Niedersachsen [2008] E.C.R. I-01989 C-152-154/07 Arcor AG & Co., Communication Services TELE2 GmbH and Firma 01051 Telekom GmbH [2008] E.C.R. I-05959

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C-155/07 Parliament v. Council [2008] E.C.R. I-8103 C-158/07 Förster v. Hoofdirectie van der Informatie Beheer Groep [2008] E.C.R. I-08507 C-166/07 Parliament v. Council [2009] E.C.R. I-7135 C-474/07 Parliament v. Commission [2008] ECLI:EU:C:2008:735 C-512/07 P(R), C-15/08 P(R), C-15/08 P(R) Ochetto and European Parliament v. Donnici [2009] E.C.R. I-0000 C-533/07 Falco Privatstiftung and Thomas Rabitsch v. Gisela WellerLindhorst [2009] E.C.R. I-03327 C-555/07 Kücükdeveci v. Swedex GmbH & Co. KG [2010] E.C.R. I-00365 C-22/08 and 23/08 Athanasios Vatsouras and Josif Koupatantze v. Arbeitsgemeinschaft (ARGE) Nürnberg [2009] E.C.R. I-4585 C-40/08 Asturcom Telecomunicaciones SL v. Cristina Rodriguez Nogueira [2009] E.C.R. I-957 C-73/08 Nicolas Bressol and others v. Gouvernement de la Communauté française [2012] E.C.R. I-2735 C-135/08 Rottmann v. Freistaat Bayern [2010] E.C.R. I-1449 C-137/08 VB Pénzügyi Lízing Zrt. v. Ferenc Schneider [2010] E.C.R. I-10847 C-227/08 Martín Martín v. EDP Editores SL [2009] E.C.R. I-11939 C-243/08 Pannon GSM [2009] E.C.R. I-4713 C-317-320/08 Alassini [2010] E.C.R. I-02213 C-566/08 Parliament v. Council [2010] OJ C234/30 (removed from register) C-34/09 Gerardo Ruiz Zambrano v. Office national de l’emploi (ONEm) [2011] E.C.R. I-1177 C-434/09 McCarthy v. Secretary of State for the Home Department [2011] E.C.R. I-3375 C-130/10 Parliament v. Council [2012] ECLI:EU:C:2012:472 C-188/10 and C-189/10 Aziz Melki and Sélim Abdeli [2010] E.C.R. I-5667 C-355/10 Parliament v. Council [2012] ECLI:EU:C:2012:516 C-472/10 Invitel [2012] ECLI:EU:C:2012:24 C-490/10 Parliament v. Council [2012] ECLI:EU:C:2012:525 C-618/10 Banco Español de Crédito SA v. Camino [2012] ECLI:EU: C:2012:349 C-61/11 PPU El Dridi [2011] E.C.R. I-03015 C-75/11 Commission v. Austria [2012] ECLI:EU:C:2012:605 C-199/11 Europese Gemeenschap v. Otis N.V. and others [2012] E.C.R. I- 0000 C-256/11 Murat Dereci and Others v. Bundesministerium für Inneres [2011] ECLI:EU:C:2011:734 C-329/11 Alexandre Achughbabian v. Préfet du Val-de-Marne [2011] E.C.R. I-12695 C-356/11 and 357/11 O, S v. Maahanmuuttovirasto and Maahanmuuttovirasto v L [2012] ECLI:EU:C:2012:776 C-415/11 Aziz v. Caixa d’Estalvis de Catalunya [2013] ECLI:EU:C:2013:164 C-472/11 Banif Plus Bank Zrt v. Csaba Csipai and Viktoria Csipai [2013] ECLI: EU:C:2013:88 C-476/11 HK Denmark v. Experian [2013] ECLI:EU:C:2013:590

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C-488/11 Asbeek Brusse and Garabito v. Jahani BV [2013] ECLI:EU: C:2013:341 C-658/11 Parliament v. Council [2014] ECLI:EU:C:2014:2025 C-32/12 Soledad Duarte Hueros v. Autociba SA and Automoviles Citoren España SA [2013] EU:C:2013:637 C-86/12 Adzo Domenyo Alokpa and Others v. Ministre du Travail, de l’Emploi et de l’Immigration [2013] ECLI:EU:C:2013:645 C-87/12 Kreshnik Ymeraga v. Ministre du Travail, de l’Emploi et de l’Immigration ECLI:EU:C:2013:291 C-103/12 Parliament v. Council [Case closed] [2014] ECLI:EU: C:2014:2400 C-131/12 Google Spain SL v. Agencia Española de datoes (AEPD) and Gonzalez [2014] ECLI:EU:C:2014:317 C-140/12 Pensionsversicherungsanstalt v. Peter Brey [2013] ECLI:EU: C:2013:565 C-286/12 Commission v. Hungary [2012] ECLI:EU:C:2012:687 C-286/12 Commission v. Hungary, Opinion of Advocate General Kokott [2012] ECLI:EU:C:2012:687 C-293/12 and C-594/12 Digital Rights Ireland and Seitlinger and Others [2014] E.C.R. I-000 C-350/12 P Council v. in’t Veld [2014] E.C.R. I-000 C‑350/12 P Council v. in ‘t Veld, Opinion of Advocate General Sharpston [2014] E.C.R.-I 000 C-402/12P Parliament v. Vereniging Milieudefensie and Stichting Stop Luchtverontreiniging Utrecht [2015] ECLI:EU:C:2015:4 C-470/12 Pohotovost’ s. r. o. v. Miroslav Vasuta [2014] ECLI:EU: C:2014:101 C-26/13 Kásler and Káslerné Rábai v. OTP Jelzálogbank Zrt. [2014] ECLI:EU: C:2014:282 C-65/13 Parliament v. Commission [2014] ECLI:EU:C:2014:2289 C-112/13 A v. B and Others [2014] ECLI:EU:C:2014:2195 C-124/13 Parliament v. Council [2015] ECLI:EU:C:2015:790 C-317/13 Parliament v. Council [2015] ECLI:EU:C:2015:223 C-333/13 Elisabeta Dano, Florin Dano v. Jobcenter Leipzig [2014] ECLI:EU: C:2014:2358 C-497/13 Faber [2015] ECLI:EU:C:2015:357 C-497/13 Faber, Opinion of Advocate General Sharpston [2015] EU: C:2015:357 C-540/13 Parliament v. Council [Case in progress] C-679/13 Parliament v. Council [Case in progress] C-48/14 Parliament v. Council [2015] ECLI:EU:C:2015:91 C-169/14 Sánchez Morcillo and Abril García v. Banco Bilbao Vizcaya Argentaria SA [2014] ECLI:EU:C:2014:2099 C-362/14 Schrems v. Data Protection Commissioner [2015] pending C-377/14 Radlinger and Radlingerová, Opinion of Advocate General Sharpston [2015] ECLI:EU:C:2015:769

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european general court cases T-42/89 Parliament v. Yorck von Wartenburg [1990] E.C.R. II-00025 T-25/95 Cimenteries CBR and Others v. Commission [2000] E.C.R. II-508 T-529/09 In ‘t Veld v. Council [2012] E.C.R. II-000 T-301/10 In’t Veld v. Commission [2013] E.C.R. II-000

european court of justice opinions Opinion Opinion Opinion Opinion Opinion Opinion Opinion Opinion Opinion Opinion Opinion

1/75 (Local Cost Standard), [1975] E.C.R. 1355 1/76 (Laying-Up Fund), [1977] E.C.R. 741 1/78 (Natural Rubber Agreement), [1979] E.C.R. 2871 1/91 (EEA Draft Agreement), [1991] E.C.R. I-6079 1/91 [1991] E.C.R. I-6079 2/91 (ILO Convention 170), [1993] E.C.R. I-1061 1/92 (EFTA Agreement II), [1992] E.C.R. I-2821 2/92 (Third Revised OECD Decision), [1995] E.C.R. I-521 1/94 (WTO Agreement) [1994] E.C.R. I-5267 2/13 [2014] ECLI:EU:C:2014:2454 1/15 [Case in progress]

us supreme court cases Olcott v. the Supervisors, 83 US 678 (1872) Lochner v. New York, 198 U.S. 45 (1905) Shelley v. Kraemer, 334 U.S. 1 (1948) Monroe v. Pape, 365 U.S. 167 (1961) Griggs v. Duke Power Co, 401 US 424 (1971) Moose Lodge v. Irvis, 407 U.S. 163 (1972) Dothard v. Rawlinson 433 US 321 (1977) Int’l. Bhd. of Teamsters v. United States, 431 US 324 (1977) City of Los Angeles Dep’t of Water & Power v. Manhart, 435 US 702 (1978) City of Richmond v. J.A. Croson Co., 488 US 469 (1989) County of Washington v. Gunther, 452 US 161 (1981) Adarand Constructors v. Pena, 515 US 200 (1995) Ricci v. DeStefano, 557 US 557 (2009)

us federal court cases Coopersmith v. Roudebush, 517 F.2d 818 (D.C. Cir. 1975) Christensen v. Iowa 563 F. 2d 353 (8th Cir. 1977) Chrisner v. Complete Auto Transit, Inc. 645 F.2d 1251 (6th Cir. 1981)

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Coe v. Yellow Freight Sys. Inc. 646 F. 2d 444 (10th Cir. 1981) Atonio v. Wards Cove Packing Co., 768 F.2d 1120 (9th Cir. 1985) AFSCME v. State of Washington, 770 F.2d 1401 (9th Cir. 1985) Am. Nurses Ass’n v. Illinois, 783 F.2d 716 (7th Cir. 1986) Illhardt v. Sara Lee Corp. 118 F.3d 1151 (5th Cir. 1997) Pottenger v. Potlatch, Corp. 329 F.3d 740 (9th Cir. 2003) Bacon v. Honda of Am. Mfg., Inc., 370 F.3d 565 (6th Cir. 2004) Wernsing v. Dep’t Human Servs, 427 F.3d 466 (7th Cir. 2005) El v. Southeastern Pennsylvania Transportation Authority, 479 F.3d 232 (3d Cir. 2007) Sims-Fingers v. City of Indianapolis, 493 F.3d 768 (7th Cir. 2007)

us states supreme court cases Arnold v. Mundy, 6 N.J.L 1 (1821)

european court of human rights cases Handyside v. United Kingdom, 5493/72 [1976] ECHR 5 Open Door and Dublin Well Woman v. Ireland, 14234/88 [1992] ECHR 68 Chahal v. UK, 22414/93 [1996] ECHR 54 Zarb Adami v. Malta, 17209/02 [2006] ECHR 637 D.H. and Others v. the Czech Republic, 57325/00 [2007] ECHR 922 Tremblay v. France, 37194/02 [2007] ECHR 373 Glas Nadezhda Eood and Elenkov v. Bulgaria, 14134/02 [2007] ECHR 804 Dickson v. United Kingdom, 44362/04 [2007] ECHR 1050 Opuz v. Turkey, 33401/02 [2009] ECHR 870 A, B and C v. Ireland, 25579/05 [2010] ECHR 2032 S H v. Austria, 57813/00 [2011] ECHR 427 Daoudi v. France, Application No. 19576/08 [2011] ECHR 1552 H.R. v. France, 64780/09 [2011] ECHR 151 Baka v. Hungary, 20261/12 [2014] ECHR 528

european commission decisions Grundig-Consten [1964] OJ L161/7 DRU-Blondel [1965] OJ L131/8 Hummel-Isbecque [1965] OJ L156/8 Maison Jallatte-Hans Voss [1965] OJ L 3/9 Transocean Marine Paint Association [1967] OJ L351/31 Aerospatiale-Alenia/de Havilland [1991[ OJ L334/34 Boeing/McDonnell Douglas [1997] OJ L336/40

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european council decisions Comett [1986] OJ L222/29 Erasmus [1987] OJ L166/30 Socrates [1995] OJ L87/10 Council Decision establishing an action program for the implementation of a European Community vocational training policy [1994] OJ L340/8

european member states cases United Kindgom 1019-1022/1/03 Umbro Holdings Ltd v. Office of Fair Trading; Manchester United PLC v. Office of Fair Trading; Allsports Ltd v. Office of Fair Trading; JJB Sports PLC v. Office of Fair Trading [2005] C.A.T. 22 Man Lavette Chen and Kunqian Catherine Zhu (dependent) v. Secretary of State for the Home Department [2002] I.A.T. Imm. AR 2-3 JP Jenkins v. Kingsgate (Clothing Productions) Ltd, 30248/78/E, Industrial Tribunal, 15 January 1979, 1979 WL 466469 J.P. Jenkins v. Kingsgate (Clothing Productions) Limited [1980] E.A.T. 1 C.M.L.R. 81 J.P. Jenkins v. Kingsgate (Clothing Productions) Ltd. [1981] E.A.T. 1 W.L.R. 1485 Italy Corte Costituzionale [Constitutional Court], Frontini e a. n. 183, 27 Dec 1973 Cassazione Sezione Civile, SS.UU., 22 luglio 1999, no. 500 Tribunale amministrativo per il Lazio, Judgment no. 03516/2013 France Cass., Ass. Pl. QPC 16 avr. 2010, Abdeli et Melki – Cour de Cassation [Cass.] [Supreme Court for Judicial Matters] ass. plén., Apr. 16, 2010 Cass., QPC, 29 juin 2010, Melki et Abdeli N 10-40.002 - Cour de Cassation [Cass.][Supreme Court for Judicial Matters] ass. plén., June 29, 2010 Tribunal de Grande Instance de Lille, Juge des Libertés e de la Détention, No. 10/00422, March 25, 2010 Tribunal de Grande Instance [TGI][ordinary court of original juridiction] Lille, Juge des Libertés e de la Détention, No. 10/00422, March 25, 2010 Conseil Constitutionnel [CC][Constitutional Court] decision No. 2010605DC, May 12, 2010, J.O. 8897 Conseil Constitutionnel [CC][Constitutional Court] decision No. 93-323 DC, August 5, 2010, J.O. 11193

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Belgium Cour Constitutionnelle [CC] [Constitutional Court] decision no 73/2008, Apr. 24, 2008 Tribunal de Première Instance [Civ.] Tribunal of First Instance] Liege, Dec. 19, 2014, n. 14/1629/B

Ireland Fajujonu v. Minister for Justice, [1990] 2 I.R. 151 A.O. & D.L. v. Minister for Justice, [2003] 1 I.R. 1

Germany 1 BvR 400/51 – Lüth Decision, 15 January 1958 - BVerfGE 7, 198 1 BvR 248/63 & 216/6 – European Regulations decision, 18 October 1967 – BVerfGE 22, 293 2 BvL 52/71 – Solange I, 29 May 1974 – BVerfGE 37 2 BvR 2134, 2159/92 – Maastricht Decision, 12 October 1993 – BVerfGE 89, 155 2 BvR 197/83 – Solange II decision, 22 October 1986 – BVerfGE 73, 339 Verwaltungsgericht Frankfurt a.M., Beschluss vom 14.07.1972 – II/2- E 228/69

Hungary Alkotmánybíróság (AB) [Constitutional Court] July 16, 2012, MK 33/2012 (VII.17) Alkotmánybíróság (AB) [Constitutional Court] March 19, 2013 MK 3076/2013 (III. 27)

International Arbitration France v. United States, 18 R.I.A.A. 417 (Perm. Ct. Arb. 1978) based on Air Service Agreement of 27 March 1946 Between the United States of America and France.

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Abbreviations

ACTA AETR

AG AGCOM APD BVerfG CAP CEAS CBC CJEU CLS DCFTA DG DHS EAW EC ECE ECHR ECJ ECHR

Anti-Counterfeiting Trade Agreement Accord Européen sur les Transports Routiers (also known by its English acronym, ERTA, or European Road Transport Agreement; the full name of the agreement is the European Agreement Concerning the Work of Crews of Vehicles Engaged in International Road Transport) Advocate General Italian Communications Authority American Political Development German Constitutional Court (Bundesverfassungsgericht) Common Agricultural Policy Common European Asylum System US Customs and Border Control (also known as USCBP) Court of Justice of the European Union Critical Legal Scholars Deep and Comprehensive Free Trade Agreements Directorates-General US Department of Homeland Security (also known as USDHS) European Arrest Warrant European Community UN Economic Commission for Europe European Commission of Human Rights (until the entry into force of Protocol 11 in 1998) European Court of Justice / Court of Justice (cited both ways) European Convention of Human Rights xxxi

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ECSC ECtHR EDC EEC ELDR ELJ ENP EP EPC EPSO ERTA

ESM ETUC EU EUI EURATOM FAC FDI FOC FOIA FSU FTA GSP HAEU IAA ISPA ITF LIBE MEP MEQRs NCRF NJO NSA PHARE

List of Abbreviations

European Coal and Steel Community European Court of Human Rights European Defence Community European Economic Community European Liberal Party European Law Journal European Neighborhood Policy European Parliament European political community (abbreviation; not an entity) European Personnel Selection Office European Road Transport Agreement (also known by its French acronym, AETR, or Accord Européen sur les Transports Routiers; the full name of the agreement is the European Agreement Concerning the Work of Crews of Vehicles Engaged in International Road Transport) European Stability Mechanism European Trade Union Confederation European Union European University Institute European Atomic Energy Community Frankfurt Administrative Court Foreign Direct Investment ‘Flag of Convenience’ Policy Freedom of Information Act Finish Seamen’s Union Free Trade Agreement Generalized System of Preferences Historical Archives of the European Union Immigration Appellate Authority Instrument for Structural Policies for Pre-Accession International Transport Workers Federation European Parliament, Committee on Civil Liberties, Justice and Home Affairs Member of the European Parliament Measures Equivalent to Quantitative Restrictions New Common Regulatory Framework National Judicial Office National Security Agency

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List of Abbreviations

PNR QPC TBT TEC TEU TFEU TTIP UNHCR USCBP USDHS UK WTO

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Programme of Community Aid to the Countries of Central and Eastern Europe Passenger Name Records question prioritaire de constitutionnalité Technical Barriers to Trade Treaty on European Community The Treaty on European Union (also cited as TFEU; see next entry) Treaty on the Functioning of the European Union Transatlantic Trade and Investment Partnership United Nations High Commissioner for Refugees United States Customs and Border Patrol (also known as CBP) United States Department of Homeland Security (also known as DHS) United Kingdom World Trade Organization

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1 Introduction to EU Law Stories Contextual and Critical Histories in European Jurisprudence

bill davies and fernanda nicola

In 2014, the Court of Justice of the European Union (CJEU) began shipping more than 270 boxes of official documents with restricted access to the public to Villa Salviati, home of the Historical Archives of the European Union at the European University Institute (EUI) in Florence. At a grand opening ceremony in December 2015, the Court’s President Koen Lenaerts welcomed scholars to conduct their research in the official archive for the very first time. This opening of the judicial archives was celebrated as the result of concerted efforts to overcome the fears of loss of confidentiality in a Court that, safely ‘tucked away in the fairyland Duchy of Luxembourg’,1 has been thoroughly committed to maintaining the secrecy of its deliberations. In the careful balance between secrecy and transparency – or, as President Lenaerts put it, between ‘the proper functioning of the judicial proceedings and openness’ – the pendulum has now shifted towards the latter. In search of greater transparency in its legal reasoning, the Court has struggled to preserve general principles such as equality of arms and access to a fair trial while also enhancing its visibility to the general public.2 Yet the symbolic opening of the judicial archives of the Court might not fully appease its critics because important documents such as the preliminary report of the juge rapporteur or the personal papers of the judges are not included in the public files in order to maintain the secrecy of judicial deliberations. As observers of the debates over the balance between secrecy and transparency, we are interested in the context in which such debates take place, what

1

2

Eric Stein, Lawyers, Judges and the Making of a Transnational Constitution, 75 Am. J. Int’l. L. 1 (1981). See Case C-199/11 European Union v Otis N.V. and others (2012) ECR I- 0000 (holding that the right of access to a tribunal and the equality of arms principle are safeguarded by the system of judicial review of the Commission).

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developments helped to locate them, and how EU legal scholars shape them. Since 2008, the EU has been hit by simultaneous crises that have shaken the foundations of the integration project more than any other time in its sixty-year history. Faced with significant problems in financial and democratic governance, extreme recalcitrance in certain Member States, the imbalance and change caused by the growing dominance of individual Member States, and the largest flow of migrants across European borders since World War II, scholars of EU law have developed new awareness of the significance of the legal regime they study. On the one hand, in the face of the political and economic maelstrom, EU law is recognized as a powerful, pervasive, uniform and binding force across European borders. The public and politicians alike have used this as a crucial rallying point for debates in the United Kingdom about whether it should leave or remain in the EU. Given this growing recognition of the impact of EU law on the lives of European citizens, scholarship on EU law has moved beyond simple doctrinal analyses, relevant only for practitioners and judges, to a more nuanced retelling of the cases that have shaped this system within their contextual framework. This more mature approach in scholarship is slowly beginning to match the growing maturity of the legal system. On the other hand, given the existential nature of the crises facing the EU, there is also awareness that despite its strength, EU law might not be enough to ‘save the day’. EU lawyers and scholars, as a result, have also become less self-assured. This change in legal consciousness has prompted more grounded, deeper research into how EU law came to be and how it is rooted in the developments of a European society emerging as a result of both the integration of the Member States and also of private and public interest lawyering spurred by judges, scholars, lawyers and other non-legal interlocutors of the Court. The cover of this book originates from a sketch that was amongst the papers transferred to the EUI Historical Archives by the Court. It depicts one of the very first designs for the European judges’ robes, that crucial part of the judicial armoury that separates the adjudicator from the mere mortals in the courtroom and displaying the intimate connection between justice, law and morality.3 We selected this particular drawing for the cover of this volume because it very much encapsulates the essence of a relatively young Court committed at the same time to build its jurisprudence and its aesthetic. The focus of EU law stories is in as much the outcome of the law as its construction, its symbolism, its synthetic creation and its design. The Court of Justice is

3

See Ronald Dworkin, Justice in Robes (2008).

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a unique institution, sitting in a precarious and powerful position as the leading court of an often fractious European Union. How the semantic, jurisprudential and doctrinal principles that the Court has helped to create came to be warrants and deserves our full attention. This collective volume is a first step in this direction, combining an appeal for scholars with a utility for students of EU law. We brought together lawyers, historians and political scientists to engage in an interdisciplinary analysis of well-known or enigmatic EU law cases. EU Law Stories collects ‘thick’ descriptions, critical narratives and contextual histories engaging with the major and minor personalities involved behind the scenes of each case. Our collaborative research departs from the notion that the history of EU law should be narrated linearly and incrementally. We instead show that EU law evolves in a contingent manner in response to efforts by private and public interest lawyers, social movements, leading personalities or jurists working behind the scenes. If the volume demonstrates that the effects of EU judgemade law remain relatively indeterminate and that each case can be retold through different contextual narratives, by the same token it shows the commitment of the European legal elites to the experience of legal reasoning and the construction of a European legal consciousness.4 EU Law Stories shows that European legal consciousness shares the belief that the constitutionalization of EU law that included broader competences and fundamental rights happened through bricolage rather than in a linear manner, reaffirming persistent gaps between the law in the books and the law in action, the indeterminacy and open texture of rights arguments and the reproduction of inequalities.5 The idea to cluster the stories around case law is in part a function of EU law as taught especially in the classic Anglo-American tradition through its evolving adjudication.6 The focus on the decisions of the CJEU is also the product of the way in which European legal consciousness was consolidated: through the predominance of a judicial formant that could unite its legal

4

5

6

See Duncan Kennedy, Legal Reasoning, Collected Essays (2008) (legal consciousness represents the shared legal ideas, intellectual constructs and judicial langue spoken by lawyers). See Duncan Kennedy, The Critique of Rights in Critical Legal Studies, in Brown and Halley, eds., Left Legalism/Left Critique (2002); Susan S. Silbey, After Legal Consciousness, 1 Annu. Rev. L. Soc. Sci. 323 (2005). See Damian Chalmers, Gareth Davies, & Giorgio Monti, European Union Law: Text and Materials (3rd ed. 2015); Paul Craig & Grainne De Burca, EU Law: Text, Cases, and Materials (6th ed. 2015); Roger Goebel, et al., Cases and Materials on European Union Law (4th ed. 2015).

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elites.7 Of course, there are endless arguments to be had that Case X should be included at the expense of Case Y, or that Case Z has been forgotten entirely. Our goal in this volume is not to be fully comprehensive, but instead to begin a focus in scholarship and teaching that looks beyond the black letter of EU law and unravels the lawyering techniques used to achieve different policy results. Not surprisingly, in the past sixty years, EU scholars have developed a solid canon of CJEU jurisprudence tracing its doctrinal evolution rather than the policy implications and the different lawyering techniques driven, for instance, by parallel importers rather than public interest lawyers. The existing canon plays a central role in the legal consciousness of EU-trained lawyers and their ability to deliver skilled lawyering for their clients.8 Each chapter in our volume challenges the dominant story or creates nuances by retelling a story through a variety of legal and non-legal key ‘interlocutors’ who re-encounter their lawyering strategies and their policy goals through adjudication. EU law provides new lawyering tools for both institutional and private litigants to gain economic benefits or to achieve public interest and social justice goals. In mapping these different strategies we show that EU law not only creates incentives for litigation but, more interestingly, allows ‘new voices and new constituencies’ to develop critical lawyering strategies often overshadowed by canonical narratives of EU law.9 We have encouraged the authors of this volume to work as EU law ‘detectives’ and focus on what causes brought a case to the CJEU by analyzing the strategic forces at play and/or the impact litigation behind each case, as well as the results produced by the judgment. As these classical causal questions stem from a law and society approach, we asked our collaborators to pay close attention to legal and non-legal actors involved in developments leading up to each case. This ex ante approach is represented by a majority of chapters included in the volume. Yet, in line with the notion that law has its own relative autonomy from society, many of these EU judgments tend to have a life of their own in European legal reasoning, and among legal and judicial elites in certain Member States, and even outside the European borders. Therefore, even though cases like Zhu, Gravier or Centros stand for well-known EU law doctrines or reinforce a

7

8

9

See Rodolfo Sacco, Legal Formant: A Dynamic Approach to Comparative Law, 39 Am. J. Comp. L. 1 (1991). See The Court of Justice and the Construction of Europe, The Past and Future of EU Law, La Cour de justice de L’Union Europeene sous la presidence de Vassilios Skouris [2003–2005] (Bruylant 2016). See Gordon Harrison & Sanford M. Jaffe, The Public Interest Law Firm: New Voices for New Constituencies (1982); Louise G. Trubek, Critical Lawyering: Towards a New Public Interest Practice, 1 B.U. Pub. Int. L.J. 49 (1991).

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determinist narrative of greater or deeper Europeanization, their consequences for particular groups are very different from how standard narratives portray them. These ex post causal chapters such as Melki, Centro Europa 7Srl and the Hungarian Judges show how the impact of EU jurisprudence – despite its promises of equal treatment – might lead to consequences opposite from those intended and reproduce systemic inequalities. Our main purpose in this volume is to shift the current dominant approach from the doctrinal, which emphasizes the necessary evolution of EU law by bracketing questions about the nature or correctness of legal rules, to a more historical and critical understanding of the dimensions along which EU legal consciousness has evolved.10 We take an interdisciplinary approach to show how other dimensions of European integration, beyond the legal, historic, ideological and professional, have influenced the jurisprudence of the CJEU. In addition, the rich interdisciplinary and international backgrounds of our authors provide this volume with different methodologies ranging from archival work and interviews with litigants, judges, advocates generals, lawyers and référendaires to the analysis of transatlantic relations and political economies of integration. This rich interdisciplinary methodology allows us to track the different experiences in legal reasoning that constitute the langue and parole of European legal consciousness across a variety of legal doctrines such as corporate, constitutional, anti-discrimination and consumer law. Moreover, we asked our authors to write not only for scholarly peers but also for a student audience, since we argue strongly that a more contextual approach to the teaching of EU law to the next generation of scholars and practitioners is the crucial next step in consolidating the maturity of this field.

the impetus behind eu law stories At least three different inspirations deeply influenced us when we began articulating this project in 2013. A first influence was the existential crisis articulated in EU law scholarship; a second was the work by the new EU legal historians and their call for more contextual, historical and interdisciplinary research in EU law; and a final impetus came from our own teaching of EU law from the outside, which generated a feeling of self-estrangement towards a discipline that marked our own identity.11

10 11

See Kennedy, Legal Reasoning, p.3. See David M. Trubek & Mark Galanter, Scholars in Self-Estrangement: Reflections on the Crisis in Law and Development Studies in the United States, 4 Wis. L. Rev. 1062 (1974).

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In the aftermath of the EU financial crisis in 2008, many EU scholars began looking back; they focused on what went wrong in European integration, instead of on its successes. Scholars from different disciplines commonly articulated the existential crisis around the mission of EU law, its lack of a solid justice paradigm12 and the fact that as a discipline, it received relatively little scholarly attention globally, particularly in the United States. In the past, comparative lawyers criticized European legal reasoning for being dogmatic,13 compartmentalized14 and formalist.15 More recently, however, scholars exposed the malaise of EU law,16 its misplaced global human rights ambitions17 and its rise and fall in US legal academia as a by-product of transatlantic political and economic divergences.18 In our view, however, a more fundamental problem is that EU legal scholarship tends to structurally disregard legal reasoning and methodologies from outside Europe. For example, while EU scholars do undertake comparative law analyses, these are mostly inward looking, with some exceptions addressing the mainstream areas within the US legal experience, such as law and economics in competition law19 or federalism in constitutional law.20 To engage in a global and interdisciplinary conversation, EU lawyers should be more receptive to influences outside the EU and the different methodologies common within other legal regimes, such as law and society, critical legal theory and post-colonial studies that remained relatively underdeveloped in

12

13

14

15

16

17

18

19

20

See Europe’s Justice Deficit (Gráinne de Búrca, Dimitry Kochenov & Andrew Williams, eds., 2014). Kristoffel Grechenig & Martin Gelter, The Transatlantic Divergence in Legal Thought: American Law and Economics vs. German Doctrinalism, 31 Hastings Int’l & Comp. L. Rev. 295 (2008). Mauro Cappelletti, John Henry Merryman, & Joseph M. Perillo, The Italian Legal System: An Introduction (1967). Christian Joerges & Florian Rödl, On De-Formalisation in European Politics and Formalism in European Jurisprudence in Response to the Social Deficit of the European Integration Project - Reflections after the Judgments of the ECJ in Viking and Laval EU Law, 4 HanseLR. (2008). Joseph H. H. Weiler, Deciphering the Political and Legal DNA of European Integration: An Exploratory Essay, in Philosophical Foundations of European Union Law 157−58 (Julie Dickson & Pavlos Eleftheriadis eds., 2013). Gráinne de Búrca, The Road Not Taken: The EU as a Global Human Rights Actor, 105 A.J.I.L. 649 (2011). Daniela Caruso, European Union Law in U.S. Legal Academia, 20 Tul. J. Int’l & Comp. L. 175 (2011). EU Competition Law and Economics (Damien Geradin, Anne Layne-Farrar, & Nicolas Petit, eds. 2012). Miguel Poiares Maduro, We the Court: The European Court of Justice and the European Economic Constitution (1998).

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EU law. In the aftermath of the EU’s many crises (financial, institutional and democratic), we have been thinking how to teach EU law and its history as a way to take a step back and reflect on the raison d’être of the project of European integration.21 A second impetus behind EU Law Stories has been the work of the New Legal Historians that offers a different way to reflect, in an interdisciplinary manner, on what EU law scholarship has accomplished until now and how it has shaped our shared European legal culture. Among their attained goals, the New Legal Historians have demonstrated a commitment to better understand how legal change occurred in EU law through critical legal histories of understudied everyday practices. The aim is to offer new and multiple narratives to shed light on Europe’s past with implications for its future.22 The work of the legal historians has revealed a more fragmented, contested legal practice that has to be understood in the context of the continuous interchanges among Luxembourg, Brussels, the Member States’ courts, their parliaments and their fragmented public opinions.23 The work of the New Legal Historians does not emerge in a vacuum. They are in the company of other scholars who are offering textured accounts and narratives that often conflict with mainstream versions of European integration for a critical understanding of the EU’s past and future. For instance, political scientist Kalypso Nicolaïdis departs from the stifling debate surrounding a pervasive democratic deficit in the EU, and instead moves in a new direction that involves imagining the EU as neither a state nor a federation, but as a ‘demoicracy’ that supports a union of citizens and states governing jointly.24 More radically, Alexander Somek challenges the narrative of European citizenship as creating beneficial individual rights for EU citizens. Through a critique of rights, Somek shows the increasing alienation of the European bourgeois that has lost touch with its citoyen side still rooted in the home country.25 Finally Antoine Vauchez foregrounds the social world in which Euro-lawyers practice legal and non-legal skills to solidify transnational 21

22 23

24

25

See Gráinne De Burca, Europe’s Raison D’Etre in The European Union’s Shaping of the International Legal Order (Dimitry Kochenov & Fabian Amtenbrink eds., 2013). See Robert Gordon, Critical Legal Histories, 36 Stan. L. Rev. 57, 112 (1984). The first monograph in this area is by Bill Davies, Resisting the European Court of Justice: West Germany’s Confrontation with European Law, 1949–1979 (2012). This has been accompanied by special issues of historical and legal journals, including Journal of European Integration History, Vol 14 (2), 2008, Contemporary European History, Vol 21 (3), August 2012 and American University International Law Review, Vol 28 (5). See Kalypso Nicholaïdis, European Demoicracy and Its Crisis, 51 Journal of Common Market Studies 351 (2013). See Alexander Somek, Accidental Cosmopolitanism, 3 Transnational Legal Theory 371 (2012).

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networks of legal entrepreneurs committed to promote the rule of law in Europe.26 A third impetus behind EU Law Stories began by feeling self-estranged, though not for the first time,27 from the process of European integration when looking back at what we did and how we participated directly or indirectly in setting the canon of EU law as scholars and teachers of this discipline. As scholars committed to teach and write on EU law and its history from outside the United States, we realized that our American students needed more context to grasp the many layers that are part of European jurisprudence. We thought that the best way to offer more contextual background for how judges and lawyers make conscious choices about legal doctrines was to offer the multiple stories behind the case law. Inspired by the Law Stories volumes, commonly used in US law schools to complement doctrinal courses, we decided that EU law needed more of those stories, especially when taught outside its context. Law Stories aims to fill a gap between “monotonous” case reports and accounts of the vivid, colourful and complex motivations of the actors behind them. As David Luban explains, the ‘[s]tories come naturally to us, because human beings are born storytellers and story-hearers. We experience our own lives as stories unfolding through time, stories radiating out from ourselves and encompassing the people around us. We make sense of human events as complex narratives weaving together the separate stories of all their actors.’28 Influenced by sociolegal studies, this approach pervades the teaching of US doctrinal courses in a way that was never exported to the teaching of EU law. In contrast, the dominant EU law paradigms have been shaped across the Atlantic by either the Eric Stein–Joseph H. Weiler approach, which puts ‘constitutionalisation’ at the centre of European legal evolution, or the Andrew Moravcsik–Lisa Conant approach, which we call historical and empirical liberal intergovernmentalism, where political scientists dominate legal narratives. Neither of these two strains deployed sociological jurisprudence or a law-incontext approach to show the relevance of European jurisprudence and its historical and cultural context in the creation and consolidation of a European legal consciousness. While a growing number of EU law scholars are committed to map the ideologies and historical narratives that have formed 26

27

28

See Antoine Vauchez, Brokering Europe: Euro-lawyers and the Making of a Transnational Polity (2015). See David M. Trubek & Marc Galanter, Scholars in Self-Estrangement: Some Reflections on the Crisis in Law and Development in the United States, 1974 Wis. L. Rev. 1062 (1974). See David Luban, Introduction, in Legal Ethics Stories (Deborah L. Rhode & David Luban eds., 2005).

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European legal consciousness,29 we believe that EU Law Stories contributes to such an endeavour while closing the gap in the United States by offering a less formalist and more contextual narrative behind the evolution of European legal doctrines.

contextual and critical approaches in eu law The law in context approach is not new in EU legal scholarship, and it has long been the mission of the European Law Journal (ELJ) to explore EU law “in context.” In a similar way, scholars like Mauro Cappelleti, Francis Synder, Gunther Teubner and Christian Joerges, who came to European Union law from different schools’ jurisprudence, have contributed to spreading the sociolegal method in EU law. For many reasons that might have to do with distribution, style and idiosyncratic legal professional standards, we think that the sociological approach promoted by the ELJ has not fully penetrated US legal academia. In addition, law review articles and collections only offer glimpses of larger methodological projects. This edited volume is – we believe – a much needed contribution, especially for academics and students who are looking at EU law from the outside and who desire to better understand how European courts deliberate, how lawyers and other people contribute to the shaping of EU law and how in turn the legal reasoning of European jurists is influenced by societal and political elements. Even though the ELJ has produced wonderful symposia, we nonetheless believe that in this volume we can develop a more in-depth and nuanced approach aimed both at scholars and students. At the turn of the twentieth century, French and German legal scholars as well as leading US jurists such as Felix Cohen and Roscoe Pound launched a critique to classical legal thought through the elaboration and development of a sociological jurisprudence.30 Interestingly, sociological jurisprudence was both a common law and a civil law obsession that migrated to the United States later in time.31 For instance, Rudolf Von Jhering’s critique of individual sovereignty brought into question the coherence of legal reasoning, arguing that sovereignty was not a matter of deductive interpretation, but instead was 29

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See Lawyering Europe: European Law as a Transnational Social Field (Antoine Vauchez and Bruno de Witte, eds. 2011); Antoine Vauchez, Brokering Europe: EuroLawyers and the Making of a Transnational Polity (2015). See Duncan Kennedy, The Globalizations of Law and Legal Thought, in The New Law and Development: A Critical Appraisal (David Trubek & Alvaro Santos eds., 2006). See Mathias W. Reimann, The Reception of Continental Ideas in the Common Law World, 1820–1920 (1993).

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rooted in mechanical social causes that were moved by human ends.32 In addition, French jurists such as Francois Gény, Eduard Lambert and Louis Josserand developed, as a reaction to the formalist thinking of the classical era, some of the canons of sociological jurisprudence.33 According to these, law had a particular organic function such that there was no distinction between law and society; law was simply a reflection of social change according to a mirror theory of law and society.34 While sociological jurisprudence scholars are like “scientists” in that they conceive of law as responding to social forces, legal realists are “instrumentalists” in their approach to how law shapes behaviour with its own internal logic in conversation with political ideologies. In both cases, scholars agree that law is socially constructed, but their research questions lie on different premises. On the one hand, a scientist would question societal forces that are the main cause of legal change and that achieve common and organic goals for the society at large. On the other, an instrumentalist would question whether the internal logic of the law plays a strategic role in triggering legal change at the advantage of certain individuals rather than others. Many of the instrumentalist critiques of the scientists were developed on both sides of the Atlantic, starting, for example, with the Weberian disenchantment towards legal reasoning.35 In the United States, the critique by Karl Llewellyn against Roscoe Pound’s sociological jurisprudence challenged distinctions such as “is versus ought” or “facts versus ends”; rather, sociological jurisprudence tailored the best legal rules solution to a mere social purpose. Thus, no further attention was paid to how the legal rule should enjoy a certain level of abstraction to solve problems in different social contexts.36 The Law and Society movement arose as an extension of Legal Realism’s effort to criticize the dominant internal point of view, which corresponded to

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34

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See Rudolph von Jhering, The Struggle for Law (1879). See Marie Claire Bellau, Les juristes inquiets: Classicisme juridique et critique du droit au début du vingtième siècle en France, 40 Cahiers de Droit 507 (1999) (translation published in M. C. Belleau, The “Juristes Inquiets:” Legal Classicism and Criticism in Early Twentieth Century France, 2 Utah L. Rev. 379 (1997)). See William B. Edwald, Comparative Jurisprudence (II): The Logic of Legal Transplants, 43. Am. J. Comp. L. 489 (1995). Duncan Kennedy, The Disenchantment of Logically Formal Legal Rationality, or Max Weber’s Sociology in the Genealogy of the Contemporary Mode of Western Legal Thought, in Max Weber’s Economy and Society. A Critical Companion (Charles Camic, Philip S. Gorski & David M. Trubek, eds., 2005). See M.E.H. Hull, Roscoe Pound and Karl Llewellyn: Searching for an American Jurisprudence (1997) (showing a similar divergence in American Legal thought and detailing the controversy between Roscoe Pound and Karl Llewellyn).

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the project of Classical Legal Thought,37 for having produced a “heaven of legal concepts” often unrelated to the real world.38 The Law and Society perspective, like much of Legal Realism, addressed the law not as a closed system with an internal logic of its own, but rather as the product of various external influences including historical, social, economic and cultural influences, often implicating the operation and distribution of power. Legal Realists have since criticized sociological jurisprudence scholars for positing that social purpose dominates legal analysis in a formalist manner. At the turn of the century, Legal Realists criticized how sociological jurisprudence rationalized the social function of law, even for unjust and pathological social arrangements, while underestimating social conflict and social injustice.39 A similar reiteration of this critique happens when critical legal scholars (CLS) challenge the Law and Society approach for being reductionist in its failure to recognize the relative autonomy of law and at the same time for not challenging liberal government structures, not calling for a critique of rights or advancing a new utopian vision for society.40 Today, sociological jurisprudence remains an important mode of legal reasoning that continues to inspire the Law and Society literature by paying great attention to the external and societal causes of legal change rather than its internal ones.41 In line with the different critiques of Classical Legal Thought and Sociological Jurisprudence, EU Law Stories aims to shift the focus to the openendedness of the historical context and the identification of social actors involved in each case, while also recognizing the relative autonomy of the law and the virtues of legal reasoning.42 Through EU Law Stories, we maintain that the jurisprudence of the CJEU has its own internal logic that constitutes the consciousness of the judicial, legal and scholarly elites in Europe. However, each chapter highlights how such legal consciousness is embedded in a political and social context in which historical narratives,

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See Thomas C. Grey, Langdell’s Orthodoxy, 45 U. Pitt. L. Rev. 1 (1983). See Felix S. Cohen, Transcendental Nonsense and the Functional Approach, 35 Colum. L. Rev. 809 (1935). See Fernanda Nicola, Family Law Exceptionalism in Comparative Law, 58 Am. J. Comp Law 777 (2010). See Roberto M. Unger, The Critical Legal Studies Movement: Another time, a Greater Task (2015). See Lawrence Friedman, A History of American Law (3rd revised ed. 2005). Legal scholars like Gunther Teubner, Global Law without a State (1997) and Duncan Kennedy, The Globalizations of Law and Legal Thought, in The New Law and Development: A Critical Appraisal (David Trubek & Alvaro Santos eds., 2006) who addressed the relationship between societal openness and the relative autonomy of law.

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Bill Davies and Fernanda Nicola

political and economic actors, and social movements beyond the law all play crucial influences in shaping European jurisprudence.

the structure The structure of EU Law Stories remains traditional; it begins with cases on the institutions, followed by internal market, and broadens to antidiscrimination, fundamental rights, citizenship and external relations. This is because the manner in which lawyers teach the evolution of legal doctrines has not changed in the past two decades, and this black-and-white EU law canon self-reinforces itself. But while the canon shows a linear evolution of the CJEU jurisprudence, it also hides the dialectic put forward by its actors, the underlining conflicting ideologies and the fact that the Court could have come to different conclusions. EU Law Stories shows not only in color but also in 3D the evolution of European adjudication from the perspective of winners and losers and by foregrounding missed opportunities and alternative paths for the actors behind each case. The Court and its jurisprudence are not the result of a unitary process, but rather the outcome of conflicting legal reasoning, opposite political perspectives and the continuous renegotiations between legal and nonlegal actors located in different parts of the Union. In the attempt to deconstruct the notion that EU law evolves in a linear and unitary manner and offer a 3D perspective, we introduce the reader to the multiple dynamics among legal actors, the interplay between national, local and European legal elites and the different legal and political narratives that influence European jurisprudence. The first part of the volume focuses on Knowledge Production beyond the Stories in order to foreground methods of production of EU law at the Court that have been under the radar of scholars and lawyers, yet central to the establishment of an autonomous and self-standing jurisprudence in Luxembourg. The chapter by Antoine Vauchez showcases intentional methods of production of knowledge for the creation of an autonomous European jurisprudence within the Court. Vauchez explores the instruments through which European case law since the 1970s has been filtered, shaped and streamlined into one body of consistent jurisprudence. In a similar vein, Karen McAuliffe’s chapter shows the meticulous yet challenging work of the translation service at the Court. Even though seldom studied, the work of translators and their unintended consequences in EU law has been essential to create a cohesive European jurisprudence. In her chapter, Mathilde Cohen examines the bureaucratization of the pan-national European courts, and the various

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asymmetries created between the judges and the staff. Relying on a variety of in-depth interviews with current or former judges, clerks, staff, lawyers and translators at both courts, Cohen provides us with an explanation of why judges in these courts may be seen as being unduly influenced by the very bureaucracy that they perpetuate. Yet not all the chapters take the same approach or use the same methodology. In fact, archival historical work informs the chapters of legal historians such as Morten Rasmussen, William Phelan, Vera Fritz, Bill Davies, Anne Boerger and Laurent Warlouzet. These authors depart from canonical narrative through a careful reconstruction of the context at the time of the case showing the relevance of some influential judges, European and national legal elites and politicians, private actors and courts behind the outcome of some of the most influential rulings of the Court. The chapter by Morten Rasmussen provides a thick historical account of how the Court reached arguably its most revolutionary judgment in Vand Gen en Loos. Rasmussen’s chapter does not rest on a normative explanation of the constitutionalization of Europe. Rather, it depicts the constitutional practice of the court as a struggle driven by particular actors at the Court and the Commission’s Legal Services. In a similar time period, the Dairy Products case retold by William Phelan shows a significant change in the EU legal order often dismissed by mainstream approaches where the Court signified a break with International Law in regards to the enforcement of Member States’ obligations to follow the Treaty of Rome. Davies and Boerger engage in a careful historical analysis of the Les Verts ruling in order to demonstrate how the CJEU utilized the judgment as a legal mechanism through which the Court could reassert the supremacy of EU law over national law during a time of heightened Member State resistance. Through the ERTA decision, Anne McNaughton explains how the narrative surrounding this iconic judgment is more than the mainstream notion of its role in developing EU external relations law. Rather, she shows through archival sources how the ruling helped to shape EU internal structures in order to legitimate the EU’s new legal order. Through a historical analysis of the Internationale Handelsgesellschaft ruling aimed to expose the tension between the CJEU and the German Federal Constitutional Court (BVerfG), Davies reveals how this judgment was delivered at a time when the European legal community was still developing its identity, and Germany, along with other EU Member States, such as Italy, was deciding how to respond to the ambitions of the Court. Davies highlights the precarious political role of the CJEU in having to navigate the idiosyncrasies of multiple national systems, and argues that the Court

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misjudged the reception its decision would have and ultimately was forced to change its rights jurisprudence as a result. Viewed as a cautious interpretation of the Brussels Convention, Tessili is revisited by Vera Fritz. The author shows how this case has not been as effective in the scheme of EU Law as it was hoped to be. While the Court had legal reasons for not providing an activist interpretation of the Brussels Convention, Fritz provides an alternative, political approach to explaining why judges refrained from taking a bolder stance in such a controversial matter. Finally, Laurent Warlouzet uses archival sources to show that the GrundigConsten and Philip Morris judgments were used by the Commission to convince the Member States to accept the newly introduced EC Merger regulation; however, through a detailed study of the negotiations, Warlouzet reveals that without the political support of the Member States these judgments were far from sufficient to trigger a successful outcome of a protracted debate and to bridge the discrepancies between the Commission and the Court. A second group of authors provides thick descriptions that show deep knowledge of the litigants, their legal strategies and the unintended consequences of their cases. The authors’ insider knowledge of the litigation strategies and their interviews of the parties involved show the relevance of impact litigation in EU law even though by very different actors, including a Member of the European Parliament (MEP), a Chinese billionaire, a poor Colombian immigrant and a company trying to fight against a media tycoon who was also Italian prime minister. For instance, John Morijn’s and Elaine Fahey’s chapters explain the role of MEPs and their strategic litigation in achieving Community policy and how changes at the judicial level. Through personal files and interviews, newspaper articles and non-public national and European court documents, Morijn’s chapter describes the legal story of a Dutch MEP who challenged the EU’s transitional approach to borders and an area without internal frontiers. Fahey’s chapter brings to the fore the history of the European Parliament (EP) as expanding the constitutional boundaries of its own powers through litigation which made limited inroads into international relations. In contrast, in non-legal accounts of EU-US relations, Fahey retells the story of the EP as having reached the height of its empowerment in international relations in securing the annulment of the EU-US PNR Agreement in 2006. Fernanda Nicola and Evelyne Tichadou utilize behind-the-scenes stories from référendaires at the Court and the narrative of a Spanish judge to describe the duality of the Océano Grupo judgment. The authors assess the importance

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of this case in different contexts: for the Italian judicial elites in Luxemburg at the time and the growing comparative constitutional scholarship on the constitutionalization of private law, the judgment is a missed opportunity to eliminate the public-private distinction in the convoluted horizontal direct effect jurisprudence of the CJEU. Yet, in the aftermath of the financial crisis, Océano Grupo became a successful legal tool used by Spanish judges to fight back against the dramatic housing foreclosures by banks. Dimitry Kochenov and Justin Lindeboom provide a historical retelling of the famous Chen case, describing how a single case helped to solidify and concretize the EU’s approach to citizenship. They explain how impact litigation succeeded in developing a new legal order in this context, and describe the complete disconnect between the reasons behind Mrs. Chen’s actions, what actually happened and the image of the case that emerged in the media. In her chapter, Francesca Strumia reveals the tension created by the CJEU in Ruiz Zambrano between narratives about legal integration and national legal cultures. Through interviews with Zambrano’s lawyers and référendaires at the Belgian Cour Constitutionnelle, Strumia pieces together Zambrano’s story to go beyond the traditional fundamental rights arguments and explains instead the interaction between rights claims, immigration status and state discretion in EU citizenship. The chapter by Roberto Mastroianni explores in the Centro Europa 7 Srl judgment how responses from both supranational courts in the EU can still have minimal impact in addressing issues of media pluralism and freedom of expression in an individual Member State. With contextual knowledge of media pluralism in Italy, Mastroianni shows how judicial response to serious violations of EU law can still be weak in the face of local legislative control and executive power. In a similar vein, the chapter by Gábor Halmai focuses on the case of the Hungarian judges who were forced into early retirement by national legislation. Even though in the 2012 Commission vs. Hungary ruling the Court of Justice established a violation of EU law, and the Opinion of the Venice Commission of the Council of Europe called upon the Hungarian legislator to adopt provisions reinstating the judges, none of these actions were able to redress the constitutional backsliding towards an illiberal democracy. This was followed by a 2014 ruling of the European Court of Human Rights that indicated the violation of judicial independence, but which could not explicitly rule on it. By comparing the rulings of the CJEU and ECtHR against the Hungarian government, Halmai discusses the missed opportunities and limits of the European supranational adjudication with respect to the weakening of constitutional democracy in a Member State of the EU.

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In their examination of the seminal Francovich case, Antonio Bartolini and Angela Guerrieri look at just how effective this case has been at protecting individual rights in today’s European context with regards to Member State liability in EU law. Through interviews with the Francovich lawyers, the authors show the gap between the Italian academia and the judiciary in the creation of the revolutionary doctrine of State liability in the EU, while also calling into question whether this doctrine is an effective tool for consumer protection. Finally, Ioanna Tourkochoriti tells, through the Jenkins case, a story of the migration of the US doctrine of disparate impact through the persuasive lawyering of Lord Antony Lester, a US-trained lawyer who clearly influenced Advocate General Wagner’s Opinion analogizing the situation of African Americans in the United States and women in Europe, demonstrating a migration of ideas from one legal order to the other, but also a divergence in the application of the theory. Through their insider knowledge and by focusing on the role of the Commission, John Temple Lang and Gisella Gori show how the different Directorates-General (DG) beyond Legal Services can also act as strategic litigants. Temple Lang provides an insider account of how the EU’s Common Fisheries Policy, formed in the 1970s, came about through the orchestration of a single individual. With behind-the-scenes accounts of negotiations and various judgments, Temple Lang explains a situation whereby the Court, in tandem with the Commission’s Legal Services, develops a common community policy often in tension with the Member States where the other institutions fail to do so. Through the background of the Gravier judgment, Gori retells the story that appears as a “fallout” of market integration, but soon becomes pivotal to millions of EU students to gain equal access to higher education institutions all around Europe. Through a detailed recounting of the role of some Member States in tandem with the Commission, Gori’s chapter explains how a single case became the cornerstone for the EU’s Education, Training, and Youth policy for years to come. Another group of authors, through a vast array of interdisciplinary methods such as comparative law, intellectual and economic history, political science, feminist legal theory and the political economy of international trade, adds different layers and narratives to judgments that tend to appear in EU law case books merely as a legal matter. Kalypso Nicolaïdis explores the unexpected effects of the seminal Cassis de Dijon case in creating the concept of managed mutual recognition and mutual trust in EU law. Her examination of the ripple effects of the case demonstrates

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how this ruling created a legacy that moulded European politics for decades. Her chapter explores the ways that mutual recognition is currently under fire, yet remains well engrained in European legal consciousness as the EU goes through a period of uncertainty and struggle in deciding how to approach, as an entity, topics such as the refugee crisis, the European Arrest Warrant, and a transatlantic update to its single-market approach. Martin Gelter’s chapter on corporate law uses Centros and its progeny to show how these cases influenced not only the European Company Law program but also domestic corporate legislation and scholarship, and consequently affected the broader politics of corporate governance in Europe. Gelter looks at the effects and consequences of Centros in leading the EU towards a fully harmonized system of regulatory competition. Using feminist jurisprudence, Stéphanie Hennette Vauchez’s chapter on Grogan analyzes the abortion saga involving both the CJEU and the European Court of Human Rights. In doing so, Vauchez retells the story of reproductive rights in EU law by looking back at the mode of reasoning of the CJEU – one that explicitly rejects ‘morals’ as extraneous to legal reasoning and mechanically applies EU legal categories to the sensitive issue of abortion. In Peter Lindseth’s chapter on the well-known Viking case, he retells the story not through the classic lenses of social dumping in the aftermath of the Eastern enlargement, but rather by reflecting on the semantic gap between the ECJ’s emphasis on balancing “rights” and the Commission’s economic and policy perspective on regional development. The chapter highlights the challenge of “convergence”, or the effort to close the wealth gap between the richest and poorest Member States and regions, measured in terms of per capita GDP. Daniela Caruso and Joanna Geneve’s chapter on Melki tells the story of the colonial and post-colonial relationship between Algeria, France and the EU. By focusing on a famous preliminary reference from Paris to Luxembourg, the authors provide a welcomed occasion to revisit the important but little known story of the transformation of French-Algerian relations as a consequence of European legal integration. In a comparison of US and EU legal and economic history through the lenses of political scientists, Michelle Egan explores just how important historical context is for understanding the creation and development of legal theory and order. Egan’s chapter helps to develop the idea that historical and political context are necessary for really understanding the full depth of the law, the development of a legal consciousness and its effects and consequences in our daily lives.

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The concluding contribution by Mark Pollack provides us with an elegant synthesis of the lessons to be drawn from the stories recounted in our volume. Pollack’s chapter emphasizes that providing the story behind the case is not just about adding some much-needed vivacity to the study of EU law, but also allows us to understand the breadth and diversity of the lawyering strategies, as well as the tactics and desired outcomes of the people and institutions that engage with the Luxembourg court.

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part i

Manufacturing EU Law Stories

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2 EU Law Classics in the Making Methodological Notes on Grands arrêts at the European Court of Justice

antoine vauchez

To a large extent, EU law is a history made of many judicial stories. It is hardly possible to conceive of a class, a seminar, not to mention a textbook, in EU law that would not draw extensively on the rather stable list of cases that are purported to have established this body of law into an autonomous discipline with a limited set of core constitutive principles.1 The string of cases that forms the Pantheon of ECJ landmark decisions reads like a success story of a Court, the European Court of Justice (ECJ), that progressively secured its now firmly established authority over the law of the Union. And yet, after decades of exegesis, we still know surprisingly little about these grands arrêts that “shaped” EU law as we know it. As a result of the continuous efforts to summarize, aggregate, index, and order them, Europe’s founding decisions have turned into a rather simplified set of principles: Van Gend en Loos equals “direct effect,” Costa means “supremacy,” Defrennes is “non-discrimination,” Cassis de Dijon “mutual recognition,” thereby forming an uninterrupted and consistent chain of cases that map out EU legal landscape. While these equivalences may prove useful as a memo board for teaching purposes, they have often led away from a thick description of these cases as political, legal, and social “events” that are fully part of the history of the European Union. With few remarkable exceptions,2 most studies in law or political science have

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I am grateful to the editors of this volume, to Rachna Kapur and to the students of American University in Washington for their useful comments on an earlier version of this essay. In particular: Eric Stein, “The Making of a Transnational Constitution,” American Journal of International Law, 75 (1), 1981, pp. 1–27; Karen Alter and Sophie Meunier, “The New Constitutional Politics of Europe: European Integration and the Pathbreaking Cassis de Dijon Decision,” Comparative Political Studies, 26 (4), 1994, pp. 535–561; Kalipso Nikolaidis, “Kir Forever? The Journey of a Political Scientist in the Landscape of Recognition,” in Loïc Azoulai and Miguel Maduro, eds., The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty, London: Hart Publishing, 2010.

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actually converged in viewing these landmark cases as sorts of black boxes whose established meaning was somehow taken as a “given” and as a starting point for the analysis. While the dominant stream of legal scholarship has built sophisticated yet ahistorical and apolitical accounts of the progressive unfolding of ECJ jurisprudence, political scientists have accumulated large-n databases of hundreds of ECJ cases in search for the prevailing (State or transnational) interests that ultimately structured judicial outcomes. In both cases, what actually happened “around” the case has little importance, since the judicial outcome was ultimately determined either by the judges (as the “authentic interpreter” of the law) or by external (State or EU) interests (as the last instance determinant of the law). Research-wise, this means that there has been very few empirical inquiries that broke down cases into historical contexts, social constellation of actors, competing legal and political strategies, etc.3 This chapter suggests that it is time to retrieve “cases” as historically and socially complex “moments” that cannot be reduced to mere steps in a developmentalist narrative, but need to be taken as an entry point into the deep entanglement between law, society, and politics in the EU context.4 Yet, over the past years, there has been a growing sense of frustration over this judicial vulgate. With its parti pris of combining views coming from different scholars, disciplines, and actors, the volume edited by Loïc Azoulai and Miguel Maduro, Classics of EU Law, confirmed that there was room for a promising research strand that would look at landmark cases, not just for what they have become after decades of celebration, but for what they have been at the time.5 Despite the difficulties of accessing archival documents from the European Court of Justice,6 sociologists and historians have attempted to connect the

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But see recent work undertaken under the umbrella of iCourts: Mikael Madsen and U. Sadl “Becoming European (Legally): Unpacking the Self-Portrait of the EU Legal Order in the PreAccession Case-Law Dossiers,” Columbia Journal of European Law, forthcoming; Urska Sadl, “What Is a Leading Case in EU Law? An Empirical Analysis,” European Law Journal, 40 (1), 2015, pp. 15–34; and Amalie Friese’s ongoing Ph.D at the University of Copenhagen and the Université Paris 1-Sorbonne on the fabric of nondiscrimination case law in both European courts; or Billy Davies, Resisting the European Court of Justice: West Germany’s Confrontation with European Law 1949–1979, Cambridge and New York: Cambridge University Press, 2012. On this entanglement, see Antoine Vauchez, Brokering Europe: Euro-Lawyers and the Making of a Transnational Polity, Cambridge: Cambridge University Press, 2015. Loïc Azoulai and Miguel Maduro, eds., The Past and Future of EU Law, op. cit. See also the recent editorial on “The Critical Turn in EU Legal Studies,” Common Market Law Review, 52, 2015, pp. 881–888; and Jean-Paul Jacqué, “Les ‘communautaristes’ sous le regard des politologues,” Revue trimestrielle de droit européen, 4, 2012, pp. 737–741. For a long time, the ECJ has not given any archives to the Historical Archives of the European Union in Florence. Recently, the HAEU has signed a deposit agreement with the ECJ for its historical archives to be transferred: it is still unclear what types of documents will be

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micro-history of the courtroom dynamics to the broader political and legal dynamics of EU polity-building.7 This surge of interest in ECJ cases has developed even more in the context of the recent fiftieth anniversary of Van Gend en Loos and Costa that resulted in a variety of publications,8 conferences, and seminars.9 It is not the least value of this scholarly turn that it allows to envision a renewed interdisciplinary dialogue across disciplines after years when the gap across methodologies and research puzzles had grown wider and wider.10 By opening the judicial black box and following the social, political, and intellectual ramifications of legal practice, the thick description of cases has a potential to bridge in concreto disciplinary research traditions and insights. The present volume is testimony to the promises of this new terrain of study for EU law. Yet, as we collectively engage in this renewed research agenda, and as the European Court of Justice is (finally) opening part of its archives, it might useful to think twice about possible unseen intellectual implicits and methodological implications of a case-centered narrative of EU law’s history.

searching (for) cases While it might seem obvious to study cases when studying the law, this is without trappings if one does not question beforehand which cases are brought to light.11 As aptly shown by French legal sociologist Evelyne

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transmitted. On the many questions raised by judicial archives, see an interesting article in the New Yorker on the Supreme Court’s papers: Jill Lepore, “The Supreme Paper Caper,” New Yorker, December 1, 2014. On Van Gend en Loos, see Antoine Vauchez, “Integration through law: Contribution to a socio-history of EU common sense,” Working paper, European University Institute, Robert Schuman Center, 2008/10; Billy Davies, Resisting the European Court of Justice, op. cit.; Morten Rasmussen, “Revolutionizing European Law: A History of the Van Gend en Loos Judgment,” International Journal of Constitutional Law, 12 (1), 2014, pp. 136–163; and Antoine Vauchez, “The Transnational Politics of Jurisprudence: Van Gend en Loos and the Making of EU Polity,” European Law Journal, 16 (1), 2010, pp. 1–28. See inter alia, on Van Gend en Loos, see the special issue by European Journal of Constitutional Law, 12 (1), 2014; on Costa, see the issue by the Revue de l’Union européenne, August 2015. For example, Joseph Weiler has hosted a yearly seminar ever since his return to the European University Institute devoted to the study of Court’s cases (e.g., in 2014–2015: “When the Court gets it wrong. Reviewing the fundamentally wrong cases from the ECJ”). See Christian Joerges, “Taking the Law Seriously: On Political Science and the Role of Law in the Process of European Integration,” European Law Journal, 2 (2), 1996, pp. 105–135; Grainne de Búrca, “Rethinking Law in Neofunctionalist Theory,” Journal of European Public Policy, 12 (2), 2005, pp. 310–336; and Jo Shaw, “The European Union: Discipline Building Meets Polity Building,” in P. Cane and M. Tushnet, eds., Oxford Handbook of Legal Studies, Oxford: Oxford University Press, 2003, pp. 325–352. Quite tellingly, critical traditions of law, such as in Italy the so-called “giurisprudenza alternativa” quite diffused among left-wing lawyers in the 1970s, made a point of selecting non-

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Serverin,12 “important” cases rarely surface naturally as the outcome of a spontaneous process of decantation. They are most often selected by courts and their legal community of reference through a variety of techniques and procedures that skim off the large amount of decisions delivered every year.13 Recent methodological trends that investigate citations’ networks allow now to show how some decisions become “hubs” and acquire “authority scores,”14 while others are progressively sidelined.15 What is taken as “raw (judicial) material” is therefore the endpoint of a long filtering process. One may end up studying only the “survivors” of this selection process, taking them as a proxy for what the case law actually is (leaving behind the unselected cases as “outliers” or “anomalies”). By “sampling on the dependent variable,” as political scientists would say, one misses the whole process that turns a multitude of cases into a handful of emblematic grands arrêts. Of course, things would be easier if there was such a thing as a common understanding of what “landmark cases” refer to in fact. Alas, it proves impossible to craft an ontological definition of what a landmark case is (as opposed to non-landmark cases). Just like there is no ex ante definition of what a “classic” is in art or literature, there is no general and transhistorical notion of the intrinsic properties of a grand arrêt that does not eventually end up with tautological definitions of “greatness.” As a matter of fact, some cases promoting “great principles,” like that of Commission EEC v. Luxembourg and Belgium of 13 November 1964 (the “dairy products” case), which stated quite bluntly an unprecedented breach to the reciprocity principle in the case of European treaties, have been somehow forgotten in the course of history (forgotten landmark).16 Symmetrically, other cases that had a “foundational

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canonized cases from lower-rank jurisdictions in domains such as labor law, with a view to reverse, to some degree, the pyramid of legitimacy within the legal field; on these attempts, see Antoine Vauchez, L’institution judiciaire remotivée. Le processus d’institutionnalisation d’une ‘nouvelle justice’ en Italie (1960–2004), LGDJ, 2005. Evelyne Serverin, De la jurisprudence en droit privé. Théorie d’une pratique, Lyon: Presses universitaires de Lyon, 1985. Antoine Vauchez, “Transnational Communities of Lawyers before International Courts,” in Karen Alter and Cesare Romano, eds., Handbook of International Adjudication, Oxford: Oxford University Press, 2013. J. H. Fowler et al., “Network Analysis and the Law: Measuring the Legal Importance of Supreme Court Precedents,” Political Analysis, 2007, 15, p. 324. Interestingly, the decisions that have the highest authority score are not always the ones that are mostly taught in law schools. Yonathan Lupu and Erik Voeten, “Precedent in International Courts: A Network Analysis of Case Citations by the European Court of Human Rights,” British Journal of Political Science, 42 (2), 2013, pp. 413–439. On this, see William Phelan, Supremacy, direct effect and “dairy products” in the early history of European law, EUI Working paper, Law Department, 2014/11.

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potential” because of their antecedence in affirming “great” legal principles have remained ignored: interestingly, a case like Humblet v. Etat belge (1960) never made it as a “landmark case” of the Court, although it was arguably the first one to state the principle of supremacy four years ahead of Costa (ignored landmarks).17 Only a historical inquiry into the broad political and legal context of the case would explain why it was not pinpointed as such at the time. Last but not least, legal greatness cannot even be defined by the political or economic relevance, as many cases that were politically “famous” or “infamous” at one point of history (often because of conflicts between the ECJ and the Member States) never made it to the Pantheon of EU law, often because they were simply redundant in terms of legal principles. With the lack of robust criteria for singling out grands arrêts, some may argue that the “I-know-it-when-I-see-it” test could apply. Yet, landmark cases often lack the “grandeur,” the stylistic clarity, and the argumentation audacity that we may expect from them with the hindsight: when reading landmark cases, it often appears that the legal solution in the case is limited to one specific situation and could not necessarily be reproduced or extended much beyond the specific circumstances.18 The legal lexicon used often seems still rather unsettled and changing,19 and one can usually identify as much continuity as there is rupture in the text itself.20 For example, it is hard to find traces of the “constitutional foundations” of the EU that the ECJ identified in Van Gend en Loos when it celebrated its fiftieth anniversary. More often than not, it is only with later decisions that the “spirit” of these cases is eventually manufactured in a clear and stylized manner, leaving aside the many ambiguities and the various possible futures that featured the initial decision.21 This difficulty is confirmed by the fact that the list of landmark cases is subject to some degree of change and disagreement over time, depending on the textbook, the institution, etc. While there are certainly some passages obligés, scholars, judges, or jurisconsultes do not necessarily value the

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CJCE, 16 décembre 1960, Humblet v. État belge, aff. 6/60, Rec., p. 1125, n 7. This is certainly related to how courts’ prudentia in peddling new legal solutions while at the same time avoiding to appear as engaging judge-law making. In the case of Van Gend en Loos, both judges and legal scholars still had a variety of words to label the principle affirmed in the case: effets immédiats, effet direct, self-executing, etc., and it is only later that the notion of “direct effect” emerged as canonical. On the many continuities in the Costa case, see the seminal paper by Bruno de Witte, “Retour à Costa. La primauté du droit communautaire à la lumière du droit international,” Revue trimestrielle de droit européen, 20(3), 1984, pp. 425–454. On this process, see Antoine Vauchez, “The Transnational Politics of Jurisprudence,” op. cit.

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same cases, identify the same turning points, and formalize the same string of cases out of the 9,500 judgments issued by the ECJ over its sixty years of existence. It is not the place here to make a full historical survey of these changes. This would require one to dig into the history of EU law textbooks and track their successive editions as they are among the main ordering devices for the Court’s case law. Although this remains pretty much a research program, it may be interesting to mention some of the early formalizations, such as that of ECJ judge and law professor Pescatore in his famous 1979 article on the “jurisprudential acquis,” who selected only four “constitutional” cases: “everything starts with four cases: Commission vs. Luxembourg et Belgium (Pain d’Epice), Van Gend en Loos, Costa vs. ENEL, and Consten Grundig.”22 The Court itself has suggested its own string of cases when it translated a selection of cases for the new Member States from Eastern and Central Europe, fifty-seven decisions published and translated on its website that make up its “historical case-law” starting with Van Gend en Loos, followed by Plaumann, Costa, Grundig, AETR, and others.23 More recently, scholars Loïc Azoulai and Miguel Maduro edited a volume on The Classics of EU Law that identified a select group of founding cases starting with Van Gend en Loos (1963), Costa (1964), International Handelsgesellschaft (1970), ERTA (1971), Defrennes I (1971), Dassonville (1974), and Cassis de Dijon, each one of them prompting a number of sequels: ERTA, Les Verts, Francovich, Sommenthal, and Bosman, also depending on the various branches of EU law (institutional matters, free movement of goods, competion policy, etc. As the list of landmark cases proves changing, highly contingent historically, and often reversible, there is no possibility of crafting a generalizable concept of what a landmark case ought to look like.

landmark cases as a genre Although there is no objective and ahistorical definition of legal greatness, landmark cases can still be recognized sociologically, i.e., not so much for what they are in nature, but for how they are constructed and narrated in situation. Hereafter, I describe two essential features of “judicial classics.”

22

23

Pierre Pescatore, “Aspects judiciaires de l’acquis judiciaire,” Revue trimestrielle de droit européen, 1981, pp. 617–651. For an interested study of these fifty-seven cases, see Mikael Madsen, U. Sadl, “Becoming European (Legally),” art. cit.

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The Matthew Effect The first specific feature of landmark cases is that they are granted a foundational role in autonomizing new branches of law. Just like the “case-method” famously invented in the late nineteenth century at Harvard Law School is the (oft-mythicized) starting point of US legal academia,24 the formation of French administrative law is grounded in legal scholars’ systematization of what was, up to then, essentially a series of important cases from the Conseil d’Etat into one consistent body of principes généraux du droit. The existence of landmark cases are somehow proof to the relative autonomy of the law from its initial political creators, be they “constituants,” treaty-makers, or legislators. Famously, the rebirth of French constitutional law as a legitimate and authentically legal domain is in large part due to the 1971 symbolic coup of the Conseil constitutionnel claiming for itself the possibility to review legislation in light of the 1789 Déclaration des droits de l’homme et du citoyen and of the 1946 Préambule, thereby competing with what had been so far a political stronghold: the interpretation of the Constitution.25 Similarly, the Van Gend en Loos and Costa decisions have been integral for the autonomization of the ECJ from the High contracting parties that created it few years earlier in the founding treaties.26 As foundational myths for the different branches of the law, landmark cases tend to obscure the rest of the case law. What Robert Merton famously coined as the “Matthew effect”27 – that is, the propensity of early scientific discoveries to reduce all subsequent innovations to the role of mere specifications or ramifications of the initial finding – can be tracked in case law as well. Post hoc, ergo propter hoc aptly summarizes this tendency to turn new cases into late developments of the initial breakthrough. This “Matthew effect” is particularly visible in the case of ECJ jurisprudence that has been shaped consistently as a progressive jurisprudence, which excludes any substantial 24

25

26

27

Alfred Konefski and John Schledgel, “Mirror, Mirror on the Wall: Histories of American Law Schools,” Harvard Law Review, 1982, pp. 833–851. Bastien François, “Le Conseil constitutionnel et la Ve République. Réflexions sur l’émergence et les effets du contrôle de constitutionnalité en France,” Revue française de science politique, 47 (3–4), 1997, pp. 377–404; and Alec Stone, The Birth of Judicial Politics, Oxford : Oxford University Press, 1992. Antoine Vauchez, “Keeping the Dream Alive: The European Court of Justice and the Social Fabric of Integrationist Jurisprudence,” European Political Science Review, 2012, pp. 51–71. The notion was named by Robert Merton after a verset of the biblical Gospel of Matthew that says: “For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken even that which he hath.” Cf. Robert Merton, “ The Matthew Effect,” Science, 159, 1968, p. 56–63.

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“revirement de jurisprudence.”28 This sense of progressivity was certainly very strong among the first generations of Euro-lawyers.29 Suffice it to quote the introduction to the first edition of the Grands arrêts de la jurisprudence communautaire (1974), the little brother to the prestigious Grands arrêts de la jurisprudence administrative,30 co-edited by Roger-Michel Chevallier, a long-time clerk of former ECJ president and long-time judge, Robert Lecourt: “Even on the most important matters, the ECJ jurisprudence seems more like a progressive construction, built by touches successives from case to case through which the judge has been able to specify, from detail to detail, most of its doctrine.”31 This progressive narrative of EU case law therefore views subsequent decisions as the mere logical and incremental unfolding that goes from the more general statements of the revolutionary years to the many sector-specific ramifications of the present days. In a sort of retrospective telelology, one narrates the far-reaching consequences of VGL to a point that has become almost impossible to imagine “what EU law would have been without the decisions of 1963 and 1964.”32 EU Law’s Conception of Wealth and Worth What can also help identify “landmark cases” is the particular way in which these cases are narrated. In other words, they can also be identified as a particular genre of legal commentary and a rather stable discursive formation.33 It might be useful to compare the genre of “legal greatness” to that of artistic greatness. In an interesting study on the “glory of Van Gogh,”34 28

29

30

31

32

33

34

See Rostane Mehdi, “Le revirement jurisprudentiel en droit communautaire,” dans L’intégration européenne au 21e siècle. Mélanges en hommage à Jacques Bourrinet. Paris: La Documentation française, 2004, pp. 113–136. Yet it is still very strong today: cf. Daniel Kelemen and Susan Schmidt, “The European Court of Justice and Legal Integration: a Perpetual Momentum?” Journal of European Public Policy, 19 (1), 2012, pp. 1–7. First published in the 1950s, the Grands Arrêts de la Jurisprudence Administrative, better known by generations of law students in France as the GAJA, is the legal commentary coproduced by administrative judges and law professors of the most influential cases of the Conseil d’Etat ever since its creation. Jean Boulouis et Roger-Michel Chevallier, Les grands arrêts de la jurisprudence de la Cour de justice des Communautés européennes, Dalloz, 1974, p. xi. Robert Lecourt, “Qu’eut été le droit des Communautés sans les arrêts de 1963 et 1964?” Mélanges Jean Boulouis. L’Europe et le droit, Paris, Dalloz, 1991, pp. 349–361, p. 351. On modes of narrating the law, see also Renata Uitz, Constitutions, Courts and History: Historical Narratives in Constitutional Adjudication, Budapest: Central European University Press, 2005. Nathalie Heinich, The Glory of Van Gogh: An Anthropology of Admiration, Princeton: Princeton University Press, 1996.

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Nathalie Hienich shows how the narration of the Dutch painter as “artiste maudit” (lost, forgotten, half-mad genius) contributed to define a new model of wealth and worth for artists.35 Landmark cases are a particular genre too that can be traced inter alia in the rich commemorative material produced by the European Court of Justice, from the fifteenth anniversary of the creation of the court in 1968 up to the recent celebration of the sixtieth anniversary of Van Gend en Loos in Luxembourg. In EU law, just like in the Western legal tradition in general,36 the most established model of greatness relates to autonomy and ahistoricity of the law. This can be traced in three distinctive elements that are considered when it comes to describe how grands arrêts differ from the vulgum pecus of daily case law. First of all, landmark cases tend to be presented as turning points that cut the court off from its prior legal and institutional trajectory, thereby marking a new beginning. This idea of historical bifurcation goes along with a certain ex post romanticisation of cases’ dramatic and agonistic dynamics that points at the bravery of plaintiffs, the foresight of lawyers, and the audacity of judges. The verdict issued by the court appears like a judicial fiat, creating by the very virtue of its delivering a fresh starting point and a new interpretative path.37 Second, landmark cases are presented as the product of an isolated author, thereby viewing “the court” as a sort of self-contained and self-sufficient arena. Third, they are viewed as self-explanatory and self-evident texts whose meaning is just waiting to be unearthed on future judicial occasions. In other words, landmark cases do not merely come to us as raw and genuine judicial material. Typically, they are embedded in a dense web of meanings regarding law’s most relevant actors (e.g., the European Court of Justice), most important moments (e.g., Van Gend en Loos), and most meaningful principles (e.g., “direct effect” and “supremacy”). These rich interpretative stata obscure our understanding of the case as it emerged historically. Worse, they somehow tend to pre-define the research puzzles that we are able to raise. In this light, studying legal change may become merely a matter of identifying the “smoking guns” or “swing judges” behind law’s turning points.38 In the case of EU law, such a positivistic legal history leads to a

35

36

37

38

On the various types of social worth, see Luc Boltanski and Laurent Thévenot, On Justification: Economies of Worth, Princeton: Princeton University Press, 2006 (1991). On the properties of the legal field, see Pierre Bourdieu, “The Field of Law: Toward of Sociology of the Juridical Field,” Hastings Law Journal, 38, 1987, pp. 805–853. Alec Stone, “The Juridical Coup d’État and the Problem of Authority, ” German Law Review, 8 (10), 2007, pp. 915–928. This search for the factor or the person that changed the course of history has been famously mocked by US scholars as “ breakfast jurisprudence ” (where landmark decisions are ultimately

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search for who made the majority in the Van Gend en Loos decision (which was famously a tight decision). Against this decisionist historiography, it should be said that the meaning of a “case” is never settled simply by virtue of a judge’s decision. The delivering of a “verdict” does not close down legal and political battles that existed before their issuing; rather, it partly redirects them towards interpretative battles over the nature, meaning, and scope of the said decision. Far from being transparent and self-explanatory, cases form a terrain of contention and trigger a collective, and at times conflictual, process of meaning-building that takes place in a variety of arenas from courts to learned societies, law schools, or EU institutions. The research question therefore changes: rather than considering cases as “events,” one should therefore consider them as a continuous process and study how specific decisions actually survived and were transformed into landmark cases with long-lasting jurisprudential value.

from caseload to case law: the politics of jurisprudence To fully grasp this transformative process, one therefore needs to suspend the taken-for-granted meaning of landmark cases and track the multifaceted process of selection, aggregation, and canonization. For that matter, we need a sociological understanding of “jurisprudence,” not just as the result of a spontaneous process of decantation, but rather as a social fabric whereby a particular vision of case law prevails and is maintained over time.

Investigating Hermeneutic Spaces This process is best grasped through the concept of “hermeneutic space” as it makes justice of the variety of actors and spaces interested in the case as well as of the types of discourses produced around one particular case.39 This notion allows to build a research program that engages in a thick description not just of the cases’ legal interactions but also of the multifaceted ways through which jurisprudence is crafted and consolidated. That is what I have being trying to do when studying Van Gend en Loos – tracing the collective yet uncoordinated process that elevated a specific case to the status of radical break from

39

a function of what judges had over breakfast), leading to endless speculations about what is really “dans le ventre des juges” that determined one particular judicial outcome. Cf. Willard King, “A Breakfast Theory of Jurisprudence,” Dicta, 14, 1936–1937, pp. 143–147. The notion was initially developed by Nathalie Heinich for the study of Van Gogh postmortem glory: Nathalie Heinich, The Glory of Van Gogh, op. cit.

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international law’s tradition and starting point of a new legal order.40 This is what Julie Bailleux did when pointing out the entrepreneurial role of Michel Gaudet, director of the Commission’s Legal service from 1952 to 1969, in the formation of ECJ jurisprudence.41 This is also what Jens Arnoltz did recently, mapping out a variety of trade unionists, legal scholars, and politicians that got involved in the heated political and scholarly debate over the nature of Europe, turning the Viking, Laval, and Rueffert cases into one “Laval quartet.”42 And this is what Emmanuel Rosas is currently doing in his PhD on the formation of Brussels’ nondiscrimination milieu and the making of the Defresne case.43 While it may be tempting for the researcher to establish a priori boundaries where the “hermeneutic space” of cases starts and ends, it may prove more heuristic to just “follow the actors” as they move across sectors and levels and identify l’espace social total in which a case has been debated and framed. Instead of looking at cases as one single and isolated incident, separated from social context, this new research approach allows one to grasp the thick political and legal layers that make up landmark cases via legal commentaries, academic conferences, parliamentary hearings, and public debates. In line with this stream of research, there is no reason to privilege official sources of law; all sorts of material including sources to which legal scholars rarely turn to like eulogies, Festschriften, but also scholarly conference proceedings, case commentaries, parliamentary debates, parties’ submissions, and memos, can be used to establish a web of references to the particular case under study. This means that apocryphal interpretations should be considered with equal interest as the canonized ones. Similarly, un-“authentic interpreters” (politicians, high civil servants, litigants, etc.) are to be considered as they are often more influential in meaning-making processes than the courts themselves are, particularly in the initial context of the Rome treaties whereby there was no clear idea as to whom was to become the authentic interpreter of the founding

40

41

42

43

Antoine Vauchez, “The Transnational Politics of Jurisprudence. Van Gend en Loos and the Making of EU Polity,” European Law Journal, 16 (1), 2010, pp. 1–28. Julie Bailleux, “ Michel Gaudet a law entrepreneur: the role of the legal service of the European executives in the invention of EC Law ”, Common Market Law Review, 2013, Vol. 50, No. 2, p. 359–367. For very rich sociological perspective on this type, see Jens Arnholtz, A ‘legal revolution’ in the European field of posting? Narratives of uncertainty, politics and extraordinary events, Ph.D. in sociology, Univ. of Copenhagen, Sept. 2013. Emmanuel Rosas, Enjeux et formes des lutte de classement entre les causes au sein du champ transnational de l’anti-discrimination et pour l’égalité à Bruxelles, Ph.D. candidate, Université Paris 1-Sorbonne, work in progress.

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treaties (heads of state, national supreme courts, the ECJ, the Commission through its legal service, etc.). Drawing on extensive bibliographical and archival research, one can hope to identify individual or collective entrepreneurs as they produce new rhetorical formulations and seize “windows of opportunities” to forge epistemic alliances around specific cases, thereby bringing together groups of actors (civil servants, diplomats, legal advisors, scholars, etc.) with disparate interests.44 Such fine-grained qualitative analysis can allow one to grasp the social process through which some exegesis ultimately prevailed – without, however, ignoring the ones that were at some point considered and were ultimately shelved. A Plea for “Thick Description” This research program in the making of jurisprudence should also take into consideration the instruments, legal and non-legal, that shape cases into lines of cases and ultimately into a consolidated jurisprudence. Too often we concentrate on legal ideas, as if they were free-floating, but underestimate the constitutive role of tools that may turn legal theories into standard operating procedures. One could certainly argue that there is no such thing as a “jurisprudence” without equipment that can help the court maintain a stable set of legal principles despite the ever increasing and heterogeneous caseload. At the European Court of Justice, the issue of maintaining “jurisprudence” did not come up as critical until the 1970s when the enlargement to the United Kingdom and the departure of most judges and most référendaires from the “revolutionary period” ignited the fear of a dismantling of the judicial acquis.45 In reaction to these centrifugal tendencies, a number of instruments were crafted to select, compile, and polish ECJ case law (via textbooks, judicial compendia or databases, Recueils, thesaurus, statistical inventories, etc.). From the scholarly point of view, these volumes may be seen as modest pieces, yet they prove to be critical devices in aggregating the several hundreds of decisions produced by the ECJ each year into one consistent legal tradition. In 1974, the first edition of the Grands arrêts de la Cour de justice des 44

45

On the field of EU law, see Antoine Vauchez and Bruno de Witte, eds., Lawyering Europe: European Law as a Transnational Social Field, Oxford: Hart Publishing, 2013. Judges such as Monaco, Trabucchi, and former presidents Andreas Donner and Robert Lecourt left, respectively, in 1976 and 1980. Their référendaires Gori, Neri, and Chevallier had also left the court soon after. A new period opens at the Court featured by an increasing turnover of judges and référendaires, after an initial period in which most judges and référendaires stayed for one to two decades (Lecourt: 17 ans, Donner, idem, etc.).

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Communautés européennes was published, co-authored by ECJ référendaire Roger-Michel Chevallier and EU law professor Jean Boulouis, and many other similar volumes later emerged in other Community languages, often co-produced by ECJ lawyers.46 Within the Court, a number of writing devices were edited that pushed for a normalization. A special mention should be made here to Pierre Pescatore who in 1976 wrote a highly important Judicial Compendia, an internal document of the Court that has been made public only very recently.47 The book is intended as a guide to define the Court’s judicial style of writing and arguing (preventing “défauts de fabrication” and “dispersion sémantique”). More importantly, he calls for a rational building of “jurisprudence,” giving a list of “relevant articles” of the EEC treaty to be quoted when it comes to building “general principles,” inciting référendaires to use a number of “formules types”48 and inviting judges to frame their new decisions within the framework of the formerly established principles. Particularly interesting is his insistence on the importance creating “chains of decisions”: “When a decision confirms, specifies or develops a previous jurisprudence, we recommend to always explicitly quote the previous decisions to which it refers in order to avoid any rupture in the jurisprudential chain.”49 Beyond these compendia, we still need to understand how the judicial decision-making process became increasingly centralized. From the late 1970s, greffiers, ECJ presidents, and a small number of senior judges have felt compelled to address the increasing diversity of the Court, in particular in preparation of the periods of enlargement that have raised great fears over the potential weakening of the institution’s capacity to maintain both the quality of its decisions and the consistency of its jurisprudence. New instruments have been conceived within the court, such as internal standard operating procedures, legal compendia, and decisions’ databases that help connect the Court with the keywords of the Celex databases. New structures have been created such as the Cellule des lecteurs d’arrêts, whose official role is precisely to polish and discipline the increasing heterogeneity within the court and among

46

47

48

49

In 2012, ECJ judge Tizzano published: I grands arrêts della giurisprudenza europea, Turin, Giappecchelli. Pierre Pescatore, Vade-mecum. Recueil de formules et de conseils pratiques à l’usage des rédacteurs d’arrêts, Bruxelles, Bruylant, 2007. For example, Pierre Pescatore indicates the 1974 Dassonville formula on “trade measures or trading rules enacted by the Member States which are capable of hindering, directly or indirectly, actually or potentially, into community trade as measures having and effect equivalent to quantitative restrictions” as I quote – the “clé passé-partout” for judges in their decisions. Ibid.

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judges. One should also mention the documents produced by the translation directorate whose role has increased dramatically over the past two decades and contributes in turn to the stabilization of the Court’s lexicon.50 On the whole, “case law” cannot be taken as a given, even less as a “primary source”; it is not spontaneously formed and transformed into a “body of law” through a self-sustaining process of accretion and continuous purification (decantation). EU jurisprudence is not just a surface phenomenon, or the outcome of a natural and logical accumulation of decisions over time: it is the product of a whole range of people and tools specialized into publicizing, ordering, filing, archiving, and processing “EU case law,” thereby delineating a transnational politics of judicial law-making that is still waiting for systematic exploration.

50

Cf. Karen McAuliffe’s chapter in this volume.

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3 Behind the Scenes at the Court Of Justice Drafting EU Law Stories

karen mcauliffe

introduction This chapter presents a ‘behind the scenes’ look at the Court of Justice of the European Union (CJEU) with the aim of uncovering the functioning of that Court in a way that is not often considered in standard EU legal narratives. Providing a better understanding of the inner workings of the environment in which a significant part of EU law is created allows scholars across disciplines to work towards delimiting the inconsistencies that inevitably arise in the multilingual EU legal system. It is not difficult to see why the CJEU interests scholars across many disciplines. Through its case law it has crafted an innovative constitutional architecture and system of regulation and has been a major driver of the European integration process.1 Legal and political science scholars, in particular, have written a great deal about the CJEU.2 Historically, commentators have suggested that the CJEU, left to its own devices and ‘tucked away in the fairytale Grand Duchy of Luxembourg’,3 was able to implement its own EU integration agenda, largely flying under the political radar of the Member States. More recently, however, a new literature has emerged, which challenges the notion of ‘integration by stealth’, showing that national governments were not only aware of this integration process but actually (at least in the case of Germany)4 were broadly facilitative of it. Those more recent studies, and the contributions in the present volume, do something that the preceding legal and political science literatures have not tended to do: they look at what is happening behind the scenes of the CJEU’s case law. These EU law stories bring a new dimension to our understanding of individual cases and to the narrative of EU law more generally. 1

Cf. Harmsen and McAuliffe (2015).

2

Ibid

3

Stein (1981).

4

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Davies (2012).

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Karen McAuliffe

Most of the literature on the CJEU focuses on its judgments: on what those judgments say and what impact they may have on EU policy and the EU legal order. Students and commentators alike consider the meaning and implications of the words chosen by the Court in those judgments. Furthermore, political science and legal scholars have generally treated the CJEU as a unitary body.5 This is in a large part due to necessity, since the deliberations of the CJEU are secret and no dissenting opinions are published. As Pollack states, “Faced with such a closed court, both legal and political science scholars have made a virtue of necessity, treating the Court as a single body, ignoring the diversity of backgrounds and views of its judges, and imputing preferences to the Court as a whole.”6 However, while the Court may be obliged to express itself with one voice, it is of course staffed by individuals from Member States with diverse social and educational backgrounds, languages, and cultures. The case law that it produces is not simply drafted by majestic figures in long amaranth robes,7 alone in their secret deliberations, but is created through a unique multilayered and multilingual process. This essay tells the story of that process and the actors involved in it. By understanding the many stages of and people involved in that process we can develop a more nuanced understanding of the CJEU’s jurisprudence, and of EU law more generally.

methodology This chapter is based on fieldwork research, interviews and participant observation carried out at the CJEU between 2002 and 2013. The interview sample consisted of seventy-eight interviews in total (fifty-six lawyer-linguists, five judges, three advocates general and fourteen référendaires).8 Participant observation involved observing the interactions among lawyer-linguists and between those lawyer-linguists and members of the Court and their référendaires,9 both in professional contexts such as meetings, seminars etc. and more informal contexts such as Court social functions, coffee breaks, lunchtimes etc.; engaging to some extent in those activities; interacting with participants socially; and identifying and developing relationships with key stakeholders and gatekeepers. 5 7 8

9

6 Vauchez, (2012), p. 52. Pollack (2013). Le Figaro, 1954, as referred to in Cohen (2013), p. 21. Apart from slight editing (in parentheses), the quotations in this essay are as they were recorded. Interviewees are identified only as far as the group to which they belong. The personal legal assistants who work for the judges and advocates general at the CJEU.

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processing a case through the court of justice The limits of most EU law scholars’ interest in how the Court of Justice works generally extend to the procedure followed in various direct and indirect actions before that Court.10 However, there is far more involved in the working of the CJEU than is elaborated in most treatises on that institution. This section sets out how a case is processed from application to final judgment. EU law scholars generally spend little time considering that process, but such an understanding is helpful in developing a fuller understanding of the subsequent ‘output’ of the CJEU (its case law) and the consequent EU law narrative. When a case comes before the CJEU, it is allocated to a particular chamber11 and judge rapporteur. The judge rapporteur is responsible for managing the case and, following the chamber’s secret deliberations, writing the judgment. Certain cases will also be allocated to an advocate general, who will deliver an opinion on how he/she thinks that the Court should rule.12 The opinion is delivered, in open court, prior to the chamber’s deliberations. A case can be brought before the Court in any one of the twenty-four official languages of the European Union,13 and each case will have an official ‘language of procedure’. In references for preliminary rulings, the language of procedure is the language of the national court that has made the reference. In direct actions, the language of procedure is chosen by the applicant, unless a defendant is a Member State or a natural or legal person holding the nationality of a Member State, in which case the language of procedure is the official language of that state. Member States are entitled to use their own language in their written statements and observations and their oral submissions when they intervene in a direct action or participate in a preliminary reference procedure. The CJEU declares only the version in the language of procedure the authentic version of a judgment. For practical purposes, however, the Court

10 11

12

13

McAuliffe (2013a), p. 862. There are currently ten chambers at the Court of Justice and nine at the General Court. Composition of the chambers is listed on the Court’s website: www.curia.europa.eu. Cases are allocated to particular chambers by the President of the Court (or the President of the General Court where relevant). An opinion is not given in every case before the CJEU. Since 2004, if a case raises no new questions of law, then an advocate general’s opinion is not necessary. At the time of going to press, there are twenty-four official EU languages. These are, in English alphabetical order: Bulgarian, Croatian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovakian, Slovenian, Spanish, and Swedish.

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operates in a single working language: French.14 The very first step in the process of a case file through the CJEU therefore is translation of the application into French. Once an application has been translated into French and allocated to a judge rapporteur, the judge rapporteur, in turn, allocates the case to one of his/her personal legal assistants, known as référendaires. That référendaire has the responsibility of managing the case file and drafting a preliminary report. The content and structure of the preliminary report tends to vary from judge to judge. However, it usually includes a brief introduction setting out the point of the case, a summary of the legal and factual background and the submissions of the parties and observations and recommendations of the judge rapporteur. The Court will then decide what further steps to take, in particular whether to deal with the case in plenary session or refer it to a Chamber. It will also decide whether or not there should be an oral hearing.15 In cases that include an advocate general’s opinion, the judge rapporteur and his/her référendaire(s) must wait to receive that opinion before beginning to draft the substance of the judgment. In some straightforward cases, where the judge and/or his/her référendaire(s) can read the language of procedure, some of the preparatory work can be done at an earlier stage, but generally the judgment cannot be prepared before receiving the advocate general’s opinion. Also, the opinion usually has to be translated into French as, historically, advocates general write their opinion in their own mother tongue.16 The judgment is drafted in French. Students of EU law, and indeed many established scholars, are often surprised to learn that the members of a Chamber do not begin their deliberations with a ‘blank sheet’, but with a more or less fully drafted judgment. Contrary to what is often imagined, the judgment is drafted before the members of the Chamber deliberate on it.17 During the deliberations the judges will make any necessary amendments to the text. Once the members of 14

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Article 7 of Council Regulation No 1/58 (JO 34, 29/05/1959) stipulates that the CJEU may develop autonomous rules in respect of language use for proceedings. Article 76(2) of the Rules of Procedure of the CJEU provides for the Court to dispense with the oral hearing if it considers, on reading the written pleadings or observations lodged during the written part of the procedure, that it has sufficient information to give a ruling. Since 2002 that practice has changed and today’s advocates general are expected to write their opinions in one or more of the Court’s ‘pivot languages’ (English, French, German, Italian, Spanish – see infra). Cf McAuliffe (2008), McAuliffe (2012). Of course, the judgment is not drafted in a vacuum: the members of a Chamber, and their référendaires, discuss cases and exchange notes de déliberé throughout the process. Also, in some complicated cases the judge rapporteur may wish to suggest that certain points of the case be discussed in detail by members of the Chamber before the judgment is drafted.

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the Chamber have deliberated and have come to an agreement on their collegiate judgment (which may take weeks or even months), the final version of that judgment is drafted, in French, by the judge rapporteur and his/her référendaires. However, the final version of a judgment, as deliberated on by the members of the relevant Chamber, is not usually the authentic version of the judgment. As mentioned earlier, the authentic version of a judgment is the version in the language of procedure.18 Therefore, more often than not, the authentic version of a CJEU judgment (the version signed by the judges) is a translation of the version agreed on by the judges in their secret deliberations. That process can perhaps be more clearly represented by the following (simplified) diagram:

A CJEU judgment is thus a collegiate document; the final version is not only completed by a chamber of judges in secret deliberations, but the entire process involves multiple ‘authors’ working in a language that, for most, is not their mother tongue. That process also includes many layers and permutations of translation between twenty-three of the twenty-four official EU languages.19 18 19

For a more detailed explanation, see McAuliffe K (2012). Although a case may be brought before the CJEU in Irish, at the time of going to press, a derogation regarding the Irish language remains in place. Under this derogation the judgments

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The CJEU has its own translation service, which deals with those various permutations of translation at different stages of the process. The translation service is organized into separate ‘translation divisions’ for each of the official EU languages.20 Since French is the internal working language of the Court and thus the language of deliberation and the language in which all internal documents are drafted, it has a special role at the Court. The French language division must translate the application plus all of the procedural documents of the case. The French language division translates all opinions not drafted in French, but never translates judgments, since judgments of the CJEU are always drafted in French. For an overview of which documents are translated into which language(s) in both direct and indirect actions before the CJEU, see Tables 3.1 and 3.2. In the early days of the European Communities, the processing of a case through the Court of Justice, although a novel process, was not too difficult to execute. However, the Court established in 1952 to rule on the misuse of powers by the institutions of the European Coal and Steel Community (ECSC) and the European Economic Community (EEC) was a much smaller institution than the Court of Justice we know today. With only six judges cabinets and two cabinets for advocates general, the workload of the original ECSC Court was minimal – only thirty-four cases were brought before that court between 1952 and 1957, and only twelve judgments were delivered in that time. As the EEC grew in size and became the EU, so too the Court of Justice grew and extended its jurisdiction. Its workload increased exponentially, and each enlargement impacted its working methods.

enlargements at the cjeu: pressure on the translation service The main impact of each EU enlargement on the workings of the CJEU was the introduction of new official EU languages from which translations had to be provided. The Court’s translation service used a system of direct translation from and into each official language. Four official languages required twelve language combinations for direct translation. That number was increased to

20

of the CJEU are not required to be translated into Irish. To date no case has been brought before the CJEU in Irish. With the exception of the Irish language, for which there is a ‘Cell’ rather than a language division. At the time of going to press, there is one person employed in the Irish Cell, and Irish has never been used in submissions before the CJEU.

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30 combinations in 1973,21 56 in 1981,22 72 in 198523 and 110 combinations in 1995.24 Before each enlargement a ‘mild panic’ was felt throughout the Court, and in particular within the translation service.25 Prior to the accession of Austria, Finland and Sweden to the EU in 1995, it was widely speculated that the Court’s translation service would not be able to cope with the addition of a further two new official languages (raising the number of combinations from 72 to 110), and that the Court’s language regime would have to change. In fact, the translation service absorbed the new languages with minimal fuss or problems26 (no doubt aided by the fact that it took almost two years before those new Member States brought any cases before the CJEU). The concern surrounding each of those enlargements was, however, a mere drop in the ocean in comparison with the general panic that was rapidly swelling within the CJEU prior to the ‘mega-enlargement’ of 2004.27 Ten new Member States joined the EU in 2004, followed by a further two in 2007. The number of official EU languages rose from eleven to twenty-three, and with the accession of Croatia in 2013, the number now stands at twenty-four. A system of direct translation would require 552 language combinations to provide direct translation from and into 24 languages. Continuing with such a system was clearly untenable. Although the enlargement itself took place in May 2004, preparations for that enlargement were under way from as early as the mid- to late 1990s. Publicly, the Court approached its preparation for the May 2004 enlargement within the context of the discussion concerning the future of the EU judicial system, which took place between 1998 and 2004. During that time the Court put forward a number of proposals for reform of the EU judicial system, structure and procedure, culminating in its contribution to the 2003–2004 Intergovernmental Conference. Although many of the proposals for reform submitted by 21

22 23 24

25 27

With the accession of Denmark, Ireland and the United Kingdom in 1972, Danish and English were added to the list of four original official languages (Dutch, German, French and Italian). Irish (Gaeilge) is the first constitutional language of Ireland. However, since English is the second official language and in fact the vast majority of Irish government and administration is conducted in English, the Irish government agreed in 1973 that Irish would be an official language only where primary legislation (that is, the Treaties) were concerned. That remained the case until June 2005 when Irish was granted full EU official language status – this came into effect on 1 January 2007. Spain and Portugal joined the EEC in 1981, adding two new official languages. Greek was added in 1985. The accession of Austria, Sweden and Finland in 1995 resulted in the addition of two languages to that list of official EU languages: Swedish and Finnish. 26 Cf. McAuliffe (2008). Ibid. Cf. Ibid. This sense of panic was reflected in the literature on the Court of Justice – see, for example, Mullen (2000).

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the Court were not motivated by the prospect of an enlarged EU (for example, those related to the anticipated increase in caseload as a result of the entry into force of the Treaty of Amsterdam), enlargement certainly was a catalyst for others.28 With regard to the translation problem, the Court submitted a number of reports and other documents to the Council and Parliament, highlighting the difficulties of translation from the point of view of resources and logistics. Those reports on translation tended to underline the importance of maintaining the EU linguistic regime as a whole, as well as the linguistic regime and translation policy within the Court itself. This point is particularly interesting as, in documents prepared in parallel to such reports on translation (in the course of the debate on the future of the EU judicial system), the Court gave serious consideration to proposals to change that linguistic regime and translation policy. In the end, the linguistic regime at the Court of Justice remained as it always had been (i.e. with French as the working language of the Court), but changes were made to its translation policy. The solution was the introduction of a system of ‘pivot translation’ alongside the direct translation system.

pivot translation at the cjeu The translation system, which has been in use at the Court since May 2004, is, on paper at least, actually a mixed translation system; direct translation is used whenever possible, rather than translation through a ‘pivot language’. However, given the Court’s ever-increasing workload,29 pivot translation is the norm. Documents in certain languages (the post-2004 languages) are translated into a particular ‘pivot language’ and then from that pivot language into the other EU official languages, and vice versa. This reduces the number of language combinations for translation from a potential 552 to a more manageable 134, which saves significantly on labor. There are five pivot languages: French, English, German, Spanish and Italian. Because French is the working language of the Court, the French translation division provides translations from all of the ‘post-2004’ EU official languages when necessary.30 Each of the other four pivot language divisions are ‘partnered’ with a number of other official languages.31

28 30 31

29 Cf. McAuliffe (2008). Cf. Harmsen and McAuliffe (2015). With the exception of Maltese and Irish. See infra, note 31. The German language division provides translations from Polish, Estonian, Finnish, Dutch, Bulgarian and Czech; the English language division from Lithuanian, Swedish and Danish; the Spanish division from Hungarian, Latvian, Portuguese and Croatian; the Italian language division from Slovak, Slovenian, Greek and Romanian. The French language division provides full language coverage. Since English is the second official language of both Malta and Ireland, it is assumed that the Maltese and Irish lawyer-linguists are able to provide English translations of documents in Maltese and Irish where necessary.

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Since French is the working language of the Court, the French language division must provide translations of all documents originating externally and drafted in any EU official language. However, the only external documents that go through the pivot translation system are orders for reference for a preliminary ruling, Member State observations and applications to intervene in direct actions (i.e. those documents which are subsequently notified to all Member States and which therefore must be available in all official EU languages). The following diagrams perhaps more clearly represent how the pivot translation system works: (a) Documents drafted in post-2004 official languages

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(b) Documents drafted in pre-2004 official languages

It is clear, from the above, that while the task of the CJEU’s translation service may seem relatively straightforward (translating documents ‘coming in’ into French and those ‘going out’ into all of the official EU languages), the process behind such a task is more complicated than it may seem.

the people behind the process The second part of this EU law story focuses on the individuals involved in producing the CJEU’s jurisprudence, in particular those involved in drafting and translating judgments and opinions. There are twenty-eight judges at the CJEU (and twenty-eight at the General Court),32 one from each Member State. There are currently nine advocates general.33 It is relatively easy to find out who those judges and advocates general are, where they are from and what their motivations may be; the Court’s own website lists a biography and short CV for each current and former member of the Court.34 However, as we have seen, the CJEU’s judgments are not only collegiate documents, but involve multiple ‘authors’. This section considers the role of those ‘authors’ at various points in the production process: that of the référendaires 32

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At the time of going to press, the CJEU is in discussions with the European Parliament concerning the appointment of a further twenty-eight judges at the General Court. There are six permanent advocates general, one from each of the ‘big’ Member States (France, Germany, Italy, United Kingdom, Spain and Poland). The three remaining posts are rotated between the remaining twenty-two Member States. www.curia.europa.eu (last accessed 6 November 2014).

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who are involved in the drafting of judgments, and of the lawyer-linguists who translate those documents. Référendaires Each judge and advocate general employs three or four référendaires; discovering who those référendaires are and how they work is not so easy. This is where methodologies borrowed from disciplines outside of law, such as participant observation, can be useful in helping us understand more of what happens behind the scenes. As already mentioned, référendaires work exclusively for the judge or advocate general to whose cabinet they are attached. They are recruited by the member him/herself and as such are not permanent staff of the CJEU. Ideally, provided that he/she was compatible on a professional and personal level with that judge or advocate general, a référendaire would remain working in a cabinet for the full term of his/her employer. Increasingly, however, référendaires tend to remain in that post for a much shorter time than was the norm in the past. Nowadays it is common for the staff of a cabinet to change completely over the course of three or four years. There are many reasons for this high turnover rate. More and more young lawyers who are at the start of their careers are being recruited as référendaires, and such lawyers will invariably move on to other positions as practicing lawyers, academics or even to other posts within the EU institutions. As mentioned earlier, the nature of the post of référendaire is temporary, so offers of permanent employment will always be tempting. Many référendaires (in particular those from Ireland and the United Kingdom) view the job as a type of secondment or career break and, after a few years at the Court, return to their permanent jobs in their own Member States. Many others are actually officially on secondment from their own permanent jobs. It is rare (although not unprecedented and becoming more common in recent years) for a post of référendaire to be advertised, and there has never been any formal open competition for their recruitment. Often judges and advocates general recruit people with whom they have worked in the past or who have been recommended to them. The minimum requirement to become a référendaire at the CJEU is to be a qualified lawyer with a good knowledge of EU law and with at least a reasonable knowledge of French. In spite of the fact that (judges’) référendaires are required to work wholly in French, they are not required to have a ‘perfect’ command of that language.35 Almost without exception, 35

If a référendaire is not sufficiently competent in the French language, however, it can cause problems for the judge for whom he/she works. Cf. McAuliffe (2013a).

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référendaires come from backgrounds of ‘practicing’ lawyers, be they members of the bar of their own Member States, lawyers in large European law firms or, as is the case for many from civil law jurisdictions, law clerks for Member State courts or government agencies/organizations. When new judges or advocates general come to the Court, they generally bring their own staff with them, although they sometimes keep the staff of the cabinet of the departing member and they do frequently try to recruit at least one référendaire from the institution itself as ‘it is useful to have at least one member of the cabinet who knows and understands how the institution works’. It is common for the référendaire to be of the same nationality as the judge or advocate general for whom they work, but this is by no means invariably the case; in fact, many judges attempt to have at least one francophone référendaire in their cabinet. The role of the référendaire is principally to assist the judge or advocate general in drafting documents such as reports, judgments, opinions and, in the case of the Presidents of the CJEU and General Court, orders. Those référendaires work extremely closely with the individual judge or advocate general by whom they have been employed. The roles of judges’ and advocates general’s référendaires differ considerably, since the role of the advocate general and the style of the opinion differ significantly from that of a judge and judgment, respectively. Since the focus of this chapter is the production of CJEU judgments, this section considers in more detail the role of judges’ référendaires.36 While officially it is the judge rapporteur who is responsible for drafting the judgment according to what is agreed on by the chamber in deliberations, in reality it is his/her référendaire who drafts the text, or at least the first version of it. Because of the heavy workload of the CJEU, it is not always (or even often) possible to allocate cases to cabinets or to particular référendaires within a cabinet on the basis of expertise. For this reason référendaires claim that they have to be ‘generalists’ who are ‘knowledgeable about every area of EU law’. Not only that – they also have to be able to understand and use their knowledge in French, a language that in most cases is not their native tongue. As has been demonstrated in a number of studies by the present author, working in French has a clear impact on the linguistic development of the CJEU’s case law.37 Although few of the référendaires interviewed complained 36

37

Owing to space constraints, it is not possible to discuss the role of the advocates general or their référendaires in more detail. For a more detailed discussion of this role, see McAuliffe (2013a). Cf. McAuliffe (2013a); McAuliffe (2013b); McAuliffe (2011).

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of difficulties in drafting in French,38 ‘since legal concepts are intimately connected with intellectual reasoning processes’, they are nonetheless ‘reined in’ by their own legal language and the legal reasoning embedded therein.39 Having said that, many of the référendaires interviewed insisted that having to work in French led them to conclusions which may have been different to those they would have reached had they been writing in their own language: [I]t can be difficult to find terms in a foreign language that meet your exact thinking, [but] working in a foreign language can also help you to find answers to legal problems that you wouldn’t have found in your own language.

Although many référendaires interviewed felt that way, it is in fact more likely that they reach a similar solution through slightly different reasoning: It is often difficult to say exactly what you want to say in a judgment . . . often the Court will want to say X but in the very rigid French of the Court that is used in the judgments you have to get around to X by saying that it is not Y!40

Owing to the CJEU’s many rules and conventions regarding language use, référendaires feel constrained as to the style of writing they must employ. They are then further constrained because of the collegiate nature of the Court’s judgments, the final version of which is decided by a chamber of judges in secret deliberations. Moreover, there is a perceived pressure to cite previous judgments ‘word-for-word’ or even ‘paragraph-for-paragraph’.41 However, many see these linguistic constraints and the very formulaic language used in CJEU judgments as useful and as a type of safety net: since référendaires are by their own admission ‘generalists’ rather than experts in the various areas of EU law in which they work:

38

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In fact, the only référendaires who expressed any problems/difficulties with drafting in French were francophones, who feel that the formulaic style of CJEU judgments and the ensuing ‘Court French’ are almost as alien to the ‘real’ French language as English or German would be! Cf. McAuliffe (2011). Cf. Pozzo (2006), p. 9. However, that in itself is enough to have an impact on the reasoning of the CJEU and subsequently the development of its case law. Cf. McAuliffe (2015). There are a number of factors contributing to this ‘pressure’. First, référendaires are, for the most part, working in a language that is not their native tongue, and so since the early days of the CJEU there has always been a tendency to use the same expressions over and again. Second, référendaires are encouraged to use the same terminology and to cite phrases from previous cases in their entirety in order to speed up the translation process. Third, some argue that since the CJEU is building a rule of law in a developing legal system, it is necessary to repeat the same expressions over and again to help to embed that legal system. Finally, it is often necessary to refer to provisions of relevant EU legislation. In those cases référendaires are obliged to use the same specific wording used in the provision in question.

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Karen McAuliffe In your own language you have a huge choice of words and phrases and so there is more risk of making a mistake where you are drafting a judgment concerning an area of EU law that you may not be expert in.42

All of these factors lead to an environment where repetition is the norm: Because we are writing in a foreign language there is a tendency to do a lot of ‘cutting and pasting’ and so the style [in which the CJEU’s judgments are written] reproduces itself. If something along the lines of what I want to say has been said before by the Court, then I will just use that same expression – I’ll ‘cut and paste’ it.

That, in turn, leads to the development of a type of (linguistic) precedent in CJEU judgments, in spite of the fact that no such rule actually exists within the EU court system.43

Lawyer-Linguists The second group to be considered in this EU law story is the CJEU’s translation service, and more specifically the lawyer-linguists. The Court’s translation service is that institution’s largest department, making up almost half of its total staff.44 Those responsible for translating documents into the working language of the Court and subsequently into all of the official EU languages are known as lawyer-linguists. This job is an extremely important one, since not only does the Court rely on translations of applications, submissions and pleadings into French in order to reason and deliberate on a case, but in most cases the authentic version of a judgment will also be a translation. The criteria to become a lawyer-linguist at the CJEU are not set in stone. However, prospective lawyer-linguists are typically required to possess a perfect command of their native tongue and an in-depth knowledge of at least two other official EU languages. They are also usually required to hold a law degree awarded in an EU Member State and generally to have two years of professional experience. Lawyer-linguists are recruited through the European

42

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However, according to some lawyer-linguists (see infra), such mistakes are even more likely where the référendaire does not fully understand the implications of the translation of their choice of wording or terminology in French. Cf. McAuliffe (2013a). Cf. McAuliffe (2013b). In 2014, the Court’s linguistic service employed 1,008 staff (47% of the Court’s total staff), 630 of who were lawyer-linguists. Source: www.curia.europa.eu (last accessed April 2015).

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Personnel Selection Office (EPSO), and frequent ‘competitions’ are held to recruit lawyer-linguists for specific languages.45 The role of a lawyer-linguist is a difficult one. In order to be able to translate legal concepts from one language to another, lawyer-linguists need a comprehensive knowledge of not only their own legal systems but also the legal systems of other Member States, as well as a thorough understanding of EU law and the CJEU’s jurisprudence. In a supranational legal order founded on a principle of uniformity of law throughout twenty-eight Member States, the CJEU’s lawyer-linguists must ensure that the Court’s case law remains consistent across twenty-three language versions. This involves understanding how CJEU judges intend concepts to be understood (not always easy, since the deliberations are secret) and how the legal language that they use in translation is likely to be interpreted in the relevant Member State(s). Thus lawyerlinguists are responsible for legal issues that may arise because of linguistic ambiguities in texts. As has been demonstrated in previous studies by the present author, the CJEU’s lawyer-linguists appear to be trying to balance a dual professional identity – that of a lawyer and a linguist.46 The necessary compromise resulting from the struggle to reconcile the notions of ‘law’ and ‘translation’ is reflected in the process of ‘filtering out’ the CJEU’s case law to the wider EU through translation.47 This notion of a linguistic cultural compromise at the CJEU is put forward by the present author in a series of publications on law and language at that Court.48

case studies Thus far, this chapter has discussed the process behind the production of the CJEU’s case law and the people involved in producing it. The question to consider now is whether that process actually has any real impact on the case law itself. Studies in disciplines outside of law demonstrate that process has a clear impact on the output of an institution.49 According to all the lawyerlinguists and the majority of référendaires interviewed for the purposes of this 45

46 48 49

These competitions, which are nowadays centralized through EPSO, usually involve a series of computer-based testing of a candidate’s verbal, numerical and abstract reasoning; participation in ‘assessment centres’ involving group exercises and oral presentations; translation tests; and a formal interview. 47 Cf. McAuliffe (2013a); McAuliffe (2011); McAuliffe (2010). McAuliffe (2015). McAuliffe (2010), (2011), (2013), (2013a), (2015). Some interesting studies of the European Commission and Parliament investigate the notion of process and output in those multilingual, multicultural institutions. Cf. Bellier (2000), Abélès (2004).

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chapter, the process of producing case law at the CJEU can potentially lead to problems of a legal nature. This section highlights some such problems in two separate case studies. The first demonstrates problems that can arise at the member state level due to mistranslation, and the second discusses potential legal issues that arise in the Court’s own case law due to the unique process of producing collegiate judgments. The first case study concerns a series of cases that arose before the Competition Appeal Tribunal in the United Kingdom in the early 2000s (the replica sports kit cases),50 which involved “concerted practices” (price-fixing agreements) between the parties in relation to the sale of replica football kits. The definition of a concerted practice in EU law is set out in a judgment of the CJEU’s General Court in Case T-25/9551. Paragraph 1852 of the English language version of that judgment states: In order to prove that there has been a concerted practice . . . [i]t is sufficient that by its statement of intention the competitor should have eliminated, or at the very least, substantially reduced uncertainty as to the conduct to expect of the other on the market (emphasis added).

However, the French-language version (i.e. the version in which the judgment was drafted and deliberated on by the judges) states: Il suffit que, à travers sa declaration d’intention, le concurrent ait éliminé ou à tout le moins substantiellement réduit l’incertitude quant au comportement à attendre de sa part sur le marché (my emphasis) [it is sufficient that by its statement of intention the competitor should have eliminated, or at the very least, substantially reduced uncertainty as to its own expected conduct on the market (my translation)].

It seems that, according to the requirements imposed in the French-language version of the judgment, for a concerted practice to exist, it is sufficient that two competitors meet and that one indicates what it itself is likely to do; whereas, according to the English-language version, a concerted practice requires that one competitor has to indicate what conduct the other should follow on the market. It was that English-language version on which the applicants in the Replica Sports Kit Cases attempted to rely. The Cimenteries case was relatively unusual in that there were nine languages of the case and therefore nine equally authentic language versions of 50

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Case numbers 1019–1022/1/03 Umbro Holdings Ltd v Office of Fair Trading; Manchester United PLC v Office of Fair Trading; Allsports Ltd v Office of Fair Trading; JJB Sports PLC v Office of Fair Trading [2005] CAT 22. Cimenteries CBR and Others v Commission [2000] ECR II-491.

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the judgment. The UK Competition Appeal Tribunal compared four of those language versions (French, German, Italian and Spanish) and concluded that each of them was in accord with the French-language version, and thus the French-language version should be considered correct. The question to consider, however, is whether the ruling of the UK Competition Appeal Tribunal would have been any different had the English-language version of the Cimenteries case been the only authentic version of that judgment. Although the CJEU has set out a requirement for national courts to compare language versions when interpreting EU legislation (all of which are considered ‘equally authentic’),52 how realistic is it to expect Member State courts and tribunals to compare up to twenty-three different language versions of a CJEU judgment before interpreting that judgment, in particular where that Court officially declares only one of those language versions ‘authentic’?53 The procedure for reference for a preliminary ruling requires Member State courts or tribunals in some instances to refer to the CJEU questions of interpretation of EU law.54 However, under the ‘Acte Clair’ doctrine, those courts are not required to make such a reference where the EU rule in question seems clear and unambiguous.55 If an EU rule seems clear and unambiguous in a Member State court’s own language, how realistic is it to expect that court to then check up to twenty-three other language versions of that rule to be sure?56 The second example involves a 2004 order of the CJEU concerning waste management.57 In Council Directive 75/442/EEC,58 the word ‘réemploi’ is used in French, and ‘reuse’ is used in English. That term is defined in various waste-related legislation and papers on the EU waste management hierarchy as referring to a substance or object that is used again for the same purpose as that for which it was originally used. The primary meaning of the term ‘reuse’, as found in the EU waste hierarchy, is the repeated use of non-hazardous wastes, in their original form. Waste can also be ‘reused’ as part of a recovery operation, such as operation R1 in Annex II B of the Directive – ‘use 52 53

54 55

56

57

58

Case 283/81 CILFIT v Ministry of Health [1982] ECR 3415, paragraphs 18–20. For an excellent examination of the CILFIT criteria from the perspective of legal linguistics, see Kjaer (2010). Article 267 of the Treaty on the Functioning of the European Union. Owing to space constraints, it is not possible here to enter into a discussion of the Acte Clair doctrine. Cf. Kjaer (2010). For an excellent analysis of multilingual comparisons of EU rules by national courts, see Derlén (2009). Order of the Court (Third Chamber) of 15 Jan 2004 in Case C-235/02 Criminal proceedings against Marco Antonio Saetti and Andrea Frediani [2004] ECR I-1005. Council Directive 75/442/EEC of 15 July 1975 on waste (OJ L 194, pp. 39–41) as amended by Council Directive 91/156/EEC of 18 March 1991 (OJ L 78, pp. 32–37).

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principally as a fuel or other means to generate energy’. Case C-235/02 centred on the ‘réutilisation’, as fuel, of petroleum refining by-products, which are classified as hazardous waste and therefore cannot be ‘reused’ (except as part of a recovery operation).59 It seems that the industries in question in that case were burning those by-products and using the energy produced from burning them as fuel – claiming, therefore, that it was a ‘recovery action’. The référendaire responsible for drafting the order in question (in French) was not an expert in the EU rules on waste management.60 That référendaire chose to use the French term ‘réutilisation’ to describe the use in question. Since réutilisation is a different word from réemploi, as used in the French language version of Directive 75/442, in the opinion of the référendaire, there should not have been any problem with the order. However, while the word ‘réutilisation’ can be translated into English as ‘recuperation’ or ‘recovery’, the far more usual translation would be ‘reuse’, and therein lies the problem (in particular since the authentic language version of most cases before the CJEU concerning waste management is English). The ‘réutilisation’ of the toxic waste referred to in the order is not in fact ‘reuse’ meaning a product being used again for its original purpose; rather, if it is considered a waste, it would be reused as part of a recovery operation. However, if the Court were to use the word ‘reuse’ with reference to certain toxic substances that would normally be considered hazardous, one might reasonably assume that the substances in question are not to be considered hazardous (and can therefore be disposed of or dealt with without having to conform to any special criteria). In the order in question, ‘réutilisation’ was, in fact, rendered in English as ‘further use’.61 However, that particular translation resulted from the fact that the lawyer-linguist responsible for translating the order into English was an expert in waste management! That lawyer-linguist deliberately avoided using the term ‘reuse’ because of what she regarded as the potential consequences of such use: If a référendaire who . . . doesn’t understand the technicalities of waste issues, drafts an order or judgment [in French] using words which have a very specific technical meaning, without understanding the nuances of those words; and the judgment is then translated . . . by a lawyer-linguist who also

59

60 61

See Council Directive 75/442/EEC (note: such hazardous waste must be disposed of under very specific, strict conditions). See the discussion, supra, on référendaires as ‘generalists’. In the case in question, however, the Court decided that, in fact, the waste by-product should not be considered a waste at all, but rather an integral part of the production process, because it was to be used again, and fully, without further processing.

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has no technical knowledge of the subject, toxic waste, which cannot under any circumstances be ‘re-used’ but which must be subject to either a disposal or a recovery operation, might wind up described as being ‘re-used’. That, in turn, would create a feedback loop whereby hazardous wastes – by virtue of being capable of re-use – are no longer hazardous but are merely waste.

All the lawyer-linguists interviewed for this essay felt that it was ‘extremely likely’ that ‘réutilisation’ in French would ‘usually be translated as reuse’ in English. One lawyer-linguist commented that the use of that one little word could completely change the hierarchy of waste management in the European Union: industries could potentially bring an action claiming that the substances in question in those cases cannot be hazardous because they are being ‘reused’ within the meaning of [Council Directive 75/442/EEC].

This case study is particularly interesting, as it was precisely because the lawyer-linguist in question was an expert in the area that the issue was highlighted. However, there is no guarantee that all orders or judgments will be translated by lawyer-linguists who are technical experts in the relevant specific fields of EU law. Thus, it seems that even in instances where there may be no obvious linguistic divergences in case law, there is, albeit in a minority of cases, a risk of that case law being legally inconsistent.62 The CJEU would of course deal with such inconsistencies using its teleological method of interpretation.63 However, in order for it to do so, such inconsistencies would have to be first brought before it for interpretation – which again raises the question of how realistic it is to expect Member State courts to compare up to twenty-three language versions, particularly when the version in a court’s own language may seem perfectly clear.

conclusion This EU law story – a look behind the scenes at the process of producing the CJEU’s multilingual jurisprudence – is, of itself, interesting. Not only are there, as this volume highlights, fascinating stories behind particular cases, but there is yet another layer behind those stories. In addition to its inherent

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The present author is currently conducting a large-scale study on law and language at the CJEU, funded by the European Research Council (ERC), which considers, among other issues, the levels of linguistic and legal divergences in that Court’s case law. For further information on this project, see www.karenmcauliffe.com, or contact the author directly. Cf. McAuliffe (2011), McAuliffe (2013a).

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interest, a fuller understanding of the inner workings of the Court can provide a fuller understanding of how its case law has evolved. This type of behind-thescenes narrative thus inevitably leads to a more nuanced understanding of EU law. Furthermore, developing a better understanding of the inner workings of the environment in which a significant part of EU law is created allows us to work towards delimiting the inconsistencies that inevitably arise in this evolving multilingual system. The CJEU is often seen as a type of platonic institution, handing down collegiate judgments written in a formulaic language because its judgments are collegiate in nature with no dissenting opinions produced by individual judges. Scholars remain preoccupied with the CJEU’s ‘output,’ but in fields outside of law, it is widely accepted that process necessarily affects output. It is therefore reasonable to presume that the process behind the production of the CJEU’s multilingual jurisprudence could have implications for its development. In spite of that, the literature on the CJEU largely ignores the process through which the actors at that institution produce its decisions. With the exception of previous work by the present author, none of the literature on the CJEU problematizes it in terms of its operating in a multilingual, multicultural setting. Recently, however, a number of excellent studies have sought to go beyond the standard EU law narrative, and this volume forms part of that new scholarship.64 This chapter contributes to that developing field by urging the reader to think of the CJEU, not simply in a platonic and rather abstract way, but as a multilingual, multicultural institution. The CJEU’s case law is not created and translated by machines, but by individuals of many mother tongues, from many different legal cultures, and is necessarily shaped by the dynamics of that institution. In addition to being a collegiate document, a CJEU judgment is multilayered and multi-‘authored’. The various factors and stages of the production process have an impact on the development of the jurisprudence and, by extension, could also impact the development of EU law. Understanding the situational factors of, and compromises involved in, the production of those decisions can therefore aid our understanding of EU law and illustrate the limitations of a multilingual legal system.

acknowledgements I would like to thank in particular Professor Robert Harmsen of the University of Luxembourg and colleagues at the iCourts Centre of Excellence at 64

See, for example, Vauchez and de Witte (2013); Davies and Rasmussen (2012); Davies (2012).

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Copenhagen University where I was based while I wrote this essay, as well as the European Research Council, which funded that research visit as part of the ‘Law and Language at the ECJ’ project (more info available at: llecj. karenmcauliffe.com). I also would like to thank my former colleagues at the Court of Justice in Luxembourg for their assistance with this research, in particular Mr. Alfredo Calot-Escobar, Ms. Susan Wright and Mr. Geoffrey Thomas. Any errors are mine alone.

appendices table 3.1 Documents to be translated in direct actions (Note: not all of the documents will be relevant for every case) Translation into: Language of procedure

Internal working language (i.e. French)

Application/Appeal

✔

OJ Notification of the action Defence/Response (to Appeal) Reply

Drafted in French

✔

✔ ✔ ✔

Rejoinder Member State Observations Application to Intervene

The other languages

✔

✔

✔

✔

Statement in intervention

✔

Documents lodged during the oral procedure Report of the judge rapporteur Advocate general’s opinion

✔

✔

Judgment

✔

Summary

✔

OJ notification of judgment

✔

Internal document drafted in French ✔ Internal document drafted in French Internal document drafted in French Drafted in French

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✔ ✔ ✔ ✔

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56

table 3.2 Documents to be translated in references for a preliminary ruling (Note: not all of the documents will be relevant for every case) Translation into: Language of procedure

Internal working language (i.e. French)

The other languages

Order for Reference

✔

OJ Notification of the order for reference Observations of the parties to the main procedings Member State Observations

Drafted in French

✔

✔

✔

✔

✔ ✔

Documents lodged during the oral procedure Report of the judge rapporteur Advocate general’s opinion

✔

Judgment

✔

Summary

✔

OJ notification of judgment

✔

Internal document drafted in French ✔ Internal document drafted in French Internal document drafted in French Drafted in French

✔ ✔ ✔ ✔

references Abélès (2004) ‘Identity and Borders: An Anthropological Approach to EU Institutions’ Twenty First Century Papers 2(1). Bellier (2000) ‘A Europeanized Elite? An Anthropology of European Commission Officials’ Yearbook of European Studies 14. Cohen (2013) ‘Ten Majestic Figures in Long Amaranth Robes’: The Formation of the Court of Justice of the European Communities’ in Vauchez and de Witte (eds) Lawyering Europe: European Law as a Transnational Social Field Hart, 21. Davies (2012) Resisting the European Court of Justice: West Germany’s Confrontation with European Law, Cambridge University Press Davies and Rasmussen (2012) ‘Towards a New History of European Law’ (21)3 Contemporary European History 305 Derlén (2009) Multilingual Interpretation of European Union Law Kluwer Law International. Harmsen and McAuliffe (2015) ‘The European Courts’ in Magone, J (ed) Routledge Handbook on European Politics, Routledge. Kjaer (2010) ‘Nonsense: the CILFIT criteria revisited: from the perspective of legal linguistics’ in Hoch, Hagel-Sørensen, Haltern and Weiler (eds) Europe: the new legal realism: essays in honour of Hjalte Rasmussen Copenhagen: DJØF Forlag.

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McAuliffe (2008) ‘Enlargement at the European Court of Justice: Law, Language and Translation (14)6 European Law Journal, 806. (2010) ‘Language and the Institutional Dynamics of the Court of Justice of the European Communities: Lawyer-Linguists and the Production of a Multilingual Jurisprudence’ in Gueldry (ed) How Globalizing Professions Deal with National Languages: Studies in Cultural Conflict and Cooperation, The Edwin Mellen Press, 239. (2011) ‘Hybrid Texts and Uniform Law? The Multilingual Case Law of the Court of Justice of the European Union’ (24)1 International Journal for the Semiotics of Law. (2012) ‘Language and Law in the European Union: The Multilingual Jurisprudence of the ECJ’ in Solan and Tiersma (eds) The Oxford Handbook of Language and Law, OUP, 200. (2013a) ‘The Limitations of a Multilingual Legal Order (16)4 International Journal for the Semiotics of Law, 861. (2013b) ‘Precedent at the ECJ: The Linguistic Aspect’ (15) Current Legal Issues, 483 (2015) ‘Translating Ambiguity’ Journal of Comparative Law. Mullen (2000) ‘Do You Hear What I Hear? Translation, Expansion and Crisis in the European Court of Justice’ in Green Cowles and Smith (eds) The State of the European Union: Risks, Reform, Resistance and Revival Oxford University Press. Pollack (2013) ‘The New EU Legal History: What’s New, What’s Missing? American University Law Review. Pozzo (2006) ‘Multilingualism, Legal Terminology and the Problems of Harmonising European Private Law’ in Pozzo, B and Jacometti, V (eds) Multilingualism and the Harmonisation of European Law, Kluwer Law International, 3. Stein (1981) ‘Lawyers, judges and the making of a transnational constitution’ (75) American Journal of International Law, 1. Vauchez (2012) ‘Keeping the Dream Alive: The European Court of Justice and the Transnational Fabric of Integrationist Jurisprudence’ 4(1) European Political Science Review 51–71. Vauchez and de Witte (2013) Lawyering Europe: European Law as a Transnational Social Field Hart.

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4 Judges or Hostages? Sitting at the Court of Justice of the European Union and the European Court of Human Rights

mathilde cohen

introduction Bureaucratic structures and procedures are an integral part of present-day courts. Court staff, in particular, occupy a critical position in the administration of justice in many judicial systems around the world. They typically represent a diverse corps of subordinated professionals to whom judges delegate responsibilities for discrete aspects of their adjudicative and administrative functions, be it overseeing pretrial matters, assisting with legal research and drafting or assuming responsibility for court operations. Following Owen Fiss’s work on the US federal judiciary, I do not use the word “bureaucracy” with a pejorative connotation, but descriptively to refer to “a complex organization with three features: (1) a multitude of actors; (2) a division of functions or responsibilities among them; and (3) a reliance upon a hierarchy as the central device to coordinate their activities.”1 The two supranational European courts – the Court of Justice of the European Union (CJEU) in Luxembourg and the European Court of Human Rights (ECtHR) in Strasbourg – are no strangers to bureaucracy so defined. The number and variety of their non-judicial personnel is striking, especially compared to domestic courts of last resort. Excluding the service staff not directly involved with cases such as security, building management, cleaning, and so on, domestic supreme or constitutional courts usually depend on a few assistants, be they staff lawyers, law clerks or research librarians. The ECtHR’s registry includes some 672 staff members (274 lawyers and 398 other support staff) for 47 judges, a very high ratio. The CJEU’s army of staffers is even more staggering: the 28 judges and 9 advocates general (AGs) rely on some 150

1

Owen M. Fiss, The Bureaucratization of the Judiciary, 92 Yale L.J. 1442, 1444 (1983).

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référendaires,2 610 lawyer-linguists, about 75 staff interpreters and dozens of managers and administrative assistants. While the CJEU and the ECtHR vary in many relevant ways such as institutional design, role, types of cases heard, budget, staff and so on, they have a great deal in common in terms of general mission and work methods. They are both supranational courts animated by a “pan-European mission and perspective,”3 facing similar organizational challenges, such as how to allocate resources in the face of high dockets. Both courts exhibit a number of traits typical of bureaucracies, such as organization by functional specialty, hierarchical relationships, impersonality and consistency in decision-making. Their high degree of formalization and specialization leads to a fragmentation of the judicial task. Often the person who translates the briefs and other relevant portions of the record is not the one who studies the issues and drafts the opinion, nor the one who hears the arguments and formally decides the case, nor the one who translates and edits the final version of the opinion before publication.4 What can account for this level of bureaucratization? Along institutional design, I single out as explanatory factors the specific constraints imparted by international adjudication which generate various asymmetries between the judges and the staff. This chapter hypothesizes that the rise of a European court bureaucracy may paradoxically foster elements of non-bureaucratic culture. European judges and staffers are not separated by an invisible and impassable wall. The CJEU and the ECtHR increasingly attract professionals of comparable competence and qualifications across the judge-staff divide. On the one hand, the courts hire domestic judges to work as staffers. On the other hand, a growing number of judges are recruited from among the rank of the courts’ staff. Does this blurring of the line indicate that the judges are at greater risk of being captives to the bureaucracy? Or is the increased homogeneity in backgrounds conducive to less ceremonious mode of organization, where roles and expectations are more loosely defined? While it is perhaps too soon to draw a positive conclusion, there may be benefits to the fluidity between judges and staffers. Professional endogamy may facilitate interactions and exchanges with less formalization of behaviour, thus leading to more opportunities for intra-court debate and deliberation. This chapter’s methodology is mainly interpretive and conceptual, building upon the emerging sociology of European institutions and European legal actors. The likes of Karen Alter, Antonin Cohen, Mikael Madsen or Antoine 2 4

3 See infra, Part. I.A. Neville March Hunnings, The European Courts 257 (1996). See McAuliffe, this volume.

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Vauchez have pioneered the field by situating European institutions in their broader social context, focusing on the social means by which legal professionals build their networks and legitimate the supremacy of European law.5 I supplement this socio-historical approach with information I gathered over the past few years through qualitative empirical research. More specifically, my argument relies on seventeen in-depth, semi-structured interviews conducted with current or former judges, clerks, staff lawyers and translators at CJEU and the ECtHR.6 The chapter begins with an overview of the European courts’ bureaucratic features, chronicling the work performed by different categories of personnel and the various forms of hierarchical relationships in place. The second section proposes several explanations for this work organization, both in terms of institutional design and asymmetries of knowledge. The third section describes the growing tangling between judges and staffers, asking whether it leads to a hostage situation, whereby judges would be unduly influenced by the staff.

bureaucratic courts The European high courts exhibit a number of bureaucratic traits, such as organization by functional specialty, hierarchical relationships, impersonality and consistency in decision-making.7

Organization by Functional Specialty A division of labor based on technical qualification is in place. As a lawyerlinguist at the CJEU put it, “we are part of an organization structured so as to have an organized document flow and very little space is left to 5

6

7

See, e.g., Karen Alter, The European Court’s Political Power: Essays on the Influence of the European Court of Justice on European Politics (2009); Antonin Cohen & Antoine Vauchez, Introduction: Law, Lawyers, and Transnational Politics in the Production of Europe, 32 Law & Soc. Inquiry 75 (2007); Mikael Rask Madsen, Legal Diplomacy: Law, Politics and the Genesis of Postwar European Human Rights, in StefanLudwig Hoffmann (ed.) Human Rights in the Twentieth Century: A Critical History 62 (2011). This is not in any sense a representative sample, but simply a reflection of individual judges and court personnel whom I considered particularly interesting for this study and who made themselves available for interview. Beginning with a few contacts at the courts under study, I recruited most of my interviewees through the contacts of previous interview subjects (a practice known as “snowball sampling”). The identity of the interviewees has been kept confidential. They are referred to in this chapter using random letters. On the idea of an increasingly centralized decision-making procedure, see Vauchez, this volume.

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improvisation.”8 In addition to their administrative support, research, documentation and library personnel, both the CJEU and the ECtHR employ two main categories of staffers: the first contribute mostly legal support, and the second provide linguistic assistance (though there are areas of overlap.)9 Legal Tasks In Luxembourg, each judge and advocate general (AG) has a “cabinet,” that is, a team of four personal legal assistants commonly referred to by their French name, référendaires, in addition to interns and secretaries. The référendaires are hired by and work closely with their judge or AG. Their main task is to conduct research analyzing laws and jurisprudence on the cases assigned to their chamber. They prepare memos known as “reports” as well as draft judgments (or “opinions” in the case of référendaires clerking for AGs.)10 In dealing with applications, ECtHR judges are assisted by a registry comprised of lawyers from all the Member States, officially known as “legal secretaries.” Unlike the CJEU’s référendaires, these lawyers are pooled and available to all the judges.11 Registry lawyers have their own case lists and are responsible for processing cases through all stages of the procedure, working under the dual supervision of senior registry members and the juge rapporteur. A lawyer’s tasks may include reviewing the submissions of the parties, legal research, citechecking, drafting memoranda for the judge summarizing the facts of the case, the litigants’ arguments, a suggested holding and drafting the court’s opinion. Their function is similar to that of the référendaires, with the difference that they are more specialized. ECtHR lawyers typically handle applications originating from their own legal system and in their native language when référendaires attend to whichever cases are assigned to their cabinet. Linguistic Tasks The Luxembourg and Strasbourg courts are multilingual institutions, with cases brought in any of the Member States’ official languages. Supported by 8

9 10

11

Interview with RY, former référendaire and lawyer-linguist at the CJEU since the late 1990s (July 2, 2014) (my translation). For a fine-grained presentation of the CJEU staff, see McAuliffe, this volume. When their judge is the juge rapporteur – the judge who has been assigned the primary responsibility for a case – one of the cabinet’s référendaires drafts a purely internal document, the rapport préalable, which summarizes the facts, law and relevant argument, including a suggestion about how to proceed with the case. See Michele de Silvia, L’administration d’une jurisdiction internationale. L’exemple du greffe de la cour européeenne des droits de l’homme, 126 Revue Franc¸aise d’administration publique 333, 337 (2008).

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an army of lawyer-linguists, the CJEU translates all of its judgments in the twenty-four EU languages, while the ECtHR, which issues its judgments in French or English only, relies on a comparatively smaller language unit. At the CJEU, lawyer-linguists, experts in comparative law as well as legal translation, carry out the task of translating.12 These highly qualified in-house translators are involved in all the phases of case law production. They translate a variety of documents to assist the court’s deliberation, from the confidential procedural documents, which form the basis of the submissions, to the court’s internal documents (reports, draft judgments, AG opinions), to the final judgments. At every stage, their choice of words may affect the substance.13 At the Strasbourg court, registry lawyers do most of the translating work from the record themselves. It is therefore key for the court to hire lawyers originating from all of the Council of Europe Member States, capable of processing petitions in specific languages and keeping abreast on national laws. The ECtHR also counts on two specialized language divisions, one for French and one for English, whose responsibilities are to verify the linguistic quality of judgments and decisions selected for publication in the court’s official reports. The majority of the judgments are no longer issued in French and English, but only in the language in which they were drafted – either French or English. Only those judgments chosen for publication in the reports are translated into the court’s second official language.14 These select cases are processed bilingually from the outset, with translators playing a crucial role, sitting in on deliberations to assist with the translation of any proposed modification of the court’s opinion.15 This summary list of the general tasks and responsibilities afforded to the support personnel highlights their involvement at every point of the decisionmaking process.

12 13

14

15

See McAuliffe, this volume. Lawyer-linguists routinely provide indirect legal advice, conducting background legal research on the jurisdiction(s) from which a text originates or on the jurisdiction(s) for which the translation is intended. On the impact of translations on the substance of the case law, see generally Karen McAuliffe, Language and Law in the European Union: The Multilingual Jurisprudence of the ECJ, in The Oxford Handbook of Language and Law (Peter M. Tiersma & Lawrence M. Solan, eds 2012) 200. See ECtHR Rules of Court, Rule 76. See also James Brannan, Le rôle du traducteur à la Cour européenne des droits de l’homme, 202 Traduire, 25, 33 (2009). The court’s most solemn panel, the seventeen-judge Grand Chamber, however, always issues judgments in the two languages. See Martin Weston, Characteristics and Constraints of Producing Bilingual Judgments: The Example of the European Court of Human Rights, in Jurilinguistique: entre langues et droits 445 (Jean-Claude Gémar & Nicholas Kasirer, eds.) (2005).

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Hierarchy The European courts’ hierarchical arrangements are complex, providing a differentiated structure of authority. Three types of hierarchical relationships can be identified: staff-staff, judge-staff and judge-judge. Staff-Staff The strongest form of hierarchical work organization creeps in via the staff, which is characterized by standardized hiring procedures, responsibilities and qualifications, and is subject to a chain of command. At both courts, appointments and promotions are formalized, with specific titles and tasks, which come from the position assigned to them. Salaries are tied to a pay grade system, with all employees in a certain grade earning similar salaries. At the ECtHR, staffers are employees of the Council of Europe and divided into four categories. Each level controls the level below and is controlled by the level above. A “registrar,” assisted by a deputy registrar, supervises the registry itself.16 At the Luxembourg court, chambers function as autonomous units. The référendaires are not fonctionnaires; they are hired by and report directly to their judge or AG. But their position and salary is defined on a European civil service grid, graded at the level of a head of unit. Other CJEU staffers such as lawyers-linguists are typically permanent members of the European civil service, subject to its rules and division in different function groups and grades. The CJEU too uses a registrar, whose responsibilities include “the management of the staff and the administration” as well as “the preparation and implantation of the budget.”17 The workflow tends to be rationalized with routine operating tasks and quality-control mechanisms. At the ECtHR, junior registry lawyers prepare cases under the supervision of more experienced lawyers, themselves checked by section registrars or deputy registrars. As a division chief explained, I manage the entire thing, it’s a well-oiled machine. . . . Clearly the most experienced lawyers who have an indefinite contract . . . handle the hardest cases . . . and supervise younger lawyers who begin with the simplest cases and handle correspondence. It’s a system of hierarchy and supervision, especially for newcomers. . . . In our jargon we call the permanent lawyers “A lawyers” and “B lawyers” those who are on a fixed-term contract.18

16 17 18

Judges elect the registrar. See ECtHR Rules of Court, Rule 15(1) & (3). CJEU Rules of Procedure, Art. 18 & 20. Interview with W, registry lawyer at the ECtHR since the mid 1990s. (July 8, 2014) (my translation).

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A similar pattern can be observed at the CJEU, particularly for linguistic tasks. Language units are presided over by chiefs and deputy chiefs overseeing the lawyer-linguists’ work and themselves reporting to the court’s chief administrative and judicial officers.19 According to one of the linguistic units’ chiefs, all translation “requests are sent by the registry to the central services of the Translation Directorate-General, which centralizes requests, sends us roadmaps identifying the case, and assigns a deadline.”20 Within each unit, the translation job is assigned to a junior lawyer-linguist under the control of more experienced lawyer-linguists, sometimes referred to as “revisers.” As another lawyer-linguist told me, the reviser “reads your translation in order to check that you didn’t miss anything or you didn’t misunderstand anything. If you’re at the beginning you have a proper mentor.”21 Judge-Staff The strongest form of judge-staff hierarchy is that which transpires between CJEU court members and their référendaires. Référendaires are directly recruited by and serve at the pleasure of their judge or AG. Other staffers are more insulated from judges or AGs, working for the institution as a whole rather than exclusively assisting a particular court member. At the ECtHR, the judge-staff hierarchy is weaker than that at the CJEU. The non-judicial personnel forms its own corps, hired and promoted quite independently from judges. Not being assigned to particular court members, individual registry lawyers operate under the loose supervision of the rotating judges with whom they are teamed up for the purpose of deciding certain cases. At both courts, judges are akin to quality control inspectors. Due to high caseloads, they rarely read the entire case files or draft opinions.22 Rather, they supervise the work of their subordinates. Référendaires or registry lawyers propose case dispositions and reasoning; judges revise, challenge or accept. Each judge has more or less individualized methods of control, from those scrutinizing the staff’s work product from A to Z, including translations, to those focusing their review on select aspects of a case. While there is also considerable variation among ECtHR judges’ work habits, a common theme seems to be, as a senior registry lawyer reports, that they typically intervene in the life of a case, if at all, toward the end of a series of quality-control checks. 19 20

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See McAuliffe, this volume. Interview with RY, lawyer-linguist at the CJUE since the late 1990s (July 2, 2014) (my translation). Interview with D, lawyer-linguist at the CJEU since the early 2000s (July 2, 2014). See de Silvia, supra note 11 at 338.

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Judge-Judge In principle, there is no hierarchy among judges on multimember courts. They share equal decision-making authority and are not subject to discipline, demotion or removal. Sitting at courts of last resort, European judges’ decisions cannot even be reversed. Accordingly, relationships among judges present the weakest form of hierarchy. That said, the European courts’ leaderships arguably exercise more power than other court members. While all courts have chiefs, the CJEU and the ECtHR’s leaders enjoy particularly wide administrative and judicial powers, making them more than equals among equals.23 At both courts, the presidency is divided between a court president and one or more deputies. The CJEU uses a dual leadership structure; because of the president’s increasing range of responsibilities, the office of the vice-president was created in 2012.24 At the ECtHR, a “Bureau” chaired by the president leads the court, which includes each of the five sections’ presidents (two of which also serve as the court’s vice-presidents), the registrar and the two deputy registrars.25 According to former Judge Loukis Loucaides, during my time the “Bureau” examined and provided solutions to problems and matters concerning the administration of the Court’s work. Although it lacks any legal basis in the Convention its decisions have a de facto binding effect. It does not account in a transparent and open way to the other judges. Nonetheless, it behaves as the highest administrative authority of the Court.26

The precise functions and powers of the courts’ governing bodies are not exhaustively laid out in their internal rules, but include a few significant prerogatives. At the CJEU, the president and the vice-president are the only permanent members of the Grand Chamber – the court’s fifteen-judge

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Unlike national courts of last resorts, European high courts lack Departments of Justice, Ministers of Justice or Attorney Generals to lobby on their behalf for larger budgets, to hire and train the court personnel, to manage their careers, etc. The courts’ presidents and registrars must do it all. See Regulation (EU, Euratom) No. 741/2012 of the European Parliament and of the Council amending the Protocol on the Statute of the Court of Justice of the European Union and Annex I, (2012) O.J. L 228/1, 3rd recital. See also CJEU Rules of Procedure, Art. 10(3). Both are elected for three years by the judges among their number. See ECtHR Rules of Court, Rule 9A. Loukis G. Loucaides, Reflections of a Former European Court of Human Rights Judge on his Experiences as a Judge, 1 Roma Rights. Implementation of Judgments 62 (2010).

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plenary session – while other judges rotate.27 Likewise, at the ECtHR, the president of the court and the presidents of the five sections sit ex officio on the seventeen-judge Grand Chamber.28 A recent empirical study based on the Israeli Supreme Court indicates that multimember courts may be subject to a “presiding justice effect” whereby judges who preside over panels are more likely to vote in their preferred direction and non-presiding judges defer more to a colleague’s view when he or she is presiding.29 Transposed to the European context, this finding suggests that presidents may have greater opportunities to influence their colleagues and make an imprint upon the law, especially considering that they sit as of right on the Grand Chamber, which decides the most important and high visibility cases. Presidents enjoy another unique opportunity for influence through their role in allocating judges to the courts’ various panels (known as “sections” at the ECtHR and “chambers” at the CJEU). At either court, the president “proposes” the composition of the panels that will remain identical for a period of three years.30 In addition, the CJEU president and vice-president select the juge rapporteur for each case.31 At the ECtHR the distribution of cases to juge rapporteurs is the province of the registry, except for important or sensitive cases, in which the Bureau appears to be involved. These assignments have a significant agenda-setting effect given that the identity of a juge rapporteur and the composition of a panel significantly affect the court’s product. The breadth and depth of any given decision often depend upon the juge rapporteur’s views as well as other panel members’ willingness to go along with him or her.

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See Koen Lenaerts, Ignace Maselis & Kathleen Gutman, EU Procedural Law 20 (2014). See ECtHR Rules of Court, Rule 24 and European Convention on Human Rights, Article 26(5). See Theodore Eisenberg, Talia Fisher & Issi Rosen-Zvi, Group Decision Making on Appellate Panels: Presiding Justice and Opinion Influence in the Israel Supreme Court, 19 Psych. Pub. Pol’y & L. 282 (2013). For the CJEU, see David Edward, How the Court of Justice Works, Eur. L. Rev., 539, 542–43 (1995). Most frequently the court sits in five-judge chambers, but it occasionally uses threejudge chambers or the fifteen-judge Grand Chamber when a Member State or an EU institution that is a party to the proceedings so requests, or when the court considers that a case has a particularly important value as a precedent. See also CJEU Rules of Procedure, Art. 60(1). For the ECtHR, see ECtHR Rules of the Court, Rule 25. Note that at the ECtHR, the president’s proposal is constrained by rules requiring geographical as well as gender balance among judges on each section. See Andrew Drzemczewski, The Internal Organisation of the European Court of Human Rights: The Composition of Chambers and the Grand Chamber, 3 Eur. Hum. Rts. L. Rev. 233, 236–37 (2000). See CJEU Rules of Procedure, Art. 15.

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Uniformity Supranational courts’ decisions need to be drafted in a style and tone likely to persuade national officials, judges, lawyers and the European public generally.32 As Sally Kenney has argued about the CJEU, consistency is key to ensure compliance and legitimacy in multiple jurisdictions.33 Accordingly, institutional techniques are in place to standardize the decision process at both courts, reinforcing the impression of a bureaucratic apparatus. Judgment Uniformity The CJEU and the ECtHR deploy concerted efforts to produce uniform judgments following established templates. As a lawyer-linguist at the CJEU indicated, “the court always has the same way of expressing itself and every unit is in some ways the guardian of these rules of written expression and you need a greater formal rigor.”34 A lawyer for the ECtHR’s registry described a similar approach: “[W]e have templates and models when we write draft decisions and draft judgments.”35 Another ECtHR lawyer pointed out that the court uses automated forms with fill-in fields to guarantee uniformity: “[W]hen we begin drafting, we fill out a judgment skeleton [sic] which is ready-made. Some phrases are repeated, repetitive, and those are always in there.”36 In addition, the two courts have designated staff members tasked with verifying compliance with the court’s legal and linguistic standards: the “jurisconsult” at the ECtHR and the “lecteurs d’arrêt” at the CJEU.37 Since the early 2000s, a group of registry lawyers known as the jurisconsult and their team are responsible for monitoring the court’s rulings and preventing conflicting case law.38 The ECtHR sits as panels rather than 32

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The two courts must rely on national institutions to carry out their rulings. See de Silvia, supra note 11 at 334–35 (discussing the difficulties of executing ECtHR judgments). See Sally J. Kenney, Beyond Principals and Agents: Seeing Courts as Organizations by Comparing Référendaires at the European Court of Justice and Law Clerks at the U.S. Supreme Court, 33 Comp. Legal Stud. 593, 596 (2000). Interview with RY, former référendaire and lawyer-linguist at the CJUE since the late 1990s (July 2, 2014) (my translation). See also McAuliffe, this volume. Interview with W, registry lawyer at the ECtHR since the mid-1990s (July 8, 2014) (my translation). Interview with M, registry lawyer at the ECtHR since the mid-1990s (June 14, 2011) (my translation). See Vauchez, this volume. The Court created the office of jurisconsult in 2001. The mission of advancing the coherence of the case law was previously carried out by the registrar, but with growing caseloads the court administration felt necessary to create a dedicated unit. Additionally,

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in plenary sessions; cases are heard either by a single judge, a three-judge committee, a seven-judge chamber or, exceptionally, by the Grand Chamber.39 Because of these multiple configurations, there is an endemic concern that different panels will develop as seemingly independent courts within the court. To prevent intra-court splits, the jurisconsult’s team plays a coordination role across panels. The team meets weekly to review the cases on the docket, scrutinizing all draft opinions for consistency with precedents. The jurisconsult has the authority to intervene at any time in the opiniondrafting process if a departure is spotted. Several options are available. The jurisconsult can initiate a discussion with the lawyer and the reporting judge responsible for the case, alerting them to the discrepancy. They can include a note on the problematic case in their weekly e-mail to judges and registry members, banking on the naming-and-shaming effect. Should these actions fail to elicit the desired response, more drastic means can be employed, such as withdrawing the case from the panel and reassigning it to a different one.40 In comparison, and in part due to its smaller size and caseload, the CJEU appears more preoccupied with linguistic uniformity than intra-court splits.41 The court includes staffers known in French as the lecteurs d’arrêt – which literally means judgment readers – whose task is to ensure consistent language and style throughout opinions.42 The lecteurs d’arrêt are native French speakers who proofread and revise judgments with an eye for consistency of style and terminology, performing a two-step check. Before the juge rapporteur circulates their draft to other panel members, the lecteurs d’arrêt perform a first round of edits. The second round takes place after the panel deliberates and adopts a final judgment. While mainly stylistic, this review may have

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since 2005, the “Case-Law Conflict Prevention Group,” a special committee composed of the President of the Court and each section’s presidents, has met to ensure consistency in the case law. The Grand Chamber, the court’s largest panel, which decides the most high profile cases, is made up of seventeen judges. To complete this legal uniformity check, the court has recently created a special “language check” unit (“contrôle linguistique”), staffed with proofreaders who oversee the linguistic uniformity of the most important judgments. The ECtHR language check unit was created in 2007 and is mostly staffed by professional translators who do not necessarily have a legal background. Their task is mainly linguistic, even though staff lawyers report occasionally getting feedback which affects the substance of the case. See Brannan, supra note 14 at 28. See McAuliffe, this volume. The lecteurs d’arrêt are usually junior French or Belgium judges posted in Luxembourg for a term of years. French Judge Roger Grass who served as a référendaire, a lecteur d’arrêt, and the CJEU’s registrar from 1994 until 2006 created the function in 1980. They carry all the more weight that they are headquartered in the president’s chambers.

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repercussions on substance.43 The lecteurs d’arrêt are accomplished lawyers, often French or Belgian judges on secondment. As such, they occasionally detect inconsistencies pertaining to substance and recommend changes which may impinge upon the court’s reasoning.44 Staff Uniformity The European courts draw judges, référendaires, lawyers, translators and other personnel from a variety of national educational and professional training patterns.45 In recent years, the courts have sought to foster their employees’ acculturation into a common work culture and drafting conventions through a variety of programs. For a long time judges and other staff members relied on informal networks to familiarize themselves with the court’s case law and writing style. Nowadays, training mechanisms and formal communication systems are in place to disseminate and reinforce norms and expectations. The ECtHR provides a formal orientation for newcomers, as well as continuing educational opportunities, including language courses, IT trainings and lecture series on topics related to the case law. At the CJEU, the president’s cabinet puts together lectures on the court’s functioning and the handling of cases for incoming référendaires. Lawyer-linguists are initiated through a series of workshops. As one of the staff members in charge of the training reported, “when they come here they have a general training, how it works from the IT point of view, you know we have a certain structure for the documents, which we call ‘canvas,’ and they have to learn how to use all the databases that we use here.”46 This section has argued that the two European high courts follow a number of patterns typical of bureaucratic organizations. The next section aims at unpacking the supranational context in which these bureaucratic practices unfold on a daily basis. 43 44

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See McAuliffe, this volume. See Roger Grass, Les ressources humaines à la Cour de Justice des Communautés européennes in Me´langes en l’honneur de Philippe Le´ger: le droit a` la mesure de l’homme 69, 73 (2006). As Antoine Vauchez has argued, international courts “cannot count on the existence of a supranational judicial profession because there is no such thing as a supranational body competent for setting common educational requirement, nor is there an identified breeding ground from which international courts could select and recruit their members.” See Antoine Vauchez, Communities of International Litigators in Handbook of International Adjudication (Cesare Romano, Karen Alter & Yuval Shany, eds 2014) 656, 658. This claim should be nuanced in the case of the CJEU and the ECtHR, which have built a community of professionals around their courts as I argue in the third section of this chapter. Interview with D, lawyer-linguist at the CJEU since the early 2000s (July 2, 2014).

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explaining bureaucratization Two sets of considerations explain the European courts’ high level of bureaucratization. The first relates to institutional design and the structure of judicial tenures. The second pertains to various asymmetries enduring between judges and the rest of the staff. Taken together, they raise the question whether judges are hostages to the bureaucracy.

Staff and Judicial Tenure A common model for domestic courts of last resort is for judges to enjoy long tenures and run their court freely while subordinated, non-judicial personnel assist them for fixed terms.47 At the two European courts, this modus operandi is somewhat reversed. The judicial turnover is relatively high, while a large proportion of the staff takes root, laying the ground for a potential staff capture. CJEU CJEU judges and AGs hold office for a renewable term of six years. During the early days of the court, the judicial personnel were remarkably stable, with some judges serving for up to twenty years.48 This changed since the 1980s, especially with the successive enlargements of the European Union. Référendaires followed the opposite trajectory. The first référendaires commonly spent their entire career at the court, occasionally “outliving” their judge and staying on after their judge’s appointment expired to work for another cabinet. Sally Kenney thus wrote in 2000: During the first two decades, each member had one référendaire who was a permanent employee. Each new member would thus inherit his or her successor’s référendaire. The 2 longest-serving référendaires served 34 years each. The legendary Karl Wolf served 33 years, retiring in 1991. Two other 47

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Anglo-American and commonwealth high courts often combine life tenure for judges with the employment of recent law graduates as clerks for short-term appointments. Justices of the Supreme Court of the United States enjoy life tenure without any restriction, and a number of high courts use life appointment with a mandatory retirement age, e.g., the Canadian Supreme Court (75), the UK Supreme Court (70), the Israeli Supreme Court (70), and the High Court of Australia (70). Judges enjoy non-renewable twelve-year terms at the German Constitutional Court as well as the South African Constitutional Court. See Antoine Vauchez, À quoi «tient» la cour de justice des communautés européennes? Stratégies commémoratives et esprit de corps transnational, 60 Revue Franc¸aise de science politique 247, 252 (2010).

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so-called permanent référendaires served 25 years and 23 years, respectively. Between 1970 and 1972, members freed themselves from, as one member put it, “the burden of inheriting their predecessor’s référendaire.”49

These career appointments have given way to term appointments, with terms of office becoming shorter but still significantly longer than at domestic supreme and constitutional courts using term clerks.50 While référendaires’ tenures have shortened over the past decades, the rest of the staff, in particular lawyer-linguists, have usually retained their permanent or at least long-term status. By and large, the CJEU remains characterized by the “exceptional stability of ‘internal’ actors.”51 In contrast, judges and AGs may appear to be temporary passengers. ECtHR The split between a relatively high judicial turnover and staff longevity is particularly pronounced at the ECtHR, which only became a permanent court since 1998.52 In the court’s early years, when their terms were renewable, judges served for longer terms, sometimes up to twenty years like their Luxembourg counterparts. They maintained activities in their home countries, however, and few resided in Strasbourg.53 Tellingly, they did not earn a salary, receiving instead a per diem allowance and travel reimbursement.54 Times have changed: in their application, candidates for judgeships must now respond to the following question: “Please confirm that you will take up permanent residence in Strasbourg if elected a judge on the Court.”55

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See Kenney, supra note 33 at 605. Paolo Gori (1958–1978) and Roger-Michel Chevallier (1959–1982) top the list of longest-serving clerks. See Vauchez, supra note 48 at 252. There are variations across cabinets. British and Irish référendaires rarely serve more than a couple years due to professional reasons; they can count on more prestigious and financially rewarding career choices back home as soon as they move on. See Vauchez, supra note 48 at 252 (pointing out to the case of the court’s registrar, the Belgian von Houtte, who stayed in office close to thirty years [1953–1982]). Protocol 11, which came into effect on November 1, 1998, set up a single permanent court in place of the original two-tier system of a court and a commission, both of which sat on a parttime basis. See Stéphanie Hennette-Vauchez, L’Europe au service (du droit) des droits de l’homme. Réalité politique, entreprise savant et autonomisation d’une branche du droit, 89 Politix 57, 65 (2010). See Council of Europe, The European Court of Human Rights – Facts and Figures 53 (2011). See Council of Europe, Parliamentary Assembly 1999 Ordinary Session (Fourth Part) Doc. 8460 at 27 (September 20–24, 1999).

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Despite this new stationary status, according to one of the judges I interviewed, judges still lack the stability and know-how enjoyed by the non-judicial personnel: That’s another problem of independence because the bureaucracy has continuity. When [new Judge ***] comes here, it will take him at least three years to begin to see the ropes. This is completely stupid. Very European if I may say so. The appointments here are to be lifetime . . . You cannot have an independence of the European court if the judges are changed every nine years now, before, they were up for reelection every six years.56

The judge was referring to Protocol 14, which amended the rules governing judicial tenures.57 In place of six-year, renewable terms like their CJEU counterparts, ECtHR judges now face a non-renewable term of nine years, resulting in an increased turnover.58 While there is no retirement age at the CJEU, the ECtHR imposes a mandatory retirement age of seventy,59 which means that some judges have not been able to finish their term.60 In contrast, about half of the ECtHR registry lawyers are hired on a permanent basis as functionaries of the Council of Europe, often spending their entire career at the court. The rest of the registry’s staff is employed on short-term contracts through the assistant lawyers’ scheme.61 Similar to the CJEU, there are historical registry figures who played key roles in the court’s development and symbolize the personnel’s permanence. These include the likes of Michele de Salvia, who worked for the court in its different manifestations for more than thirty years, serving as its registrar and jurisconsult, or Paul Mahoney, who worked for the Council of Europe in various capacities for thirty-one years, including as the registrar and currently as the British judge. The personnel’s constancy relative to judges’ mobility arguably gives staffers a leg up. As Stéphanie Cartier and Cristina Hoss have argued about registries of international courts more generally, they are the “custodians of the

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Interview with S, judge at the ECtHR since the late 1990s (January 7, 2011) (my translation). The Council of Europe’s Committee of Ministers adopted Protocol 14 in May of 2004 and it entered in force in 2010. See Art. 23(1) ECHR. Under the prior regimes, judges were elected for a six-year renewable term. Article 23(3) of ECHR, as amended by Protocol 11. A recent example is Swiss Judge Giorgio Malinverni, who was elected at the age of sixty-six and served only four years (2007–2011) prior to retiring. See generally Andrew Drzemczewski, Election of Judges to the Strasbourg Court: An Overview, 4 Eur. Hum. Rts. L. Rev. 377 (2010). They are offered an initial one-year contract, which may, depending on their performance, be extended up to a maximum of four years.

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‘institutional memory’” of their institution given that “[i]n many judicial bodies the RLS [Registries and Legal Secretariats] will be the only permanent institution of that particular body.”62 The CJEU and the ECtHR’s personnel provide not only continuity as court members change but also essential knowhow in terms of internal organizational culture, legal expertise and linguistic proficiency.

Asymmetries: Culture, Law, Language While judges come and go, the support personnel provides a backdrop of consistency. This distinction, along with the cultural, legal and linguistic differences coexisting at the European courts, creates knowledge asymmetries between judges and staffers. Judges are drawn from the judiciaries of Member States, private practice, political office and academia. Unlike their counterparts at domestic high courts, they rarely share a preexisting work culture, a common field of legal expertise or a native language. They may have very different expectation as to how judgments should be produced and structured. Not all are expert in EU or European human rights law.63 Moreover, a great deal of CJEU and ECtHR judges’ work involves interpreting and analyzing Member States’ legal systems. There are only so many jurisdictions a single judge can be familiar with in addition to his or her own. Finally, court members not only lack a common native tongue; they also may be unevenly proficient in their court’s working languages – French at the CJEU and French and English at the ECtHR.64 Against this backdrop, the court staff provides a source of collective knowledge, which represents both a resource and a threat for judges. The staff is just as diverse a group as the judges, but thanks to their long tenures, staffers know their institution better. Moreover, they are often subject matter experts in specific areas of the law and usually have superior linguistic skills.65 These 62

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Stéphanie Cartier & Cristina Hoss, The Role of Registries and Legal Secretariats in International Judicial Institutions, in Oxford Handbook of International Adjudication 711, 721 (Cesare Romano, Karen Alter & Yuval Shany, eds 2013). This is particularly likely for judges coming from countries that have only recently joined the European Union or the Council of Europe and, therefore, can only rely on a small pool of domestic judges, academics or professionals trained in EU law or European human rights law. See McAuliffe, this volume. See Paul L. McKaskle, The European Court of Human Rights: What It Is, How It Works, and Its Future, 40 U.S.F. L. Rev. 1, 28 (2005) (raising the problem of registrar’s power due to judges’ language deficiencies). See also Norbert Paul Engel, More Transparency and Governmental Loyalty for Maintaining Professional Quality in the Election of Judges to the European Court

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asymmetries may tip the balance of power in favour of the staff in a way that is unparalleled in national high courts. As Michele de Salvia, who served as the ECtHR’s registrar from 1998 to 2000, notes, [T]he documents contained in the case files may have been drafted in languages and pertain to legal systems about which the assigned judge may not have specific knowledge. . . . The caseloads and the importance of the cases, often very voluminous are such that in practice the judge alone cannot possibly master the facts and arguments submitted to his scrutiny. The judge, therefore, needs the assistance of lawyers whose functions go beyond those normally required by judicial assistants in a purely domestic context.66

Language plays a particularly important role in this story.67 As judges working in a multilingual environment, CJEU and ECtHR judges must relinquish some of the control domestic judges enjoy over the wording of their opinions. One of my interviewees, who successively worked at the CJEU as a lecteur d’arrêt and a référendaire in the mid-2000s, thought that long-term référendaires exert some measure of undue influence upon their judges: There are old référendaires who have 20 to 25 years of experience and will no longer take editing suggestions. You can send them edits and when it [the draft judgment] comes back, they haven’t picked up any. As a result, the judge isn’t aware [of the editing suggestions] because he has so much trust in his référendaire.68

This power dynamic is also at play at the ECtHR where judges are somewhat removed from the registry lawyers’ recruitment and monitoring process and thus, perhaps, less likely to be in a position to control them. As a judge confided, judges’ detachment from the registry gives rise to the perception, if not the reality, that the court is run by the registry rather than by the judges.69 Another judge echoed this charge, lamenting that “[i]f you have a juge rapporteur who does not speak the language or that is not well oriented in the situation or the legal system of the country, it means the registry practically decides the case and the judge has very limited possibility to control it.”70

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of Human Rights, 32 Human Rts. L.J. 448 (2012) (recounting at 452 that “[a]t the old Court, it was once discovered that five judges were unable to speak to one another without an interpreter, as they only mastered one of the two official language”). 67 See de Silvia, supra note 11 at 335. See McAuliffe, this volume. Interview with N, former lecteur d’arrêt and later référendaire at the CJEU in the 2000s (July 7, 2014) (my translation). Interview with S, judge at the ECtHR since the late 1990s (January 7, 2011) (my translation). Interview with L.L., judge at ECtHR in the 2000s (January 7, 2011).

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The supranational character of the CJEU and the ECtHR, because of the knowledge asymmetries it creates, is a particularly powerful factor in explaining their bureaucratization. Institutional design has a significant impact as well; CJEU judges appear less subject to a staff capture than ECtHR judges in part because they control the hiring and retention of their référendaires. Going forward, one of the questions facing the two European courts is whether the growing trend for judges and staffers to be drawn from a common pool of professionals will exacerbate their bureaucratization or, instead, foster informality and autonomy.

interchangeable bureaucrats or autonomous professionals? This section focuses on the circulation of judges between national judiciaries and the European courts on the one hand and the circulation of individuals between European courts’ staff positions and judgeships on the other.

When the Bureaucrats Are Judges A significant proportion of the CJEU and the ECtHR’s staffers, especially the lecteurs d’arrêt, référendaires and registry lawyers, are likely to be members of the judiciary in their home countries. I do not have precise figures on the extent of the phenomenon, as quantitative data on the European courts’ staff is difficult to obtain. Information regarding judges is readily available because their bios and CVs are published at the time of their appointment and accessible on the courts’ websites. In contrast, very little is known about the staff.71 The CJEU référendaires’ alumni association used to publish a yearly Bulletin, the Bulletin de l’Amicale des référendaires et anciens référendaires de la Cour, which offered a treasure trove of information. Based on the Bulletins published between 1997 and 2001, Antoine Vauchez was able to establish that thirteen of the seventy-seven référendaires recruited during that period were judges in their country of origin.72 I lack a similar data point regarding the 71

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Judges’ attitudes may explain this situation. They may be wary of disclosing that information because it would be acknowledging the importance of the staff in the decision-making process. More likely, however, the courts do not see the non-judicial personnel as a topic of public interest. (It does not help that the European regulations of personal data would require contacting each individual staffer before publicly disclosing personal information such as their professional and educational backgrounds.) See Vauchez, supra note 51 at 255. Unfortunately, the association discontinued its publication after 2001.

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lecteurs d’arrêt, but according to two of the interviewees I talked to, their group of about seven “is predominantly composed of French private law and public law judges, with sometimes a few French academics. There are also always one or two francophone Belgians.”73 Until recently, registry lawyers at the ECtHR were not enlisted among national judges, but the court has developed a pattern of hiring national judges on temporary assignments. A registry division head thus explained: “[S]ince a few years ago we have judges on secondment from the different Member States, who work with our divisions for one, two, or three years. For example at this time, in my division, I have three judges from ***.”74 I have not been able to find out how many domestic judges the court currently employs, but if every one of the thirty-two registry divisions counts at least a couple, there could be as many as sixty. The arrangement is mutually beneficial. The court has much to gain from the judges’ fresh knowledge of and insider’s perspective on their legal system. In turn, the domestic judges dispatched to Strasbourg benefit from a firsthand experience with European human rights law. This exposure can prove advantageous upon their return in furthering their understanding of the ECtHR jurisprudence and may be the basis for a promotion. If a substantial part of the CJEU and the ECtHR staffers are themselves judges, does the dichotomy between the courts’ judicial and non-judicial personnel still hold? In other words, does being a former judge make one less of a bureaucrat? The answer probably depends both on the work these domestic judges perform at the European courts and on their national judicial cultures. As for the first consideration, nothing seems to distinguish the domestic judges from the rest of the staff. According to the ECtHR registry division head quoted earlier, the judges on secondment “work like all other lawyers, they are fully integrated in the division, they have a special status, but in reality they are members of the division and work like any other lawyer. They prepare judgment and decision drafts and manage the correspondence.”75 As for the second factor, while common law judges are typically appointed “from among practicing advocates at the height of their

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Interview with M., judge at the CJEU since the early 2000s (July 2, 2014) (my translation). See also Interview with N, former lecteur d’arrêt and later référendaire at the CJEU in the 2000s (July 7, 2014). Interview with W, registry lawyer at the ECtHR since the mid-1990s (July 8, 2014) (my translation). Interview with W, registry lawyer at the ECtHR since the mid-1990s (July 8, 2014) (my translation).

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reputation,”76 there are substantial similarities between the recruitment of most continental judges and that of bureaucrats. Continental judges typically follow the career path of a civil servant, entering the judiciary “at the beginning of [their] professional life”77 and serving among large numbers of other career civil service judges. In sum, the domestic judges working the European courts tend to serve in a support role and originate from bureaucratic judicial cultures. They are thus presumably more likely to contribute to bureaucratization rather than resisting it.

When the Judges Are Bureaucrats There is a small yet developing trend for European judges to be selected from among their court’s own ranks, i.e., either among the pool of former référendaires at the CJEU or that of registry lawyers at the ECtHR. The phenomenon first began in the late 1980s at the CJEU. In 1988, when he was appointed an advocate general, Francis Jacobs was the first court member who had previously served as a référendaire. Since then more have followed in his footsteps.78 Currently, four of the twenty-eight judges and nine AGs formerly worked as référendaires and one as an intern.79 With the creation of the first-instance tribunal in 1988 and the civil service tribunal in 2005, clerkship opportunities have multiplied at the Luxembourg courts, allowing for a new career path to develop. According to the CJEU’s former registrar, Roger Grass, in 2006, one-fifth of the sixty-five judges comprising the three Luxembourg courts had previously served as référendaires at one of the courts.80 The trajectory from référendaire to judge or advocate general is just one aspect of this developing professional endogamy. Prior to joining the CJEU, a number of court members already held positions within the European Union or the Council of Europe, ranging from those who had been judges at the general court or community officials 76

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Rene´ David & John E.C. Brierley, Major Legal Systems in the World Today: An Introduction to the Comparative Study of Law 127 (2d ed. 1978). Id. For instance, Danish Claus Christian Gulmann was a référendaire for Judge Max Sorensen before serving as an advocate general (1991–1994) and then a judge (1994–2006); Dutch Christiaan Timmermans was a référendaire from 1966 to 1969 before serving as a judge from 2000 to 2010; Dutch Leendert Geelhoed was a référendaire from 1971 to 1974 before returning to the court as an AG from 2000 to 2006; and Italian Antonio Saggio was a référendaire from 1979 to 1984 prior to being an AG from 1998 to 2000. These are Judge Jean-Claude Bonichot, Vice-President Koen Lenaert, Judge Alexandra Prechal, Judge Marek Safjan and Advocate General Eleanor Sharpston. See Grass, supra note 44 at 72.

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such as legal advisers at the European commission to members of the European Parliament and those who were ECtHR judges. At the ECtHR, out of the forty-seven currently sitting judges, seventeen had previously worked for the Council of Europe in different capacities, ranging from registry lawyers to ad hoc judges to members of various Council of Europe commissions.81 A prominent example is the 2012 election of British Judge Paul Mahoney, who had worked for thirty-one years in various posts at the ECtHR, including as the court’s registrar, and who had also served as judge and president of the civil service tribunal in Luxembourg. Judges from newer Member States are less likely to have held a position at the Council of Europe, but there are exceptions. For instance, the sitting Ukrainian judge, Ganna Yudkivska, was elected in 2009 after having worked as a registry lawyer for two years. This recruitment pattern has become controversial both inside and outside the court for exacerbating the court’s bureaucratization. The Daily Mail called Mahoney a “Eurocrat” and announced his election with the following headline “Meet our new Euro human rights judge . . . who’s not even a real judge: Top Strasbourg job for man who’s never sat in a British court.”82 The British tabloid’s appraisal has been echoed, albeit not in so many words, by academic commentators describing the rise of a European “juristocracy,”83 and pointing out the democratic deficit of transnational education and careers leading to European judgeships.84 But does the growing professional endogamy observable at the European courts work to reinforce or undermine the courts’ bureaucratism? The assumption seems to be that it leads to further bureaucratization.85 For instance, looking at the Luxembourg court, Sally Kenney worries that expanding an institution’s staff “may diminish [its] deliberative capacity” and its ability “as a whole to reach a compromise.”86 81

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The seventeen judges are Guido Raimondi, Ineta Ziemele, Mark Villiger, Päivi Hirvelä, Mirjana Lazarova Trajkovska, Nebojša Vučinić, Kristina Pardalos, Ganna Yudkivska, Vincent De Gaetano, Angelika Nussberger, Julia Laffranque, Paulo Pinto de Albuquerque, Helena Jäderblom, Paul Mahoney, Faris Vehabović, Robert Spano and Iulia Motoc. James Slack, Meet our new Euro human rights judge ... who’s not even a real judge: Top Strasbourg job for man who’s never sat in a British court, Daily Mail (June 27, 2012). The term originates from Ran Hirschl, Towards Juristocracy: The Origins and Consequences of the New Constitutionalism (2004). See Vauchez, supra note 48 at 252. Erik Voeten, for example, noted that “ECtHR judges whose previous careers were primarily as diplomats or bureaucrats are significantly less activist than are judges with other previous career tracks.” See Erik Voeten, Politics, Judicial Behaviour, and Institutional Design, in The European Court of Human Rights between Law and Politics 61, 66 (Jonas Christoffersen & Mikael R. Madsen eds 2011). See Kenney, supra note 33 at 595–596.

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While my purpose is neither to defend nor to disparage the European courts’ hiring practices, bureaucratization and large staffs do not necessarily lead to failures of deliberation and compromise. Tenure and insider knowledge can be sources of power for judges just as they are for staffers. Much like long-term staffers can take advantage of the various asymmetries at play in supranational courts to exert some measure of influence on judges, judges who formerly worked in support role can use their bureaucratic knowledge to push their agenda and keep the staff in checks. Having learned the ropes of the institution, former bureaucrat judges are presumably in a better position to avert a staff capture. There may be further benefits to the fluidity between judgeships and support positions. Shared experiences may also produce greater epistemic equality – if not social and professional equality – furthering the judges and the staff’s capacity to engage in identity switching and thus cultivating collaborative rather than hierarchical rapports. In sum, an optimistic view of European judges’ increasing interconnection with staffers is that rather than generating a corps of interchangeable bureaucrats, it may constitute a pool of autonomous court professionals better able to engage in high-level decisionmaking and deliberation.

conclusion European judges are not hostages. They are judges working in an increasingly bureaucratic international environment. A court’s supranational character may affect its resemblance to a bureaucracy in a way that is either lacking or less powerful at the domestic level. This difference is due to the fact that international judges speak different languages, serve for limited terms, have varied legal trainings and professional experiences and are unevenly versed in the laws they are tasked with applying and developing. Against this variable backdrop, staffers naturally become a stabilizing force and a repository for court practices. The examples of the CJEU and the ECtHR suggest that over time some degree of professional endogamy may develop among the judicial and the non-judicial personnel, blurring boundaries in a way that could either reinforce or undermine judges’ potential capture to the staff. The importance of courts’ support personnel has implications not only for the legitimacy of judicial appointments but also for that of the staff’s recruitment. On the one hand, accepting the benefits of bureaucratization diminishes concerns over judicial selection. If court staffers provide the backbone for the courts’ outputs and institutional memory, individual judges’

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idiosyncrasies matter less than ordinarily assumed. The current anguish over judicial appointments at the ECtHR, for example, may be overblown. That a few judges fail to meet expectations for “the highest possible calibre”87 may not compromise the court’s quality and productivity thanks to the registry’s dependability. On the other hand, if one properly understands the complicated and fluid aspects of the courts’ bureaucracy, recommendations for appointments for judges as well as staffers are likely to change. Critics of the European courts’ democratic deficit tend to focus on judges. A more nuanced and holistic understanding of the courts, taking into account the staff and its prominent role, would inform a more critical and contextualized understanding of EU law.

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To use the language of the Council of Europe’s Parliamentary Assembly. See Resolution 1726 on the effective implementation of the European Convention on Human Rights: the Interlaken process, adopted on April 29, 2010, Paragraph 7.

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part ii

Constitutionalization and Democratization

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5 Imagining the Course of European Law? Parti Ecologiste ‘Les Verts’ v. Parliament as a Constitutional Milestone in EU Law

anne boerger and bill davies

In his discussion of the ruling Parti Ecologiste ‘Les Verts’ v. Parliament,1 current President of the CJEU Koen Lenaerts intimated that it is “striking that so many fundamental points of European law can be found in one case”,2 and that it would be impossible to “imagine the course of European law without Les Verts”.3 He characterized this case as “both a cornerstone and a milestone” in the ECJ’s jurisprudence.4 On one hand, cornerstones are integral parts of a construction’s framework, securing the building blocks of the future. The large body of scholarship on the Les Verts ruling5 has taken this decidedly future-orientated stance to heart, focusing on how the judgment became a “cornerstone” for the Union’s legal order,6 litigation

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ECJ Case 294/83 [1986]. Parti écologiste “Les Verts” v European Parliament. (http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:61983CJ0294). Koen Lenaerts, ‘The Basic Constitutional Charter of a Community Based on the Rule of Law,’ pp. 295–315, in Miguel Poiares Maduro and Loïc Azoulai (eds.), The Past and Future of EU Law: The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, p. 295. 4 Lenaerts, 2010, p. 315. Lenaerts, 2010, p. 295. See Koen Lenaerts and Tim Corthaut, ‘Judicial Review as a Contribution to the Development of European Constitutionalism,’ in Takis Tridimas and Paolisa Nebbia (eds.), European Union Law for the Twenty-First Century. Rethinking the New Legal Order, Oxford: Hart Publishing, 2004, vol. 1, pp. 16–64; Henri de Waele, ‘The Role of the European Court of Justice in the Integration Process: A Contemporary and Normative Assessment,’ Hanse Law Review, 2010, 6/1, pp. 1–26 (5); Paul Craig and Grainne de Burca (eds), The Evolution of EU Law, Oxford: Oxford University Press, 2011, pp. 71, 105, 445; Laurent Pech, ‘A Union Founded on the Rule of Law’: Meaning and Reality of the Rule of Law as a Constitutional Principle of EU Law,’ European Constitutional Law Review, 2010, 6, pp. 359–96. For a more critical view on this ruling, see Trevor C. Hartley, The Foundations of European Union Law. An Introduction to the Constitutional and Administrative Law of the European Union, Oxford: Oxford University Press, 2014 (8th edition), pp. 74, 83. Lenaerts, 2010, p. 315.

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strategies,7 and system of remedies.8 Milestones, on the other hand, indicate a significant achievement in the progression of a construction. Lenaerts is equally right in describing the ruling as a milestone as it was, after all, the first explicit qualification by the Court of European law as ‘constitutional’. Applying a historical methodology, our focus in this chapter falls not on the subsequent effect of the case and its “cornerstone” nature, but rather on how the case was a milestone in the evolution of a legal system. The question at the heart of the Les Verts ruling is on the interpretation of Article 173(1) EEC. It is a largely forgotten fact that the group of jurists drafting the Rome Treaty in 1957 originally intended for acts of the then-Assembly to be included within the remit of the CJEU’s power of review. One of the main drafters of the article and later influential judge at the CJEU was Pierre Pescatore. He regarded Article 173 as the “cornerstone of the jurisdictional provisions”.9 Although Pescatore was no longer sitting on the European bench in 1986, the constitutional rhetoric of Les Verts softly echoes his 1958 characterization of Article 173 EEC: “It is here that the Treaty actually appears as the constitution, as the fundamental law of the Community.”10 It was very likely under Pescatore’s influence that the groupe de rédaction strongly asserted the Court’s role in reviewing the legality11 of the Council’s and the Commission’s acts. The jurists initially intended to also submit the acts of the Assembly to this judicial review process and to grant it the right to bring an action for annulment against the acts of the Commission and of the Council.12 Despite some

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Jean-Paul Jacqué, ‘Les Verts v The European Parliament,’ pp. 316–25 in Miguel Poiares Maduro and Loïc Azoulai (eds.), The Past and Future of EU Law: The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, pp. 316–25. Alberto Alemanno, ‘What Has Been, and What Could Be, Thirty Tears after Les Verts/ European Parliament, in Miguel Poiares Maduro and Loïc Azoulai (eds.), The Past and Future of EU Law: The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, pp. 324–32. Pierre Pescatore, ‘Les aspects fonctionnels de la CEE notamment les sources du droit,’ in Les aspects juridiques du Marché Commun. Compte rendu du séminaire organisé à Chaudfontaine les 22, 23 et 24 mai 1958, Faculté de Droit de Liège, 1958, pp. 50–83 (63). Thereafter P. Pescatore, ‘Les aspects fonctionnels . . .’. P. Pescatore, ‘Les aspects fonctionnels . . .,’ p. 63 (authors’ translation). Groupe de rédaction, ‘Projet de rédaction d’articles relatifs à la Communauté pour le marché commun’ (MAE 838/56, Article 29, p. 15). 27 Dec. 1956. Historical Archives of the European Union (HAEU), CM3NEGO190. The term was preferred over a weaker alternative (‘legal regularity’). Groupe de rédaction, ‘Projet de rédaction d’Articles relatifs aux institutions de la communauté pour le marché commun’ (MAE 813/56, Article 27, pp. 3–4), 15 Dec. 1956. HAEU, CM3NEGO190.

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hesitations, they included these provisions in several treaty drafts,13 and the heads of delegation approved them in late January 1957.14 They were, however, removed from the 5 March 1957 treaty draft, seemingly to reflect a decision reached by the heads of delegation a few days earlier.15 No archival documents allow us to undoubtedly establish the reasons motivating this withdrawal or to identify who supported it, but we can speculate that this change is correlated to the weakening of the Assembly in the institutional system. That a case as significant in the development of EU law as Les Verts may well have been precluded within the drafting of the Treaty should give us pause about that historical moment. The EU legal system originated from international treaties in the 1950s, yet by the mid-1980s, the CJEU could describe these as constitutional in nature. In order to explain Les Verts’ effect on this transformation, we focus on recounting the longer contextual story that precedes the case. The Court’s role in developing a constitutional discourse has been the recurring subject of some of the classics of European legal scholarship. The constitutionalization paradigm16 and its opponents17 are staples for the students of European law, even if the idea has recently come under some scrutiny.18 Neil Walker has closely examined the constitutional claim of the Court in Les Verts, indicating that while the doctrinal impact of the ruling was certainly neither “trivial nor uncontroversial”, the “signification” carried by the Court’s use of terminology is where the ruling’s real importance lies.19 This had an

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MAE 838/56 (27 Dec.1956), MAE 101/57 (14 Jan.1957), MAE 220/57 (22 Jan.1957). HAEU, CM3NEGO190, and MAE 524/57 (14 Feb.1957), HAEU, CM3NEGO203. Comité des chefs de Délégation, ‘Projet de procès-verbal (réunion des 23 et 24 janvier 1957)’ (MAE 336/57), HAEU, CM3NEGO122. Groupe de rédaction, ‘Projet de rédaction d’Articles du Traité instituant le Marché commun établi par le Groupe de Rédaction’ (MAE 703/57, Article 38, p. 39), 5 March 1957. HAEU, CM3NEGO256. Eric Stein, ‘Lawyers, Judges and the Making of a Transnational Constitution’ , American Journal of International Law, 1981 75/1, pp. 1–27 and Joseph H. H. Weiler, ‘The Transformation of Europe’, Yale Law Journal, 1991 100/8, pp. 2403–2483. Hjalte Rasmussen, On law and policy in the European Court of Justice: a comparative study in judicial policymaking, Dordrecht; Boston: M. Nijhoff; Hingham, MA, 1986. Bill Davies and Morten Rasmussen, ‘From International Law to a European Rechtsgemeinschaft: Towards a New History of European Law, 1950–1979’ in Johnny Laursen (ed.), Institutions and Dynamics of the European Community, 1973–83 Baden-Baden: Nomos, 2014, pp. 97–130; Matej Avbejl, ‘The Pitfalls of (Comparative) Constitutionalism for European Integration,’ Eric Stein Working Papers, 1/2008; Matej Avbelj,’Questioning EU Constitutionalisms,’ German Law Journal, 9/1, 2008. By signification Walker means what the case “connotes rather than denotes” and how the Court’s “message fits into a broader public narrative of supranational polity-biding”; Neil Walker, ‘Opening or Closure? The Constitutional Intimations of the ECJ,’ in Miguel Poiares Maduro

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important and multifaceted effect on the subsequent Constitutional Convention and debates of the early 2000s, with the Court at once articulating and codifying its longer-term, incremental building of a constitutional practice of European law,20 but equally crystalizing a narrative in search of “vindication” during the discussions.21 The dilemma involved with vindicating the Court’s claim was that the Court’s version of sui generic constitutional development is, according to Walker, “modest” constitutionalism with a small “c”, and at odds with the traditional “thick” constitutionalism of state-based discourse, embodied in the high-political and very public methodology of the Convention project itself. Faced with these “more resonant constitutional stories”, the success of the Court in building a system where the term “constitutional” could be used at all became ironically one of the contributing factors in the failure of the Convention and the undermining of the constitutional claim.22 It is our aim to flesh out the incremental development of this small-“c” constitutionalism that Walker mentions but chooses – for obvious reasons – not to dwell upon. To do so, this chapter proceeds in three parts. First, we review the double contribution of Les Verts and recap its meaning and language. In the second and core part of the chapter, we try to map the gradual development evoked by Walker by first turning back to the 1950s in order to understand how the EU’s institutional and legal system was originally crafted. Finally, we focus our attention on analyzing how the “constitutional” qualities of the Treaties were developed in the case law of Court after 1958. Overall, our story will highlight that a combination of factors – including the “dynamic” nature of the Treaty of Rome, the integration of certain key legal mechanisms and a consistent, teleological interpretation of the texts by the Court – were instrumental in the Court’s development of a constitutional discourse for a European legal order.

the double contribution of les verts Certainly the facts in the case of Les Verts are what could typically be thought of as “constitutional law”, focusing on the powers and competencies of one of the core institutions of the Union. The case was brought before the Court by

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and Loïc Azoulai (eds.), The Past and Future of EU Law: The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010 pp. 333–34. As defined in Bill Davies and Morten Rasmussen, ‘Towards a New History of European Law,’ Contemporary European History, 2012, 21(3), p. 305. Here the authors refer to a legal order hierarchically similar to a federal constitutional order, but one that lacks symbolic resonance in the population and is unusually dependent on the agreement of its Member States, whose resistance and feedback into the system are highly influential. 22 Walker, 2010, p. 341. Walker, 2010, pp. 341–42.

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the French ecologist party, Les Verts, which contested how the European Parliament (EP) had allocated financial support to political groups prior to its second direct elections (1984). Political parties already represented in the European hemicycle received larger amounts of monies, whereas parties contesting the elections for the first time were allotted smaller sums. Hindered by this distribution model, one of the associations falling in the second category, the French ecologist party, challenged the EP’s decision in court. The Court’s position on the legality of the EP’s decision23 matters far less than its decision to actually hear the case, since under Article 173 EEC (article 263 TFEU), only the acts adopted by the Council and by the Commission could be challenged in Court.24 The lack of clear jurisdiction did not deter the judges. Applying the teleological approach that had characterized its interpretation of the founding treaties since the early 1960s,25 the ECJ elected to admit the case on the ground that “[a]n interpretation of Article 173 of the treaty which excluded measures adopted by the European Parliament from those which could be contested would lead to a result contrary both to the spirit of the treaty as expressed in Article 16426 and to its system”.27 Holding that the absence of annulment proceedings against the EP’s measures resulted from the limited role initially played by the then-European Assembly, the Court reasoned that the progressive expansion of the EP’s powers necessitated that its acts be now also subjected to judicial review, even if this was not “expressly mentioned”28 in Article 173 EEC, since these acts “could encroach on the powers of the member states or of the other institutions, or exceed the limits which have been set to the parliament’s powers”.29 In a similar effort to take into

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The Court ruled that EP’s act was invalid since it was related to the conduct of the EP elections and thus fell within the competence of the Member States. Article 173 (1) EEC provides that “The Court of Justice shall review the legality of acts of the Council and the Commission other than recommendations or opinions. It shall for this purpose have jurisdiction in actions brought by a Member State, the Council or the Commission on grounds of lack of competence, infringement of an essential procedural requirement, infringement of this Treaty or of any rule of law relating to its application or misuse of powers.” This was contrary to what was provided under Article 38 ECSC, which provided that the Court can review acts of the Assembly/Parliament at the suit of the High Authority or of a Member State. See Morten Rasmussen, ‘From Costa v ENEL to the Treaties of Rome: A Brief History of a Legal Revolution,’ in Miguel Maduro and Loïc Azoulai (eds), The Past and Future of EU Law: The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, pp. 69–85. Article 164 EEC outlines the overall mission of the Court, i.e. that it “shall ensure that in the interpretation and application of this Treaty the law is observed”. 28 29 Les Verts, para. 25. Les Verts, para. 24. Les Verts, para. 25.

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consideration the EP’s increasing role in the community’s institutions and to move beyond a simple black-letter reading of the Treaties, the Court later granted to the Parliament the right to bring action for annulment against an act adopted by the Council or the Commission, equally a power not explicitly provided for in the Treaty of Rome.30 The second contribution of the Court’s judgment in Les Verts is to be found in paragraph 23, and is directly linked to the first contribution. To support the single-handed expansion of its judicial review competence by its teleological interpretation of Article 173 EEC, the Court required a convincing argumentation, expressed in a few lines quoted time and time again by legal scholars and practitioners.31 These authoritative lines ought to be repeated here: It must first be emphasized 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.32

If the judges stopped fractionally short of uttering the word “constitution”, their explicit constitutional rhetoric has carved out for Les Verts a distinct place in the European jurisprudence. To construe how such a constitutional reading of an international treaty was even possible in the first place, we propose to home in on the negotiations of

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In Case C-70/88, Parliament v Council (Chernobyl) [1990] ECR I-204, the Member States eventually endorsed this position by amending Article 173 [now Article 263 TFEU] in the Maastricht Treaty to explicitly provide for a judicial action for annulment against an act of the EP intended to produce legal effects vis-à-vis third parties. See, for example: Miguel Poiares Maduro and Loïc Azoulai (eds.), The Past and Future of EU Law: The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, pp. 295 and 319; Giuseppe Martinico, The Tangled Complexity of the EU Constitutional Process, London: Routledge, 2013, p. 58; Dorota Leczykiewicz, ‘“Constitutional Justice” and Judicial Review of EU Legislative Acts,’ in Dimitry Kochenov, Gráinne de Búrca and Andrew Williams (eds), Europe’s Justice Deficit? Oxford:Hart, 2015, p. 100; Frederico Mancini, Democracy and Constitutionalism in the European Union: Collected Essays, Oxford: Hart, 2000, p. 205; Laurent Pech, ‘A Union Founded on the Rule of Law’: Meaning and Reality of the Rule of Law as a Constitutional Principle of EU Law,’ European Constitutional Law Review, 2010, 6, pp. 370–71; Koen Lenaerts, ‘Constitutionalism and the Many Faces of Federalism,’ American Journal of Comparative Law, 1990, 38(2), pp. 205–63 (201); Jean-Claude Piris, ‘Does the European Union have a Constitution. Does it Need One?,’ Harvard Jean Monnet Working Paper 5/00, 2000, p. 8. Les Verts, para. 23 (emphasis added).

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the original Treaty of Rome and explore how its institutional and legal system was crafted in the 1950s.

contextualizing les verts in the eu’s legal history When the Treaty of Paris, which established the first European community, the European Coal and Steel Community (ECSC) and the Treaty of Rome were first written, they were certainly not thought of as constitutional in any way. The 1950s had been a turbulent period for the integration project: both the Paris (1952) and Rome (1958) treaties were crafted and ratified, yet right in the middle of these negotiations, the project to create a European Political Community (1954) with its own constitution failed to come to fruition. The Paris and Rome treaties, while perhaps not constitutional, were nonetheless considered different from standard international treaties. The treaty negotiators, as well as scholars and politicians familiar with them at the time, frequently commented in the late 1950s on the open and dynamic nature of the Treaty of Rome in particular, and on the flexibility required for the new European institutions in using the competency granted to them in the documents. This was, for example, the first core feature that Pierre Pescatore highlighted when he presented the new community at a law seminar in May 1958.33 Paul Reuter expressed a similar idea when he identified “la souplesse et l’indétermination” (pliability and indeterminacy) as the main characteristics of EEC institutions.34 The open-ended nature of the institutions was also noticed in the parliamentary reports and during the ratification debates.35 The general impression was that the EEC would become what Europeans would make of it. In the following pages, we first review overarching factors that resulted in a treaty and in institutions that were open for development, future-orientated and ultimately ambiguous in purpose; then we analyze key features of this system to demonstrate how a small number of quasi-constitutional legal tools were added to the treaty, which otherwise rested – like most treaties do – essentially on the principles and practices of international law.

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P. Pescatore, ‘Les aspects fonctionnels . . .’, pp. 55, 74. Paul Reuter, ‘Aspects de la Communauté Economique Européenne. Aspects institutionnels et juridiques’, Revue du Marché commun, 1958, 310–16 (310). Rapport juridique de la Commission spéciale de la Chambre des députés (Adrien van Kauvenbergh). Bulletin de Documentation du Service Information et Presse, Luxembourg, 12, (Dec. 1957), p. 148. See also comments by Victor Larock, Belgian minister of Foreign affairs, Chambre des Représentants, Annales parlementaires, 14 November 1957 PM, p. 20.

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determining factors of the treaty negotiations within their diplomatic and institutional context Three overarching factors concurrently influenced the institutional and legal nature of the Treaty of Rome. They consist in the political considerations that shaped the overall frame within which the treaty negotiators could design the institutions and the legal system; the truly ambitious nature of the common market project; and finally the individual agency involved and the conflicting views held on the nature of European integration. Before considering these factors, it is useful to quickly review how the negotiations unfolded.36 In May 1955, at the Messina summit, the ministers of foreign affairs of the ECSC Member States endorsed an initiative taken by the Benelux countries to put the European integration process back on track after the European Defence Community (EDC) debacle. As a result, an intergovernmental Committee of experts was set up under the leadership of Belgian Minister of Foreign Affairs, and fervent European, Paul-Henri Spaak. This Committee produced a non-binding report submitted to the governments of the ECSC members in April 1956. Drawing on the work of these experts, the Spaak report – as the document was known – recommended the creation of a general common market and of a European Atomic community (EURATOM). The ECSC governments adopted the report at the Venice Summit in late May 1956, and mandated an international conference, chaired by Spaak, to draft two separate treaties. The negotiations resumed on 26 June 1956 in Brussels. Three working groups, supervised by the Committee of the heads of delegation, were set up: one for the common market; one for EURATOM; and a committee of legal experts, the so-called groupe de rédaction, composed mainly of jurists. The six national governments signed the Treaties of Rome on 25 March 1957. When the Benelux countries took the initiative to revive the European integration process in April 1955, the overall political attitude towards Europe was undeniably far less enthusiastic than it had been four years earlier, when the Treaty of Paris was signed. This mood swing was largely due to the rejection by the French National Assembly of the EDC treaty, a rejection that simultaneously killed both the plan for a European political community (EPC) and any dream of a European federation based on a constitutional treaty. The aftermath of this rejection remained very vivid in France and in Europe, and compelled the Benelux countries to keep their integration plan 36

For a history of the Treaties of Rome negotiations, see Hanns-Jürgen Küsters, Fondements de la Communauté économique européenne, Luxembourg–Bruxelles: Labor, 1990.

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strictly along economic lines, as well as to refrain from any grandiose institutional or legal scheme. The cautious approach adopted both in the Benelux memorandum and at the Messina conference aimed mainly at not alienating France, without whom an integration project could not be seriously considered. All too aware that the new initiatives would be rebuffed in Paris if the Six were to walk again the path of supranationalism or to give a constitutional/federal slant to the new project (or to do so too openly), France’s European partners were careful not to make matters worse by rushing integration. Although the Benelux countries and Italy were generally inclined to support supranational solutions, the French and (to a certain degree) German trepidations37 towards a general common market and institutions based on the ECSC model cast a shadow over the negotiations and affected the institutional and legal outcomes.38 This attitude was upheld until Guy Mollet formed a new French socialistradical government in late January 1956. Mollet and his foreign minister, Christian Pineau, gave a new impulse to France’s European policy, and the attitude towards the Brussels negotiations started to shift. This enabled the initial design of the institutional framework for the common market in February 1956,39 and eased the adoption of the Spaak report in May 1956. When Guy Mollet and German chancellor Konrad Adenauer met in Paris on 6 November 1956, they did not discuss the institutional and even less the legal issues of the common market, but they committed to ensure the success of the negotiations. Their commitment was politically driven by a conjuncture of events in the context of the Cold War. While Mollet was embroiled in the Suez crisis, Adenauer was very apprehensive about the potential withdrawal of American and British troops from Germany and felt the increasing need for Germany to acquire nuclear weapons.40 This could only be achieved in a European framework. Both leaders now saw the unification of Europe and the success of the new initiatives (EURATOM and EEC) as lifesaver projects for their countries. Failure was no longer an option. This top political 37

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Ludwig Erhard, the Minister of Economic Affairs in Germany, also voiced a strong opposition towards the common market and supranational institutions. See e.g. Albert Hupperts, ‘Note pour Monsieur le Ministre des Affaires étrangères’, 16 September 1955. Archives of Belgian Ministry of Foreign Affairs, 7252/1/1; ‘Weekbericht n 11. Periode 8 t/m 10 oktober 1956’. Archives of Dutch Ministry of Foreign Affairs, II, 913.100, 6352. ‘Projet de procès-verbal de la Conférence des Ministres des Affaires Etrangères [. . ..]’ Brussels, 11–12 Feb. 1956. HAEU, CM3NEGO10. Paul Pitman, “Un Général qui s’appelle Eisenhower”: Atlantic Crisis and the Origins of the European Economic Community”, Journal of European Integration History,, 2000, 6/2, pp. 51–52. Also Hubert Zimmermann, Money and Security. Troops, Monetary Policy and West Germany’s Relations with the United States and Britain, 1950–1971, Cambridge: German Historical Institute, 2002, pp. 87 – 95.

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commitment allowed the negotiations to resume in Brussels, and the heads of delegation reached a general agreement on the institutional structure outlined in the Spaak Report.41 It also meant that making sure that the treaty would be ratified by the national parliaments became even more paramount, and that no daring institutional and legal solutions would be permitted if they threatened the success of the projects. As a result, minimalist institutions and restrained rhetoric were favoured for political reasons. The sheer magnitude of the project envisioned in 1955–57 also conditioned the institutional and legal system. Creating a general common market was truly, as Spaak put it, an “economic revolution”.42 Prompted by the need to both revive the integration process and expand trade among the six Member States, as well as with third countries, the setting up of a customs union implied the dismantling of all direct and indirect obstacles to trade among six Member States, the establishment of a common external tariff and the definition of common policies. This comprehensive project could only be carried out by phases and achieved at the end of a twelve- to fifteen-year transitional period. Such long-term process was not without a risk of the entire project to stall or even to collapse if one of the participants got cold feet. It was thus crucial to render the process nearly irreversible and to put in place the institutional mechanisms guaranteeing this irreversibility. It was also understood early in the negotiations that the common market would involve future decisions about harmonization of national legislation and common policies.43 This would of course have important repercussions on the institutional system. While for the ECSC, which only dealt with the integration of two sectors of the economy, it had been possible to craft a treaty encompassing almost all the rules and regulations to be applied by the executive authority (the High Authority), no such treaty could ever be written for the common market. This bottom line was clearly expressed in the Spaak report.44 Enough flexibility and effective decisional mechanisms were thus required to permit further adaptations and to achieve the goals established in the treaty itself. The open-ended and ever-evolving nature of the common

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‘Comité des chefs de délégation. Projet de procès-verbal de la réunion [. . .] 22 novembre 1956’ (MAE 647/56). HAEU, CM3NEGO112; and ‘Comité des chefs de délégation. Projet de procèsverbal de la réunion [. . .] 29 novembre 1956’ (MAE 670/56). HAEU, CM3NEGO113. ‘Exposé de Monsieur Paul-Henri Spaak [. . .] devant l’Assemblée commune’, 13 March 1956. HAEU, CM3NEGO77. P[ierre] U[ri], ‘Première note pour les chefs de délégation au Comité intergouvernemental de Bruxelles,’ 22 October 1955. Fondation Jean Monnet (Lausanne), AMK 36/2/22. ‘Rapport des Chefs de Délégation aux Ministres des Affaires Etrangère’ (Rapport Spaak), 21 April 1956, pp. 23–24. HAEU, CM3NEGO87.

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market required a framework treaty (traité-cadre) including core principles, objectives and means to achieve the end goal, instead of a traité-loi. This meant that the treaty defined goals and tasks, provided the institutions with means of action, but that, except for the broad orientations, the community policies remained to be determined and the community order to be defined.45 Well aware that they could not create a complete European economic order, nor resolve beforehand all the issues resulting from setting up and developing the common market, the treaty negotiators defined instead general and distant goals, and set up institutions with enough decisional powers to achieve these ultimate goals. This was arguably the only course of action possible given the complexities of establishing a common market and joint policies. Finally, close attention ought to be paid to the actors of the negotiations and to their visions of European integration. Beyond the limitations imposed by the political and economic considerations mentioned earlier, support in favour of a constitutional or federal approach to European integration remained tangible among political leaders and legal experts, who managed to embed traits in the treaty that would later prove crucial for the rise of a European legal order. These European-minded protagonists did not constitute a well-defined group with a clear goal and specific strategies to achieve it. Moreover, they were constrained by their respective role in the negotiations. The heads of the delegation outlined the institutional framework of the treaty and let the jurists work out the legal issues. Concerned above all with the political success of the negotiations, they evidently could not promote bold federal or constitutional solutions, even though some of them, such as Spaak or Carl F. Ophüls (head of the German delegation), personally supported them.46 Their endorsement of the institutional and legal dispositions drafted by the groupe de rédaction was crucial. The endorsement was not only due to their lack of understanding of these provisions’ long-term implications but also reflected their pro-European views. Likewise, if the jurists enjoyed a fair amount of leeway to draft the treaties and shape the legal dispositions, they could only act within the general framework established by political leaders. For example, the jurists discussed the idea of setting up a constitutional court,47 but never brought it to the attention of the heads of delegation, as it was evident that it would never gain political support. Moreover, the jurists of

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P. Pescatore, ‘Les aspects fonctionnels . . .,’ p. 52. E.g. S. Vance to the Department of State, 14 October 1955. NARA, RG 59, 840.00/9-2155, 4386. Mühlenhöver, ‘Aufzeichnung. [...] Hier: Gerichtshof’, 17 Dec. 1956. Politisches Archiv des Auswärtigen Amtes. Abt.2, 225–30-04, 933 (thereafter PAAA). See also Interview of Michel Gaudet by G. Bossuat, 20 Jan. 1998, pp. 3–4. HAEU, INT 603.

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the groupe de rédaction did not constitute a completely homogenous ensemble. There was undoubtedly a core group of jurists with federalist views, which included Luxembourg representative Pierre Pescatore, Italian delegate and former jurist at the High Authority Nicola Catalano, and Michel Gaudet from the legal service of the High Authority who joined the group early January 1957 at the request of Spaak himself. Belgian diplomat Yves Devadder, and two of the three German representatives, Ernst Wohlfarth (Ministry of Economics) and Hans-Peter von Meibom (Ministry of the Interior), upheld, at least to some extent, similar views, while the rest of the group, i.e. French representative Jean-Jacques De Bresson, Hubert Ehring (director of the legal service of the ECSC Council), Dutch Willem Riphagen and the third German jurist Joseph Mühlenhöfer, shared more conservative or reserved positions. Finally, Pierre Uri ought to be mentioned here as well. Handpicked by Spaak, the director of the economic division at the High Authority and former negotiator of the Treaty of Paris proved highly influential. Not only did he pen the Spaak report but he also almost single-handedly crafted the institutional framework of the common market presented in the Spaak report.48 Controversial and contested,49 Uri was not included in the groupe de rédaction (despite Spaak’s initial intention) but remained very prominent as Spaak’s personal adviser. He did not have a bearing on the legal nature of the treaty but helped to solve major issues such as the weighting of votes at the Council of Ministers.50 These political, economic and ideological considerations had significant but conflicting repercussions on the institutional and legal design of the EEC. The ambitious nature of the project meant that the European economic order could only be created indirectly and progressively, by the means of community legislation, common policies and harmonization of relevant national legislations. Given their far-reaching impact on the Member States’ economies and the new political context, it was inevitable and paramount – agreed the treaty negotiators – that those national states play a central role in crafting, implementing and enforcing European legislation. As a result, the

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Key documents drafted by Uri: ‘Document de travail n 6. Institutions’, 8 Nov. 1955 and ‘Annexe au document n 6 sur les institutions’, 13 Feb. 1956. Archives Nationales de Luxembourg, 7695 (thereafter ANL). L. Schaus to J. Bech, 27 June 1956. ANL, 7718; and P.-H. Spaak to P. Uri, 3 July 1956. HAEU, Pierre Uri, 188. See, for example, Pierre Uri, ‘Note à l’attention de Monsieur Spaak,’ Luxembourg, 6 October 1956. HAEU, Pierre Uri, 47/A; and ‘Note sur la procédure de vote au Conseil (marché commun) établie par M. Uri sur mandat des chefs de délégation’ (MAE 634/56), 26 Nov. 1956. Fondation Jean Monnet (Lausanne), ARM 16/10/14.

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intergovernmental dimension of the new community was noticeably strengthened. But at the same time, a few constitutional features were also discreetly built into the treaty’s legislative and jurisdictional system by proEuropean negotiators with federalist views. These features offered an alternative to the intergovernmentalist vision and would later prove crucial for the development of the European order from the constitutive basis of the treaty. We shall review in the next section how the negotiators fashioned a system largely resting on the Member States, but with tools and mechanisms that allowed for a potential constitutional practice.

institutional and legal mechanisms of the common market The tension between the necessity of designing a more state-centered system and the aspiration for a supranational scheme favoring a federal breakthrough affected first the institutional framework of the EEC. This crucial component of the new community was dealt with mainly by the heads of delegation on the basis of proposals drafted by Pierre Uri.51 Most of the features of the institutional system were already included in the Spaak Report, but it was only after the Adenauer-Mollet agreement in November 1956 that final decisions could be made on institutional issues. Directly inspired by the structure created for the European Coal and Steel Community,52 the EEC included the same four core institutions, i.e. a European authority (modestly named Commission instead of High Authority), a council of ministers, an assembly and a court. A major shift of power in favor of the Council took place and was most apparent in the decision-making process. The Council of Ministers – and not the European authority as it was the case in the ECSC – was this time the main decisional instance, and was granted quasi-legislative powers to make the decisions necessary to create the common market. With the exception of the Dutch (who fought until November 1956 to make the Commission the

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‘Document de travail n 6. Institutions’, 8 Nov. 1955 and ‘Annexe au document n 6 sur les institutions,’ 13 Feb. 1956. ANL, 7695. The breakthrough in the ECSC was the High Authority, a supranational entity that administrated the coal and steel pool through binding legal acts and whose members were independent personalities representing only European interests. National governments transferred their powers to regulate both markets to the HA. Under the pressure of French socialists, the Benelux countries and Germany, three other institutions were added to the initial institutional system outlined in the Schuman Plan to control, to some level, the HA: a common assembly, a council of ministers which harmonize the activities of the HA and the general economic policy of the member states, and a Court.

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core decisional institution of the new community), all the delegations agreed with this approach. All delegations, including eventually the French, also acknowledged that the Commission had to be closely associated with the decision-making process to prevent the new community from swiftly reverting to a traditional intergovernmental organization. A critical and original role was therefore secured for the Commission, which received the monopoly of legislative initiative (Article 149 EEC). The influence of the Commission was also reinforced by the fact that only a unanimous decision of the Council could modify a proposal of the Commission.53 Also important was Article 148 (1) EEC, which stated that the Council was to act by majority of its members, a disposition only agreed upon thanks to Spaak’s diplomatic skills and in conjunction with a weighting-of-votes system at the Council.54 There were two important caveats to this principle, however: in many cases such a majority vote would only be implemented progressively, after four or eight years of transitional period. In addition, key decisions – in particular those regarding the harmonization of national legislation (Article 100 EEC) – would always be adopted unanimously. This ambiguous institutional outcome led to conflicting interpretations. The shift of decisional power in favour of the Council and the reduced role of the European authority were either highlighted by politicians in an effort to appease fears of supranationalism55 or deplored by parliamentarians with strong federalist views.56 Yet to key treaty negotiators such as Uri, Pescatore and Gaudet, the alleged loss of supranationalism was merely an optical illusion.57 To them, Article 149 and the progressive transition towards majority decision at the Council would actually turn the Commission into the genuine driving force of the common market. Both provisions represented a potential stepping-stone towards federalism. The institutional system,

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This was a Dutch demand. ‘Les compétences et les procédures prévues dans le rapport sur le marché commun,’ 11 Sept. 1956 (MAE 269/56). HAEU, CM3NEGO259; ‘Comentaar op het Brusselse Rapport over de gemeenschappelijk Markt,’ sd. Archieven van het ministerie van Buitenlandse Zaken (Den Haag), II, 913-100, 6327. This idea was initially put forwards by Uri in February 1956, but was somewhat tamed in the Spaak Report so not to arise fears and resistance. E.g. in France: Commission des Affaires étrangères de l’Assemblée Nationale, Rapport 5266 de M. Savary sur la CEE, 26 June 1957, p. 2373. E.g. in Belgium: Chambre des Représentants, Rapport fait au nom de la Commission spéciale par M. Bohy, 727 (1956–1957) n 2, pp. 26–27. P. Pescatore, ‘Les aspects fonctionnels . . .,’ p. 674; Michel Gaudet to Eric Stein. 9 Jan. 1960, FJM, Gaudet Papers, Correspondence with Stein; ‘Exposé fait par M. Pierre Uri lors de la visite d’un groupe d’élèves de l’École Normale Supérieure de Paris, le 4 avril 1957’, HAEU, Pierre Uri, 197.

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they argued, might appear less supranational than its ECSC counterpart, but it was not. The treaty negotiators’ conviction that it was preferable to act indirectly and to rely largely on national states to implement European legislation is also reflected in the extensive use of directives, one of the five legal norms, outlined in Article 189 EEC, by which the European institutions could act. A directive required a Member State to achieve a particular result, but offered autonomy to national states with regard to the choice of means to achieve the intended outcome. Since they functioned more as an instrument of international law, directives were of a reassuring nature. Yet remarkably, jurists from the groupe de rédaction (in particular Pierre Pescatore, who drafted this Article) also included in Article 189 another type of legal norm – the regulations – which were obligatory in all their elements and directly applicable in the Member States. This gave the European institutions the right to legislate directly for all individuals within the Member States, without going through the national authorities. Regulations were indeed community laws, even though such a vocabulary was banned,58 and as such they offered a powerful tool for the future development the European legal order. The terms of enforcement also gave a key role to national states as they relied on the application of European law by national courts under the guidance of their respective constitutional orders. As a result, it was critical to put into place a mechanism to ensure uniformity of interpretation of European law and prevalence of community perspective over national views. Here again the ambitions of more pro-federalist jurists had to be tamed as their plan to turn the ECJ into a constitutional court by giving the European judges the exclusive jurisdiction every time a provision of community law was involved in litigation and by letting them rule directly, was not a politically acceptable solution.59 A more adequate alternative to ensure uniformity of interpretation was the preliminary ruling mechanism outlined in Article 177 EEC, which gave the national courts the responsibility to apply community law but encouraged or forced them to refer to the European judges when challenged with a question of interpretation. The groupe de rédaction paid very close attention to the mechanism initially proposed by Catalano and directly inspired by the Italian constitutional system. Here too caution prevailed and prompted the jurists to soften Catalano’s first draft of the provision. Two major elements from his proposal were brushed aside, i.e. the mention of 58 59

P. Pescatore, ‘Les aspects fonctionnels . . .,’ p. 67. Interview of Michel Gaudet by G. Bossuat, 20 Jan. 1998, pp. 3–4. IUE, INT 603; Mühlenhöver, ‘Aufzeichnung. [...] Hier: Gerichtshof’, 17 Dec. 1956. PAAA. Abt.2, 225–30-04, 933.

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a ‘binding’ nature of the ECJ’s rulings on national courts and the right for the court to render preliminary rulings concerning the application of the treaty.60 The role of applying European law should exclusively be reserved for the national judiciaries, the jurists eventually agreed.61 The mechanism put in place was thus to some degree similar to a federal supreme court system of judicial review, but its future success was entirely contingent upon the good will and cooperation of national courts. Here again a crucial instrument for the development of European law was built into the treaty. However, not only was this legal procedure a scaled-down version of the initial projects, but its future implementation also remained very circumstantial. Weaker than its ECSC counterpart, the infringement procedure under Articles 169, 170 and 171 EEC conveyed as well the limitations faced by politicians and jurists in 1956–1957, and indicated that the new treaty was directed to the states and not to the citizens. Considering that the Court would potentially be overwhelmed if every infringement case was directly submitted to its arbitration, the groupe de rédaction assigned responsibility for monitoring compliance to the Commission and to the Member States. It also designed a two-step process inspired by the European Court of Human Rights. The Commission was to first deliver a reasoned opinion to a Member State that allegedly failed to fulfil a treaty obligation. In the case of non-compliance by the State, the Commission (Article 169 EEC) or another Member State (Article 170 EEC) could then take the culprit to court.62 The infringement procedure was also weakened by the fact that the Court could no longer levy fines for non-compliance, as was the case under Article 88 ECSC. Moreover, the right to sue a government for breaking its treaty obligations was deliberately not granted to the individuals or to the enterprises. Negotiators held that the rights of individuals would be adequately protected by the Commission’s prerogative to pursue any treaty infringement by a Member State. No other mechanism to protect individuals against the non-application by their own Member States of European law was deemed necessary. In line with this approach, the right for private litigants to appeal to the Court against community measures was significantly closed down in Article 173.2 EEC in comparison with the ECSC Treaty. This change was also intentional and resulted

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See various drafts in R. Schulze and T. Hoeren (eds.), Dokumente zum Europäischen Recht. Band 2: Justiz (bis 1957), Berlin, Heidelberg, New York: Springer, 2000, 373 onwards. Mühlenhöver, ‘Aufzeichnung. [...]. Hier: Gerichtshof ’, Bonn, 17 Dec. 1956. PAAA. Abt.2, 225–30-04, 933. This was a Dutch demand. ‘Les compétences et les procédures prévues dans le rapport sur le marché commun,’ 11 Sept. 1956 (MAE 269/56). HAEU; CM3NEGO259.

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from the group’s desire to reverse the Court’s practice of widening its access to private persons.63 Before concluding, one ought to comment on the Treaty of Rome’s preamble, as its crafters also had to balance the desire of a few to open the door to further integration and the need to do so without provoking an outcry among the opponents of that very idea. As a result, the new treaty opened on a conciliatory formula between these two trends: the distant objective of the treaty signatories was no longer the impending European federation harbingered in the ECSC Treaty, but an elusive ‘ever closer union among the peoples of Europe’.64 The German Minister of Foreign Affairs Heinrich von Brentano did not fail to appreciate the true significance of this goal and of the general principles set forth at the very onset of the Treaty. The preamble is binding, he declared to the Bundestag’s special committee, and concretely shows the path that the new community wishes to take.65

exploiting the constitutional qualities of the treaties How did we transition from a treaty carefully crafted to essentially rest on international law to a Court’s ruling, issued some thirty years later, confidently claiming the constitutional nature of that very treaty? Two intertwined developments ought to be considered here, although very briefly, as they both contributed to this extraordinary outcome. The first development concerns the teleological interpretation of the treaty embraced by the ECJ in several groundbreaking rulings. The story of what can be labeled a “constitutional practice”66 of European law by the ECJ is well known. From 1963 onwards, the ECJ – which up to that point had remained rather conservative in its rulings – began to exploit legal mechanisms (e.g. the system of judicial review in the preliminary ruling mechanism (Article 177 63

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Reuter to Stein, ‘Observations,’ Dec. 1959. Stein Papers, Bentley Historical Library, University of Michigan, 12. Morten Rasmussen, ‘From Costa v ENEL to the Treaties of Rome: A Brief History of a Legal Revolution,’ in Miguel Poiares Maduro and Loïc Azoulai (eds), The Past and Future of EU Law: The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford: Hart Publishing, 2010), 83. Deutscher Bundestag, 3. Sonderausschuss Gemeinsamer Markt/Euratom, ’Kurzbericht über die zweite Sitzung des Ausschlsses am Montag, dem 20. Mai 1957, 15.00 Uhr,’ p. 3. The Belgian Minister of Foreign Affairs also underlined the crucial importance of the principles outlined in the preamble. Chambre des Représentants, Annales parlementaires, 14 Nov. 1957, p. 20. Bill Davies and Morten Rasmussen, ‘Towards a New History of European Law’, Contemporary European History, 2012, 21/3, 2012 p. 305.

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EEC)) to create a new European legal order. The central pillars of this supranational order consisted of the principles of direct effect, established in the 1963 Van Gend en Loos decision,67 and of the primacy of European law over national law, formulated a year later in the Costa v. E.N.E.L ruling. The European judges continued to build on this foundation through their integrationist jurisprudence, in cases such as Commission vs. Lux & Belgium, and Internationale Handelsgesellschaft, studied in chapters in this volume.68 This process was often contested by national administrations and high courts,69 but was strongly promoted by the Commission’s legal service (led until late 1969 by treaty negotiator Michel Gaudet) where the groundbreaking interpretation of the Treaties of Rome actually originated.70 The second and parallel development concerns the rise of a constitutional discourse in academia and legal circles. As the ECJ was handing down its groundbreaking rulings, legal scholars and practitioners engaged in an intense debate over the nature of Europe’s legal order. This academic discussion was also bolstered by the Commission’s legal service in an effort to facilitate the acceptance of the court’s doctrine in the Member States.71 Among competing interpretations, a constitutional scholarship emerged, driven by American legal scholars Eric Stein (a close friend of Michel Gaudet since the late 1950s) and Joseph H. H. Weiler, who can be considered as the primary protagonists of the paradigm’s breakthrough in the early 1980s.72 According

67 68 69

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See Rasmussen’s chapter in this volume See Phelan and Davies’s chapter in this volume. Bill Davies, Resisting the European Court of Justice: West Germany’s Confrontation with European Law 1949–1979, Cambridge: Cambridge University Press, 2012; Alexandre Bernier, ‘Constructing and Legitimating: Transnational Jurist Networks and the Making of a Constitutional Practice of European Law, 1950–1970,’ Contemporary European History 2012, 21/3, pp. 399–415. The legal service and Michel Gaudet were indeed the originators of the groundbreaking interpretation of the Treaties of Rome. See Morten Rasmussen, ‘Establishing a Constitutional Practice of European Law: The History of the Legal Service of the European Executive, 1952–65,’ Contemporary European History, 2012, 21/3, pp. 375–397. Idem. See also Karen Alter, Jurist Advocacy Movements in Europe: The Role of Euro-law Associations in European Integration, in: Karen Alter, The European Court’s Political Power. Selected Essays, Oxford and New York: Oxford University Press, 2010, 63–91; Antoine Vauchez, The Making of the European Union’s Constitutional Foundations: The Brokering Role of Legal Entrepreneurs and Networks, in: Wolfram Kaiser, Brigitte Leucht and Michael Gehler (eds.), Transnational Networks in Regional Integration. Governing Europe 1945–83, Basingstoke: Palgrave, 2010, pp. 108–28. Eric Stein, Lawyers, Judges and the Making of a Transnational Constitution, 47(1) Am. J. Int’l L. 1 (1981) and Joseph H. H. Weiler, The Transformation of Europe, Yale Law Journal, 1991, 100/8 pp. 2403–2483. On the history of the constitutional paradigm, see Anne Boerger and Morten Rasmussen, Transforming European Law: The Establishment of the Constitutional

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to this interpretation, the European judges had ‘constitutionalized’ the Treaty of Rome through its case law, and thus had created a European legal order similar to the constitutional legal order of a federal polity. Although contested, this discourse became the mainstream account of the Court’s action, and still prevails nowadays. Arguably, by the mid-1980s, at a time when the European Parliament was adopting Altiero Spinelli’s draft constitution (1984),73 and when the thensluggish European integration was jump-started by the Single European Act (1986), both developments converged. Enough momentum had been built to boost the Court’s confidence to openly resort to the constitutional rhetoric, instead of the “new legal order” terminology used up to that point.74 In turn, this new language, repeated in 1991,75 fuelled the constitutional narrative.

conclusion The Treaty of Rome did not lend itself in an easy way to a constitutional interpretation: the new community was explicitly founded by a classic international treaty; the Council of Ministers was at the center of the decision-making process; the Court of Justice was not a supreme court; and responsibility for law enforcement rested essentially on the Member States. The treaty contained no reference to the sources of law or to legal principles, and it remained silent on the legal nature of the community. However, a few constitutional traits were introduced in the treaty; these traits would prove absolutely crucial for the future development of European law. How significant was the explicit framing of the Treaty of Rome as a “constitutional Charter” in the Les Verts ruling? Was it really a “milestone”? It could be argued that this was not so much a breakthrough as the culmination or the cumulative result of the constitutional practice advanced by the Court, starting with the direct effect and supremacy doctrines in the early 1960s

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Discourse from 1950 to 1993, European Constitutional Law Review, 2014, 2, pp. 199–225. See also Matej Avbelj, ‘Questioning EU Constitutionalisms’, German Law Journal, 2008, p. 1–26. Damian Chalmers and Adam Tomkins, European Union Public Law, Cambridge: Cambridge University Press, 2007, p. 58. The authors link the Court’s adoption of an ‘explicit constitutional language’ in the 1980s to the direct elections of the European Parliament in 1979. J. H. H. Weiler and Ulrich Haltern, ‘The Autonomy of the Community Legal Order,’ Harvard International Law Journal, 1996, 37, p. 421. The ECJ referred again to the EC treaties as a constitutional charter in Opinion 1/91 on the EEA Agreement. It stated that ‘the Treaty, albeit concluded in the form of an international agreement, none the less constitutes the constitutional charter of a Community based on the rule of law’ (Opinion 1/91 [1991] E.C.R. I-6079, para. 21).

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and both bolstered and challenged (to some extent) by the legal academic communities within the Member States. If the Court could claim that the Treaty of Rome was to be interpreted as a ‘constitutional charter’, it was because that very Court had been pursuing an agenda aimed at creating a constitutional supranational legal order. This project had been accepted or resisted by the Member State judiciaries to greater or lesser degrees in different areas of law. If this was indeed a ‘constitutional’ order, it was a patchwork, contingent one, quite uniquely ‘European’ and certainly a complex legal system. Perhaps it would be more accurate to refer to a ‘constitutional practice’ of European law, one dependent on the varying acquiescence of national judiciaries, than a truly ‘constitutional’ one. The Treaty of Rome did not necessary lead to this constitutional practice, but it contained enough elements to help propel, given the right political conjuncture and the right people, the fundamental breakthrough for the development of European law in a constitutional direction. This was undoubtedly the constitutionalism with a small “c” intimated by Walker. Yet, words can be momentous and influential, and the “constitutional charter” characterization arrived at the right time to both draw from and lift up new interpretations of European law developed by scholars such as Eric Stein. The Les Verts ruling then became increasingly referred to, and it helped to frame and legitimate the Court’s own case law by giving it a more coherent ideology. It was finally using the label that EU scholars had been using for some time.

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6 Law Meets History Interpreting the Van Gend en Loos Judgment

morten rasmussen

introduction Whether the jurist in the capacity as lawyer develops a convincing argument to win a case, or a judge attempts to strike the right interpretative balance in a judgment, an accurate understanding of earlier case law is often a crucial asset. But often – and this is certainly the case in the field of European Union (EU) law – available scholarly analysis of court cases rests on less than solid empirical ground. The Court of Justice (ECJ) has until 2016 kept its archive hermetically closed, and as a result, our understanding of case law has until now been based on the few publicly accessible sources, contemporary legal analysis of the case written by insiders and the hearsay of the lawyers involved in EU law.1 To make things worse, the accessibility to public sources is currently restricted to the court judgment and the position of the Advocates General, whereas the positions of the parties of the case and national governments are not made publicly available. Also, the early practice of producing minutes of the oral presentation of the case seems to have been abandoned. Only a timeconsuming visit to national or European archives can provide further documentation on the court cases of the ECJ. Recently, historians have done just that. By exploring private, state and European archives they have labored to overcome the hindrances laid before them by a secretive ECJ. The result has been an emerging historiography that analyzes the establishment and gradual development of European law from its early beginnings in 1950 to the 1980s.2

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The archive of the European Court of Justice is placed at the Historical Archive of the European Union in Florence and gives access to files older than thirty years. The archive includes administrative papers and the dossiers of case law. However, the latter are censored to remove any documents related to the délibéré. Key publications are 14(2) J. Eur. Integration Hist. (Special Issue) (2008); 21(3) Contemp. Eur. Hist. (Special Issue) (2012); and 28(5) Am. U. Int’l L. Rev. (Special Issue) (2013). See

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Beyond the contributions to a general history of European law, historians may have even more to offer jurists. This chapter argues that historical analysis of a court case – based on primary archival sources and using classical historical methodology – can contribute to an improved understanding of the material, legal and even political aspects of a case and judgment.3 What better way to illustrate this than the famous Van Gend en Loos case? The essay has been constructed with the aim to clarify the strength and weaknesses of what history can bring to legal analysis. In the first section, we briefly recapitulate the basic facts of the case. In the second section, we present a selection of the different interpretations of the Van Gend en Loos case drawn from the legal literature. While decades of sophisticated legal scholarship have produced very insightful analyses of the case, it is interesting to note that there is no consensus on what the case was about or the exact nature of the judgment. Finally, in the third section, a careful historical analysis based on archival sources attempts to clarify what the case was about in terms of facts, interests and law. The hope is not only to demonstrate that the jurist can benefit from reading historical scholarship but also to make the case that employing primary sources might add something new in legal scholarship. Hopefully, the ECJ’s opening of its historical archives signals that it will embark on a much more liberal sharing of information with the research community.4

the van gend en loos case in short The context of the famous Van Gend en Loos case is to be found in the early history of the European Economic Community (EEC), which was established by the EEC treaty in 1958. Together with the European Coal and Steel Community (ECSC) and the European Atomic Energy Community

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also Morten Rasmussen, Constructing and Deconstructing European “Constitutional” European Law: Some Reflections on How to Study the History of European Law, in Europe: The New Legal Realism 639 (Karsten Hagel-Sørensen, Henning Koch, Ulrich Haltern and Joseph Weiler eds., 2010) and Bill Davies, Resisting the European Court of Justice: West Germany’s Confrontation with European Law 1949–1979 (2012). From 2013 to 2016, a collective research project based at the University of Copenhagen brought together all historians in the new field in order to explore the history of European law between 1950 and 1993. For the project’s results, visit http://europeanlaw.saxo.ku.dk. I would like to thank the participants at the European University Institute seminar: Teaching Historical Methodology organized by Loïc Azoulai and Dieter Schlenker on 8 October 2014 for their comments on the relationship between history and law. Editorial. For History’s Sake. On Costa v. ENEL, André Donner and the Eternal Secret of the Court of Justice’s Deliberations, European Constitutional Law Review, 2014, vol. 10, Issue 2, 191–98.

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(EURATOM), the EEC belonged to the European Communities until they were merged in 1967. The main objective of the EEC was to establish a common market based on a customs union in three phases before 1970. The EEC treaty (chapter 1) laid down very precise guidelines for how the customs union was to be established through the internal dismantlement of tariffs between the Member States and the harmonization of external tariffs vis-àvis third countries.5 The actual adjustments of tariff levels were much less politically contentious than had been feared when negotiating the Treaties of Rome, when the French government in particular feared the consequences to its industry and employment.6 Nevertheless, the adjustment of tariffs and the parallel removal of quantitative restrictions on imports were highly technical questions under the guise of which national protectionism could still be maintained. The history of the Van Gend en Loos case starts with a comprehensive tariff reform enacted by the Benelux countries in 1960. In an effort to modernize their tariff system, they transposed their common tariffs to the new Brussels nomenclature by means of an international protocol. The changes in classification did occasionally lead to an increase in tariff rates for a small number of products. When this question was raised in the Dutch parliament before ratification, the government rejected the notion that it could be considered a breach of article 12 of the EEC treaty, because the general aim of the reform was in line with the general objectives of the EEC and, consequently, a certain leeway could be expected in something as complex as a tariff reform.7 Several Dutch firms did not agree with this assessment and launched a number of legal actions against the government. By August 1962, in a case involving the Van Gend en Loos firm, the Dutch tax court Tarifcommissie sent a preliminary reference to Luxembourg to inquire whether article 12 had direct effect in the sense that it created rights for individuals that national courts must protect and whether existing Dutch law (the Benelux convention) breached European law. Under Dutch constitutional law, the first question was of some importance because international law that had direct effect – or was ‘binding on anyone’ – had primacy vis-à-vis Dutch law. Before the ECJ, the Commission emphasized that this preliminary reference was of particular importance to the future of European law. The 5 6

7

The customs union of the EEC was successfully established by 1967. Laurent Warlouzet, Le choix de la CEE par la France, L’Europe économique en débat de Mendès France à de Gaulle 1955–1969, Comité pour l’histoire économique et financiére de la France, Paris, 2011, 21–100. Handelingen van de Tweede Kamer der Staten-Generaal 1958–9 Bijlage 5314 no. 7 and HTK 1958–9 (02–12-1958) 334.

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Commission argued that European law went beyond international law based on mutual contracts between states and constituted a genuine droit communautaire. This assertion was drawn on the basis of the objectives of the EEC treaty and the special nature of the institutions – the same elements of the treaty that the Commission had termed ‘constitutional’ in its position on the Borsch case a year earlier.8 The ECJ held exclusive competence to interpret European law and decide which European legal norms had direct effect. As a result, national courts had to follow the guidelines of the ECJ when they applied European law, and not their respective constitutional rules guiding how to receive and apply international law. That the preliminary reference system in this manner would come to complement the infringement procedures under articles 169–171 was welcomed because it would enhance the legal security of economic actors in the future common market. In this case, due to the special nature of European law and because article 12 was formulated in a clear and unambiguous manner, it had direct effect and created rights for national citizens before national courts. In addition, European legal norms with direct effect should be considered to have primacy vis-à-vis contradicting national law whether prior or antecedent.9 This was the first time the Commission had presented a coherent overall vision for the development of European law.10 Three Member States – the Netherlands, Belgium and Germany – and the Advocate General of the ECJ, Karl Roemer, did not follow the lead of the Commission. They all rejected the notion that article 12 had direct effect, arguing instead that the article was directed to states. The Dutch and Belgian governments even disputed the jurisdiction of the ECJ because the preliminary question was connected to the application of European law under Dutch constitutional law. Advocate General Roemer sympathized with the general vision of European law presented by the Commission, but he did not agree with the consequences drawn with regard to article 12. Instead, he argued that a number of articles were explicitly directed to the Member States and consequently could not have direct effect. In addition, if the court interpreted article 12 to have direct effect, this would have serious constitutional

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Historical Archive of the European Commission, Brussels (HAC) BAC.371/1991.577–578. Mémoire, Oct. 25. Mémoire de la Commission de la Communauté Economique Européenne, Brussels, Nov. 7, 1962, HAC.BAC.371/1991.620. For a detailed history of the legal service of the High Authority of the European Coal and Steel Community and the European Commission 1952–1965, see Morten Rasmussen, Establishing a Constitutional Practise of European Law: The History of the Legal Service of the European Executive, 1952–1965, Contemporary European History, vol. 22, no. 3, 2012, 173–97.

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ramifications at the national level because not all Member States granted international law primacy. The result would be a lack of uniformity and legal security.11 The judgment of the ECJ pronounced on 25 February 1963 followed the lead of the legal service of the Commission, but did not follow all of the recommendations. The court first rejected outright the argument of two of the Member States that it did not have jurisdiction. The ECJ was willing to accept any preliminary reference from national courts so long as they touched upon the interpretation of European law. The court followed the legal service with regard to the analysis of the nature of European law. It argued that the objective of the EEC treaty, i.e. the common market, implied that the treaty went beyond a traditional agreement of international law that merely created mutual obligations between the contracting states. This was confirmed by the preamble of the treaty, which referred to the people, not to the governments, and also by the establishment of institutions with sovereign rights, the exercise of which had an impact on both states and citizens. Finally, the preliminary reference mechanism in article 177, which gave the ECJ the task to ensure the uniform interpretation of European law, confirmed that the states acknowledged that individuals could invoke European law before national courts. Based on this entire analysis it was clear, according to the court, that European law constituted a ‘new legal order of international law’ for the benefit of which the states had limited their sovereign rights. This new legal order created both rights and obligations on individuals. From this analysis of the nature of European law, it deducted that article 12 necessarily had direct effect and created rights for national citizens. The preliminary reference mechanism complemented the infringement procedure in securing these rights. However, the court refrained from introducing the primacy of article 12.12 How has the case and judgment been interpreted in the legal literature?

legal scholarship and the van gend en loos case The European Court of Justice’s official list of scholarly articles discussing specifically the Van Gend en Loos case includes more than seventy articles, 11

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Conclusions de M. L’avocat général Karl Roemer dans l’affaire 26/62. HAC.BAC.371/1991.621 and Noreen Burrows & Rosa Greaves, The Advocate General and EC Law 192–94 (2007). Judgment of the Court of 5 February 1963. NV Algemene Transport - en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration. Reference for a preliminary ruling: Tariefcommissie - Netherlands. Case 26–62.

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and that is probably much too low a figure.13 The publications revisited here thus constitute only a small selection of articles, but they do feature some of the most prominent analyses of the judgment. What strikes one when reading the various analyses of the Van Gend en Loos case and judgment is the extent to which significant disagreement still exists over how to interpret it. The differences mostly concern how to understand the historical context within which the judgment took place. Likewise, there is relatively little analysis of the motives and interests of the key actors in the case. Finally, the legal doctrines pronounced in the judgment are interpreted in different ways by different authors. Let me attempt to summaries key interpretations and differences. Beginning with the historical context, a key argument in legal scholarship has been that the Van Gend en Loos judgment was the logical consequence of the Treaties of Rome and of earlier ECJ case law. In a period of increasing political pressure from French president Charles de Gaulle on supranational Europe, the court simply kept the Member States to their word.14 To some authors, the material matters at stake in the Van Gend en Loos case were crucial because they concerned an attempt by a state to backpedal on the commitment to create the common market.15 Other authors have argued that the material impact of the case was minimal, as it was first and foremost a case of great doctrinal importance.16 Which interests and legal motives were at stake? These are questions not particularly well answered by most legal literature, which focus mainly on the legal doctrines pronounced by the ECJ. The main exception is the American jurist Eric Stein, who has argued that the legal service of the Commission was

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http://curia.europa.eu/jcms/jcms/Jo2_7083/ (accessed 1 January 2015). For example: Speech by Joseph Weiler made at the ECJ’s 50 years’ celebration of Van Gend, 12 May 2013, http://player.companywebcast.com/televicdevelopment/20130513_1/en/player; Pierre Pescatore and Van Gend en Loos, 3 February 1963 – A View from Within, in Miguel Poiares Maduro and Loïc Azoulai (eds), The Future of European Law – Revisiting the Classics in the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, 3–8; David Edwards, Judicial Activism – Myth or Reality? Van Gend en Loos, Costa v. ENEL and the Van Duyn Family Revisited, in Essays in the Honour of Lord Mackenzie-Stuart 29 (Angus I. K. Campbell and Meropi Voyatzi eds 1996); and Robert Lecourt, L’Europe des Juges, Brussels: Bruylant, 1976. Pierre Pescatore and Van Gend en Loos, 3 February 1963 – A View from Within, in Miguel Poiares Maduro and Loïc Azoulai (eds), The Future of European Law - Revisiting the Classics in the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, 3–8. Daniel Halberstam, Pluralism in Marbury and Van Gend, in Miguel Poiares Maduro and Loïc Azoulai (eds), The Future of European Law - Revisiting the Classics in the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, 26–36.

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decisive in developing the judgment.17 Few other scholars have paid much attention to the Commission. Instead, their focus has been on how the ECJ through the judgment asserted its own role as a court of last instance.18 The court’s claim that European law constituted a ‘new legal order of international law’ with all the consequences this entailed has been seen by many as the key statement on the nature of European law that started a ‘constitutionalization’ of the treaties.19 The legal meaning of the judgment still divides authors. Some of the most classical analyses have argued that the ECJ broke with the tradition of international law (Danzig judgment of the International Court of Justice) by not exploring the intention of the contracting parties when deciding to what extent article 12 of the EEC treaty had direct effect and created rights for individuals.20 Instead, the ECJ offered its famous overall interpretation of the nature of the Treaties in order to create a basis for the direct effect of treaty norms with sufficient clarity. Other authors differ, however, and have recently pointed out that article 12 interpreted under international law would have led to largely the same conclusion with regard to the direct effect of article 12.21 The ‘new legal order’ rhetoric was superfluous22; the

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Eric Stein, Lawyers, Judges and the Making of a Transnational Constitution, 47(1) Am. J. Int’l L. 1 (1981) Franz C Mayer and Van Gend en Loos: The Foundations of a Community of Law, in Miguel Poiares Maduro and Loïc Azoulai (eds), The Future of European Law - Revisiting the Classics in the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, 16–25. Pierre Pescatore and Van Gend en Loos, 3 February 1963 – A View from Within, in Miguel Poiares Maduro and Loïc Azoulai (eds), The Future of European Law - Revisiting the Classics in the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, 3–8. Bruno De Witte, The Continuous Significance of Van Gend en Loos, in Miguel Poiares Maduro and Loïc Azoulai (eds), The Future of European Law – Revisiting the Classics in the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, 9–15; Joseph H. H. Weiler, The Transformation of Europe, 100 Yale L.J. 2403 (1990–91); and Eric Stein, Lawyers, Judges and the Making of a Transnational Constitution, 47(1) Am. J. Int’l L. 1 (1981). Joseph Weiler, Rewriting Van Gend en Loos: Towards a Normative Theory of ECJ Hermeneutics, in Ola Wiklund (ed), Judicial Discretion in European Perspective, The Hague: Kluver Law International, 2003, 150–64; and Ole Spiermann, On Law or Policy in the European Court of Justice: Van Gend en Loos and Costa v. E.N.E.L., in Henning Koch, Karsten Hagel-Sørensen, Ulrich Haltern and Joseph Weiler (eds), Europe: The New Legal Realism, Århus: DJØF Publishing, 2010, 715–28. See also the classic work by Michel Waelbrock, Traite´s internationaux et jurisdictions internes dans les pays du Marche´ commun (1969) that made the same argument. Ole Spiermann, On Law or Policy in the European Court of Justice: Van Gend en Loos and Costa v. E.N.E.L., in Henning Koch, Karsten Hagel-Sørensen, Ulrich Haltern and Joseph Weiler (eds), Europe: The New Legal Realism, Århus: DJØF Publishing, 2010, 715–28.

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ECJ did not really need a new hermeneutic.23 A key element in the judgment was consequently not that article 12 would have direct effect, but that the ECJ took it upon itself to decide which norms of the Treaties of Rome would have direct effect. Through this move the ECJ sidestepped the different approaches by national constitutional law to the reception of international law on basis of which national courts would normally decide which international legal norms would have direct effect, and thereby removed a source of fragmentation in the enforcement of European law in the national legal orders.24 Finally, the core of the judgment was to most authors that the ECJ granted individuals’ rights through the direct effect of European legal norms of sufficient clarity.25 However, others emphasized the broader interpretation of the ECJ of European law as a ‘new legal order of international law’ with particular properties as the major breakthrough in terms of legal interpretation that ‘constitutionalized’ the Treaties of Rome.26 The court in this way offered an entire system with crucial implications to the way European law should be received in the Member States. Not only did the ECJ as mentioned decide when European legal norms had direct effect; the system also implied that the preliminary reference procedure would complement the infringement procedure in policing the correct implementation and application by Member States of European law. National governments would now potentially face their own courts when breaching European law, and they could not move the

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Joseph Weiler, Rewriting Van Gend en Loos: Towards a Normative Theory of ECJ Hermeneutics, in Ola Wiklund (ed), Judicial Discretion in European Perspective, The Hague: Kluver Law International, 2003, 150–64. Bruno De Witte, The Continuous Significance of Van Gend en Loos, in Miguel Poiares Maduro and Loïc Azoulai (eds), The Future of European Law – Revisiting the Classics in the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing: 2010, 9–15; and Franz C Mayer and Van Gend en Loos: The Foundations of a Community of Law, in Miguel Poiares Maduro and Loïc Azoulai (eds), The Future of European Law – Revisiting the Classics in the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, 16–25. Joseph H. H. Weiler, The Transformation of Europe, 100 Yale L.J. 2403 (1990–91); Eric Stein, Lawyers, Judges and the Making of a Transnational Constitution, 47(1) Am. J. Int’l L. 1 (1981); Bruno De Witte, The Continuous Significance of Van Gend en Loos, in Miguel Poiares Maduro and Loïc Azoulai (eds), The Future of European Law – Revisiting the Classics in the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, 9–15; Franz C. Mayer, Van Gend en Loos: The Foundations of a Community of Law, in Miguel Poiares Maduro and Loïc Azoulai (eds.), The Future of European Law – Revisiting the Classics in the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, 16–25. Pierre Pescatore and Van Gend en Loos, 3 February 1963 – A View from Within, in Miguel Poiares Maduro and Loïc Azoulai (eds), The Future of European Law – Revisiting the Classics in the 50th Anniversary of the Rome Treaty, Oxford: Hart Publishing, 2010, 3–8; Robert Lecourt, L’Europe des Juges, Brussels: Bruylant, 1976.

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question to the European level.27 The enforcement logic was in place even if the question of the primacy of European law was postponed to a more opportune moment.28 With all these different interpretations of the Van Gend en Loos judgment discussed, let us now turn towards a close examination of the primary sources available.

letting the sources speak: an historical analysis of the van gend en loos judgment What have been presented until now are the interpretations of the Van Gend en Loos case and judgment by some of the most prominent jurists of the last fifty years. However, with the exception of Stein (who to some extent was an insider, having his office in the couloir of the legal service when the case was decided), all the legal scholars cited could only access the public material related to the case.29 What happens if we consult available archives, be they private or public, and reconstruct the history of Van Gend en Loos case on this new basis? And what kind of overall understanding of the case emerges if we place this new historical analysis in the wider context of recent historiography on the European integration process in the 1960s? The Van Gend en Loos case is an interesting case study for historical analysis due to the relatively rich historical records it has left in private, state and European archives.30 This even includes the ECJ due to a memorandum saved from the délibéré between the judges and made public with an exceptional permission of the court.31 Based on the archival records we can thus trace the development of the Van Gend en Loos case through national and European institutions and consequently analyze in great detail exactly what kind of legal and substantial questions were at stake in the case, and how contemporary actors perceived them. What emerges from the archival records is first and foremost the central role played by the legal service of the Commission. The Commission of the EEC 27 28

29

30

31

Joseph H. H. Weiler, The Transformation of Europe, 100 Yale L.J. 2403 (1990–91). Eric Stein, Lawyers, Judges and the Making of a Transnational Constitution, 47(1) Am. J. Int’l L. 1 (1981). Eric Stein, Thoughts from a Bridge – a Retrospective of Writings on New Europe and American Federalism 472 (2000). Key archives are the Gaudet archive placed at the Jean Monnet Foundation in Lausanne and the Archive of the European Commission in Brussels. La formazione del diritto europeo: Gionata di studio per Alberto Trabucchi nel centenario della nascita (2008).

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had, under the leadership of the German president Walter Hallstein, chosen an overall federalist approach to European integration. Hallstein hoped to develop the European Communities (EC) towards a European federation, even if he was well aware of the great difficulties in achieving this. As a professor of international, private and civil law, Hallstein had a keen eye for the importance of law to his political objectives. In the legal service of the EEC Commission, we find a French conseiller d’état, Michel Gaudet, who had been part of the legal service also in the ECSC since 1953. In his years in Luxembourg and Brussels, Gaudet developed a similar outlook on the potential of European law. Even if the Treaties of Rome were ambiguous, it was crucial to convince European jurists that they had something federal in them, if not a full federal state.32 This was not without its challenges. Both Hallstein and Gaudet had participated in the negotiations on the EEC treaty, the former as head of the German delegation and Gaudet as ECSC representative in the so-called groupe de rédaction, the committee that would give legal shape to the treaty and design the judicial system. The result of the negotiations had, however, been much more modest with regard to the institutional setup and legal dimension of the new Community than the two pro-Europeans would have liked. A consensus had existed during the negotiations to moderate the supranational institutions compared to the ECSC and strengthen the Council of ministers. As a consequence, the EEC treaty was largely designed along the norms of international law directed to national governments and offering national administrations and national courts full autonomy with regard to the implementation and application of European legislation. While individual litigants could sue the European institutions for misuse of their powers (article 173), national citizens were not given any role in policing whether national administrations and courts faithfully upheld European law in the Member States. Instead, a relatively weak infringement procedure (articles 169–171) was supposed to do this. At the same time, however, the proEuropean jurists in the groupe de rédaction had also introduced a number of clauses that pointed in the direction of constitutional law. These included in particular the mechanism of preliminary reference in article 177. Finally, the objective of the EEC treaty, the common market, was a remarkably farreaching proposition that, if successful, would transform the community both institutionally and politically.33 32 33

Eric Stein archive, Box 6, Gaudet to Stein, 18 March 1958. Anne Boerger, Negotiating the Foundations of European Law, 1950–57: The Legal History of the Treaties of Paris and Rome, 21(3) Contemp. Eur. Hist. 339, 350–51 (2012).

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From 1958 onwards, Gaudet and the legal service continued to pursue a federal, or what was also termed constitutional, interpretation of the Treaties of Rome. This was done in two ways. On the one hand, Gaudet promoted the establishment of a professional and academic field of European law. This happened through contacts to interested professionals and academics in the Member States and bore fruit in 1961 when the Fédération Internationale pour le Droit Européen (FIDE) was founded as an umbrella organization on top of national associations of European law. FIDE would be partially financed by the Commission in the 1960s. It held conferences every second year on topical questions of European law and generally facilitated the work of the legal service. On the other hand, Gaudet pursued a constitutional position when it came to interpreting European law before the ECJ. This could be detected in the Borsch case from 1961, for example, when the legal service argued that while the Treaties of Rome had clear constitutional traits, they were not just traditional international treaties.34 When the first preliminary references began to trickle from Member State courts towards Luxembourg, Gaudet and the legal service were ready to seize the moment. Gaudet’s own thinking about the nature of the European legal order had taken shape in the early 1960s. What he was looking for was the establishment and enforcement of a European legal order that could underpin the common market. The EEC treaty in all its ambiguity did not solve this task. When preparing the legal service position on the Van Gend en Loos case, Gaudet identified several major problems related to the question of enforcement of the Treaties of Rome. He had no doubt that, according to the general traditions of receiving international law, national courts would probably apply article 12 of the EEC directly. The problem with this, however, was twofold. First, allowing national courts to interpret which European legal norms had direct effect would endanger the uniformity of the European legal order. Second, national constitutions and constitutional traditions differed on the status of international law vis-à-vis later enacted national law. Some countries already gave international law primacy or at least had constitutions that did not hinder this, but several countries (including France, Italy and Germany) did not guarantee this. International law thus did not solve the problem of how to secure a coherent and enforceable European legal order. The alternative interpretation of article 12 as being addressed merely to the national governments also had negative repercussions on the establishment of a solid European legal order. This interpretation arguably had the best textual foundation 34

Case 13/61, Kledingverkoopbedrijf de Geus en Uitdenbogerd v. Robert Bosch GmbH and Maatschappij tot voortzetting van de zaken der Firma Willem van Rijn, 6 April 1962 E.C.R. 45.

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in the EEC treaty, but would (according to Gaudet) bar individual citizens from removing national law in contradiction with European law before national courts. In addition, it only left the infringement procedure as a means to force Member States to enforce European law, which was hardly sufficient. Instead, Gaudet suggested an alternative interpretation which was based on the allegedly special, constitutional nature of the treaty that found European legal norms that were clearly formulated and could be construed as a proper ‘regle de droit’ to have direct effect. In addition, it was crucial that it was the ECJ through the preliminary reference mechanism that had exclusive competence to identify which legal norms had direct effect and thus ensured uniformity of interpretation. Finally, the treaty norms that had direct effect should be given primacy to prior and antecedent national law.35 With the acceptance by the Commission collegium under the leadership of Hallstein, this position was presented to the ECJ.36 The three Member States that had chosen to present positions during the court case as well as the Advocate General Karl Roemer picked the second interpretation mentioned by Gaudet above. While Belgium and the Netherlands disputed the jurisdiction of the ECJ in a case dealing with the application of European law in Member States, all national governments and Roemer both agreed that article 12 was directed to national governments.37 Roemer presented a coherent analysis and showed how a whole category of articles dealing with the technical field of tariffs was in fact directed to Member States. If they were given direct effect, this would lead to a different application of European law in different Member States due to the lack of primacy of international law in some Member States and in the end create legal insecurity for national citizens.38 Exploring the positions of the national governments to European law in the early 1960s, it seems quite clear that most national governments and administrations seemed to believe that article 12 was

35

36

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38

Note à M. Jean Rey, Président du Groupe Juridique et à M. Caron, Président du Groupe du Marché Intérieur. Objet: Observations de la Commission devant la Cour de Justice au sujet des demandes préjudicielles de la “Tariefcommissie” néerlandaise, HAC.BAC.371/1991.620. Questions préjudicielles posées à la Cour de Justice par la « Tariefcommissie » néerlandaise en vertu de l’article 177—CEE (doc. S/06803/62). Projet de P.V. 204ème réunion Commission, HAC.BAC.371/1991.620. Stellungnahme der Regierung der Bundesrepublik Deutschland. E 2—Jan. 11, 1998, Mémoire du Gouvernement du Royaume des Pays-Bas, Case 26/62, at n.71; Mémoire de l’État belge, Doc. no. D. 123/E.L./N.126/S.F.1; and Rapport d’audience dans l’affaire 26/62. HAC.BAC.371/ 1991.621. Conclusions de M. l’avocat général Karl Roemer dans l’affaire 26/62. HAC.BAC.371/1991.621, and Noreen Burrows & Rosa Greaves, The Advocate General and EC Law 192–94 (2007).

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directed to the states and not to the citizens. To the French administration, which did not intervene in the case, the belief was that the ECJ should only interpret European law at the general and theoretical levels and did not have the ‘pleine competence sur les faits et les moyens’.39 The ECJ was not supposed to use the preliminary reference mechanism to intervene indirectly into the application of European law by national courts. Similarly, the view of the German administration (which was dominated by the Economics Ministry) was that the Treaties of Rome needed subordinate legislation by the Council to enter the national legal orders. The key concern was to protect the basic rights of German citizens against encroaching European legal norms.40 Clearly, the expectancy by national governments and administrations went in the opposite direction of the Commission’s position. Inside the ECJ, two new judges who had been added to the bench during 1962 would play a decisive role in the deliberations over the Van Gend en Loos case. Robert Lecourt was a French Christian Democrat politician who had played a major role in French politics in the 1950s and was a firm believer in a united Europe. Alberto Trabucchi was an Italian law professor from Universita’ degli studi di Padova and one of the leading authorities in private law. By the means of the aforementioned memorandum by Trabucchi, it is possible to enter the délibéré of the court. While the picture given by this precious document cannot give us the full understanding of the dynamics inside the collegium of judges, it does offer some insights into the thinking of what would become the majority of judges behind the judgment. What emerges from the memorandum and some oral testimonies is that the juge rapporteur – the Luxembourg judge Leon Hammers – apparently followed the position of Advocate General Roemer and apparently got the backing of the court. However, Trabucchi and Lecourt came out against this conservative position. Lecourt allegedly did this for outright political reasons because he wanted the court to transform the EEC into a federation. Steeped in the tradition of the famous Italian jurist Piero Calamendrei, Trabucchi was concerned with individual rights. To Trabucchi, just as Gaudet, there was little doubt that article 12 was self-executing under international law. But did it create rights for citizens to be upheld by national courts, and how could the ECJ best secure 39

40

This was the view expressed when the French administration prepared its position in the Borsch case. Plan d’exposé oral. Objet: Affaire Bosch, Jan. 15, 1962. Archives Nationales, Secrétariat general du Comité interministériel pour les questions de cooperation économique européenne (SGCI). Ministère de l’économie et des finances. Archives Nationale. SGCI. Ministère de l’économie et des finances. 19771466/244. Bill Davies, Resisting the European Court of Justice. West Germany’s Confrontation with European Law, 1949–1979 (Cambridge University Press 2012), at 156–58.

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individual rights? Trabucchi did not find that international law could ensure the uniformity of interpretation that was crucial for economic actors in the future common market. Instead he proposed that the direct effect of article 12 should be based on what he considered the underlying system of the EEC Treaty, which was fully autonomous and going beyond international law. He advised that the primacy of European law should wait ‘pour le moment’ because of the constitutional difficulties this would impose on Italy and Germany. In the end, Lecourt and Trabucchi convinced Rino Rossi and Louis Delvaux to support their position, and the famous Van Gend en Loos judgment was settled.41 To what extent did national governments accept the judgment, considering that three of the most pro-European governments had opposed direct effect? The answer to this question is complex. First, since the practical consequences of the judgment were negligible at first, few governments paid any serious attention to what the court had done in the short or even medium term. Second, even if certain voices of critique in national administrations probably existed in most Member States, it quickly turned out that most governments did not want a reform of the European legal system. By the end of the 1960s, the French government openly discussed limiting access to the system of preliminary references to only high courts, thereby reducing the 41

The evidence for the position of judges inside the court is fragile and admittedly circumstantial, but it is the best we have at the moment. The memorandum by Trabucchi does, however, give us solid information about the motivation and arguments of the majority of the court that backed and wrote the judgment. The memorandum from Trabucchi is reproduced in La formazione del diritto europeo: Giornata di studio per Alberto Trabucchi nel centenario della nascita, Padua: Casa Editrice Dott. Antonio Milani, 2008, at 213–23. While it mentions the conservative stance of the rapporteur, Hammers, it does not explicitly point out who supported this original position. The precise split between the judges we have from an interview with the référendaire of Trabucchi, Paolo Gori (interview in April 2008, conducted with Antoine Vauchez), who claimed that Hammers, supported by Otto Riese (G) and President André Donner (N), promoted a conservative judgment along the lines of the Advocate General’s recommendation. Then Lecourt and Trabucchi went against this position, presenting their own memoranda, and managed to secure the support of Louis Delvaux (B) and Rino Rossi (I). The presumed position of Donner is corroborated by his position in two Dutch constitutional committees (Van Schaik and Kranenburg committees) in the 1950s, in which he fought from a minority position against the primacy of international law in the Dutch constitutional order, defending the prerogatives of parliament. Karin van Leeuven, On Democratic Concerns and Legal Traditions: The Dutch 1953 and 1956 Constitutional Reforms ‘Towards’ Europe, Contemporary European History, vol. 21, part, 3, 2012, 357–75. See also Donner’s critique of a federal approach to European law in Andre´ Donner, The Role of the Lawyer in the European Communities, The Rosenthal Lectures 1966, Edinburgh University Press, 1968, 1–27, which Pierre Pescatore argued constituted Donner’s conditional surrender to the Van Gend en Loos judgment. Pescatore was judge from 1968 onwards (interview by the author with Pierre Pescatore, Jan. 2007).

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crucial stream of cases at the ECJ. However, the French government was firmly opposed by the other five governments, which now seemed to largely back the particular interpretation of European law that the ECJ had constructed.42 Finally, even if a majority of states did not dismantle the legal order constructed by the ECJ, this did not mean that they actually followed and applied the legal principles expounded by the court in its case law. Varying from state to state, the acceptance by national administrations and courts of the doctrines and decisions of the ECJ were often slow and incoherent, in some cases even marred by systematic neglect. In several countries, the constitutional claim by the ECJ was rejected by the high court. Eventually, it would take the political importance of the Single European Act in the last half of the 1980s to get the clear backing of all Member States. Even to the most reluctant state, France, it was simply inconceivable to develop the international market without accepting the legal foundations on which it would be built. As a result, by the late 1980s and early 1990s, the national high courts of France, Britain and Germany de facto accepted the legal order developed by the ECJ, but crucially they did this while rejecting the constitutional claim and highlighting how European law was based on the delegated competences of the national constitutions.43

conclusion Taking this new history of the Van Gend en Loos case into consideration, what did it mean for the interpretation of the judgment? I would argue that it offers a more solid and clear understanding of the legal questions at stake in the case and in the judgment. We now have a well-documented understanding of the position of the legal service, and while the evidence from the délibéré is fragile, it does give us some key insight into the concerns and logic of the court’s thinking. Let us first place the court case in its wider historical context. It is quite clear that the Van Gend en Loos judgment did not flow logically from the EEC Treaty, as claimed by several legal authors. Rather, it went against the decision of the groupe de rédaction with regard to the access of individuals to the ECJ and arguably also deviated from the overall design of the EEC treaty that to a 42

43

Vera Fritz, ‘The First Member State Rebellion? The European Court of Justice and the negotiations of the Luxembourg protocol’, European Law Journal 21 (2015). For a more detailed analysis, see Morten Rasmussen, Revolutionizing European law: A History of the Van Gend en Loos Judgment, ICON, vol. 14, no. 1, 2014, 160–63.

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large extent relied on subordinate legislation by the Council to make the broader legal norms of the treaty concrete. This is not the place to discuss the legal justifications for the judgment, but it seems quite fair to say that the court chose a distinct and somewhat audacious interpretation of the treaty over several more moderate alternatives. The ECJ took a first decisive step towards establishing a European legal order along proto-federal lines. As such, the judgment was part of the broader political dispute between those forces in the EEC that promoted the federalization of the EEC, including the Hallstein commission, and in particular the French president and government that disputed the independence of the supranational institutions. Pushed by the commission and due to the changes in the composition of judges, the court sided with the federalists. The broader political battle over the nature of the Community reflected the relatively open nature of the EEC treaty and was only settled at the end of the Empty chair crisis of 1965–66, when France finally accepted the existing treaties, while the other Member States informally accepted the introduction of a national veto right. The independence of the court vis-à-vis the Member States and the difficulties of reforming its status meant that the ‘new’ European legal order was locked in. As a result, the Community would become more dominated by national governments after 1966 while at the same time a proto-federal legal system would gradually evolve through the case law of the ECJ. What were the legal questions at stake in the judgment? Several authors have argued that the Van Gend en Loos judgment broke with the tradition of international law (Danzig judgment by the International Court of Justice), when justifying the direct effect of article 12 not by reference to the intention of the contracting parties, but by the general scheme of the EEC treaty. Others have argued that there was no need for a new hermeneutic because an interpretation under international law would also have led to the conclusion in favour of the direct effect of article 12. On the basis of the evidence, it seems clear that both Gaudet and Trabucchi understood that an interpretation along the lines of international law would come to the conclusion that article 12 had direct effect and according to Gaudet would likely be applied by national courts. But this did not mean that a new hermeneutic was superfluous. For Gaudet, the key point was how to avoid the problems related to the parallel application of international law by the six Member States, namely the lack of uniform application (due to different constitutions and traditions of receiving international law) and the lack of primacy in several Member States. A key element in the judgment was consequently, as de Witte has pointed out, that the judgment offered the ECJ the sole competence to judge which legal norms of the Treaties of

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Rome had direct effect. This step ensured in theory the uniform application of European legal norms by national courts. What was the legal core of the judgment? Some have argued that it was the securing of individual rights for national citizens, whereas others have emphasized the court’s declaration of a ‘new legal order of international law’. The empirical analysis answer points in both directions, but also shows how interlinked these two questions are. To Gaudet, the judgment ought to secure that European law would be coherent. European law should be interpreted and applied in a uniform way, it should have primacy vis-à-vis national law and it should be efficiently enforced. The design of the European legal order established with the ‘new legal order of international law’ claim largely addressed Gaudet’s concerns. The court would exclusively interpret whether European legal norms had direct effect and the infringement procedure would be complemented by the mechanism of preliminary references in ensuring that national governments and administrations would implement European law correctly. The court did not opt for the primacy of European law, but if we take Trabucchi’s memorandum as proof for the future intention of the court, it was certainly only a matter of time before the court would do so. However, at the same time, the Trabucchi memorandum also proves just how concerned a key judge was with securing individual rights. The logic of the memorandum was that international law does not sufficiently well secure individual rights because it cannot ensure the uniform application of European law. The alternative, according to Trabucchi, was exactly the court’s adoption of a ‘new legal order of international law’, an alternative legal system based on a constitutional interpretation of the treaties. In any case, the concerns of Gaudet and Trabucchi were both met and combined in the judgment. To conclude, the new hermeneutic and the pronounced ‘new legal order of international law’ was not superfluous in the Van Gend en Loos judgment. Rather, it was at the very core of the judgment because it addressed what were considered key problems of letting the Member States interpret European law as just another version of international law through their usual constitutional clauses of receiving international law. At the same time, the judgment was a very conscious choice in favour of securing the individual rights of Member State citizens somewhat more firmly than had been the intention of the designers of the treaties, be they the members of the groupe de rédaction or the contracting parties, or what the court considered would be the case if European law was interpreted as traditional international law in the Member States. Finally, the ‘new legal order’ claim constituted a significant step towards consolidating the EC as something different than a traditional international organization.

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The analysis in this chapter demonstrates the extent to which primary sources and classical historical methodology may improve our understanding of the case law of the ECJ both in terms of the social history of a particular case and of the legal questions involved. While historians would relish the opportunity to offer new and empirically more grounded interpretations of famous ECJ cases, there is no reason why legal scholars could not use primary sources and, with a modest dose of historical methodology, produce a more empirical solid and legally refined doctrine. Until recently, the biggest obstacle has been the ECJ. This article was based on a unique selection of primary sources that brought us right inside the délibéré of the court. Hopefully the new openness of the ECJ will lead to a boom in archive-based research on the history of European law.

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7 Goodbye to All That Commission v. Luxembourg & Belgium and European Community Law’s Break with the Enforcement Mechanisms of General International Law

william phelan introduction The ECJ’s 1964 decision in Commission v. Luxembourg & Belgium, the Dairy Products case, is often understood only as an example of the ECJ’s strict interpretation of the obligations contained in Article 12 of the Treaty of Rome, as one of many instances where the ECJ rejected defenses advanced by the Member States in the context of the Article 169 procedure, or sometimes as the opportunity taken by the ECJ to revise its famous description of the Community law as a “new legal order of international law”. The significance of this decision changes, however, when instead viewed within the context of the enforcement mechanisms of general international law and other traderelated treaty regimes. From that alternative perspective, Commission v. Luxembourg & Belgium can be understood as the essential decision that marks the revolutionary break between Community law and more ordinary forms of international law. This ECJ decision is thus both a major event in international legal history in its own right and a judgment that should be understood as intensely interconnected with the ECJ’s two most celebrated cases, Van Gend en Loos and Costa v. ENEL.

the dairy products case On 13 November 1964, the European Court of Justice delivered its judgment on a dispute between the European Commission and two Member States of the European Economic Community, Luxembourg and Belgium.1 The dairy 1

I would like to thank Bill Davies and Fernanda Nicola for their generous invitation to participate in the ‘EU Law Stories’ project, and Peter Lindseth, once again, for his encouragement of my interest in the ‘Dairy Products’ case.

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products market organization operated together by the Luxembourg and Belgian governments had, by the operation of intervention mechanisms, effectively increased the tariffs on imports of dairy products – powdered milk, sweetened condensed milk in tins, various cheeses – from other Member States. The Commission contended this policy was contrary to the ‘standstill’ requirement set out in Article 12 of the Treaty of Rome, a requirement that Member States refrain from any increases in charges equivalent in effect to customs duties in intra-Community trade after the Treaty came into force. The Commission therefore employed the infringement procedure provided for in Article 169 of the Treaty of Rome, issuing a ‘reasoned opinion’ on 3 April 1963.2 As the Member States had failed to comply with the opinion within the specified time period, the case was argued before the ECJ in late 1964. The Court agreed with the Commission, finding that the Luxembourg and Belgian governments had failed to fulfill their obligations under the Treaty of Rome.3 The Court found that the ‘standstill’ provision contained in Article 12 of the Treaty constituted an “essential rule” and any possible exception therefore would have to be both “strictly interpreted” and “clearly provided for.” Articles 39–46 of the Treaty, which provided for exceptions to the application of the rules of the Common Market to agricultural products, did not contain any provision that expressly conflicted with the prohibition of new customs barriers in the agricultural sector, and thus did not contain anything derogating from Article 12. The Court therefore found that Luxembourg and Belgium had committed a violation of Article 12 of the Treaty.4 2

3 4

Article 169 of the Treaty of Rome provided for an infringement procedure for circumstances where the Commission considered that a Member State had failed to fulfill an obligation under the Treaty. Under that procedure, the Commission was first to deliver a reasoned opinion on the matter after giving the Member State concerned the opportunity to submit its observations, and, then, if the State did not comply with the opinion within the period laid down by the Commission, the Commission could bring the matter before the European Court of Justice. Article 171 of the Treaty of Rome provided that where the ECJ found that a Member State had failed to fulfill an obligation under the Treaty, the State would be required to take the necessary measures to comply with the judgment of the Court of Justice. As many commentators have noted, Article 171 of the Treaty of Rome provided only a “declaratory” role for the Court’s decision as no sanctions followed from such a finding (e.g. J. H. H. Weiler, ‘The Transformation of Europe’ (1991) 100 Yale Law Journal 2403–83 at 2420). Note that these treaty provisions have been renumbered as the European treaties have been amended and revised in subsequent treaty-making. Because the focus of this paper is on one of the earliest decisions of the Court, we have used the original numberings of treaty provisions contained in the founding Treaty of Rome. Cases 90&91/63, Commission v. Luxembourg & Belgium, [1964] ECR 625. For a discussion of the Article 12 related aspects of the decision, see I. Samkalden, ‘Commission of the E.E.C. v. Grand Duchy of Luxembourg and the Kingdom of Belgium’ (1964–65) 2 Common Market Law Review 340–48.

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As part of their legal strategy, however, the Luxembourg and Belgian governments had raised an interesting point of legal principle. The Luxembourg and Belgium marketing organization for dairy products continued to operate – in ways that had led to the violations of Article 12 – only because the European institutions themselves had failed to meet related obligations under the Treaty. A European market organization for dairy products would, according to the Treaty, substantially take over the responsibilities of national market organizations in this area. However, the European institutions, and the Council in particular, had failed to agree on the establishment of a dairy products marketing organization by the deadline that the Council had set for itself. The Council had indeed resolved on 4 April 1962 to issue a regulation relating to the setting up of a common market organization for dairy products, under Article 43 of the Treaty, before 31 July 1962, so that the regulation might come into force by 1 November 1962 at the latest. This Council Resolution was not given effect in proper time. Thus, claimed the Luxembourg and Belgian governments, they could not be held legally responsible for failing to fulfill their Community obligations, because the EEC institutions themselves had failed to fulfill their own connected obligations. Such a position was in line with widely accepted principles of international law, which consider states to be released from their treaty obligations if their treaty partner fails to fulfill its related obligations.5 The ECJ dismissed this claim on several grounds, pointing out that the violation by Luxembourg and Belgium had begun before the relevant deadline had expired, as well as stating that the deadline established by the Council was not a binding obligation. However, the Court also dismissed the central logic of the claim put forward by the Luxembourg and Belgian governments in the following words: In [the defendants’] view . . . international law allows a party, injured by the failure of another party to perform its obligations, to withhold performance of its own . . . However, this relationship between the obligations of parties cannot be recognized under Community law. . . . The basic concept of the treaty requires that the Member States not take the law into their own hands.

5

For full discussions of the legal basis and wider significance of such reciprocity principles, and inter-state countermeasures, in international law, see e.g. E. Zoller, Peacetime Unilateral Remedies: An Analysis of Countermeasures (Transnational Publishers, Dobbs Ferry, NY 1984); L.-A. Sicilianos, Les réactions décentralisées à l’illicite: des contre-mesures á la légitime défense (Libr. générale de droit et de jurisprudence, Paris 1990); M. Noortmann, Enforcing International Law: From Self-Help to Self-Contained Regimes (Ashgate, Aldershot 2005).

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Therefore the fact that the Council failed to carry out its obligations cannot relieve the defendants from carrying out theirs.6

The Court’s judgment was framed in the broadest possible terms, setting out reasons why the “basic concept” (‘économie’) of the Treaty of Rome required the rejection of the contingent reciprocity mechanisms that are common to general international law. Commission v. Luxembourg & Belgium therefore set out a bold point of principle on permissible state behaviors within the European Economic Community.

the dairy products case in the context of community law Viewed from within the context of Community law, without reference to the dispute settlement and enforcement mechanisms employed by general international law or other treaty regimes, the ECJ’s Commission v. Luxembourg & Belgium decision appears most relevant as an example of the ECJ’s developing jurisprudence on the ‘standstill’ obligation contained in Article 12 of the Treaty of Rome, or as an example of the ECJ’s rejection of various defenses put forward by the member states attempting to justify their violation of Community law. As an example of the ECJ’s developing approach to the obligations imposed by Article 12 of the Treaty of Rome, Commission v. Luxembourg & Belgium has similarities with the Gingerbread decision,7 where the Court found that the same two Member States increased duties imposed on ‘pain d’épices’ contrary to the requirements of Article 12. It also has similarities with the ECJ’s famous Van Gend en Loos decision, where the concrete dispute concerned allegations that the Dutch customs authorities had raised customs duties contrary to Article 12.8 From this perspective, Commission v. Luxembourg & Belgium is one case among many where the ECJ took a firm and demanding line on the substantive trade obligations required by the Treaty. As an example of the ECJ’s rejection of various defenses put forward by the Member States attempting to justify their violation of Community law, Commission v. Luxembourg & Belgium has similarities with many other cases. For example, in Commission v. Italy, the Pork Products case, the ECJ rejected the claim that the principle of ‘necessity’ should allow the Italian government to adopt safeguard measures other than through the procedure provided for by

6 7 8

Cases 90&91/63, Commission v. Luxembourg & Belgium, [1964] ECR 625. Cases 2&3/62, Commission v. Luxembourg & Belgium, [1962] ECR 425. Case 26/62, Van Gend en Loos v. Nederlandse Administratie der Belastingen, [1963] ECR 1.

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Article 226 of the Treaty of Rome.9 In Commission v. France, the ECJ rejected the defense put forward by the Member State that the principle that international legal obligations might fall into ‘disuse’ could apply to provisions of the European Treaties.10 In Commission v. Italy, the Statistical Return case, the ECJ rejected the defense by the Member State that the principle of force majeure should justify a violation of Community law by the Italian government several years after damage caused by a terrorist attack.11 Finally, in Commission v. Belgium, the ECJ made clear that a Member State’s liability arose even if the failure to fulfill Community obligations derived from a constitutionally independent institution.12 From this perspective – and the case is not infrequently presented this way – Commission v. Luxembourg & Belgium is just one case among many where the ECJ rejected unwarranted defenses put forward by a Member State to allegations of violations of the Treaty of Rome.13 In analyzing the constitutional nature of the European legal order, by contrast, scholarship often gives little attention to Commission v. Luxembourg & Belgium. This judgment tends to be overlooked by celebratory studies of the ECJ’s classic cases.14 It is equally omitted by critical, even oppositional, accounts of the Court’s jurisprudence.15 This judgment sometimes goes entirely unmentioned in leading textbooks on European law, even those authored by prominent contributors to the ‘constitutionalist’ scholarship.16

9 10

11 12 13

14

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Case 7/61, Commission v. Italy, [1961] ECR 317. Case 7/71, Commission v. France, [1971] ECR 1003. France had claimed that since 1965 it had consistently expressed the opinion that provisions of the Treaty establishing the European Atomic Energy Community had lapsed, and that it was not open to the Commission to bring before the ECJ in 1971 a situation that that had lasted since 1965 and which was known about since that time. The ECJ decision stated that “it cannot be presumed that provisions of the Treaty have lapsed. The Member States agreed to establish a Treaty of unlimited duration, having permanent institutions invested with real powers . . . Powers thus conferred could not therefore be withdrawn from the Community . . . except by virtue of an express provision of the Treaty.” Case 101/84, Commission v. Italy, [1985] ECR 2629. Case 77/69, Commission v. Belgium, [1970] ECR 237. Commission v. Luxembourg & Belgium is included in the context of a discussion of a considerable number of such failed defenses in e.g. L. Prete and P. Smulders, ‘The Coming of Age of Infringement Proceedings’ (2010) 47 Common Market Law Review 9–61 and in N. Foster, EU Law Directions (3rd edn, Oxford University Press, Oxford 2012) at 180. M. P. Maduro and L. Azoulai, The Past and Future of EU law: The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Hart, London 2010). H. Rasmussen, On Law and Policy in the European Court of Justice: A Comparative Study in Judicial Policymaking (1986). The Dairy Products case is not included in, for example, D. Chalmers, G. Davies and G. Monti, European Union Law: Text and Materials (3rd edn, Cambridge University Press,

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Commission v. Luxembourg & Belgium is further neglected in social science accounts and explanations of the European legal order.17 Finally, the Dairy Products case also goes unaddressed in many leading contributions to the growing historical scholarship on the development of European law.18 Indeed, it is not at all rare to meet advanced students of European law who have never even heard of the ECJ’s 1964 Dairy Products decision. One area, however, where the greater significance of the ECJ’s Commission v. Luxembourg & Belgium decision is sometimes acknowledged relates to perhaps the most famous expression ever employed in an ECJ judgment. In its 1963 Van Gend en Loos decision, the ECJ had declared that the ‘European Economic Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only the Member States but also their nationals.’19 Despite the forceful nature of the Court’s wording, it appears that some judges on the ECJ may, subsequently, have regretted appending the words ‘of international law’ to the description of the EEC as a ‘new legal order’. Perhaps this expression appeared to encourage a lingering and unwanted affinity between the

17

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19

Cambridge 2014), P. Craig and G. de Búrca, EU Law: Text, Cases, and Materials (5th edn, Oxford University Press, Oxford 2011), or S. Weatherill, Cases and materials on EU law (11th edn, Oxford University Press, Oxford 2014). Other leading texts do include brief discussions of the 1964 Dairy Products case, usually as an example of failed defenses under the infringement procedure – see e.g. G. Bermann et al., Cases and Materials on European Union Law (3rd edn, Thomson/West, St. Paul, MN, 2011) at 393, A. Levasseur et al., The Law of the European Union (Carolina Academic Press, Durham NC, 2013) at 467, and T. Hartley, The Foundations of European Union Law: An Introduction to the Constitutional and Administrative Law of the European Union (8th edn, Oxford University Press, Oxford, 2014) at 259, 326 and 332. To mention just a few examples among prominent scholarship: e.g. A.-M. Burley [Slaughter] and W. Mattli, ‘Europe Before the Court: A Political Theory of Legal Integration’ (1993) 47 (1) International Organization 41–76; P. Pierson, ‘The Path to European Integration: A Historical Institutionalist Analysis’ (1996) 29 (2) Comparative Political Studies 123–63; K. Alter, Establishing the Supremacy of European Law: the Making of an International Rule of Law in Europe (Oxford University Press, Oxford 2001). E.g. M. Rasmussen, ‘Constructing and Deconstructing ‘Constitutional’ European Law: Some reflections on how to study the history of European Law’ in H Koch et al. (eds), Europe: The New Legal Realism: Essays in Honour of Hjalte Rasmussen (Djøf Publishing, Copenhagen 2010) 639–60; A. Boerger-De Smedt, ‘Negotiating the Foundations of European Law, 1950–57: The Legal History of the Treaties of Paris and Rome’ (2012) 21 (3) Contemporary European History 339–56; B. Davies and M. Rasmussen, ‘Towards a New History of European Law’ (2012) 21 (3) Contemporary European History 305–318; B. Davies, Resisting the European Court of Justice: West Germany’s Confrontation with European Law, 1949–1979 (Cambridge University Press, Cambridge 2012); M. Rasmussen, ‘Revolutionizing European law: A History of the Van Gend en Loos Judgment’ (2014) 12 (1) International Journal of Constitutional Law 136–63. Case 26/62, Van Gend en Loos v. Nederlandse Administratie der Belastingen, [1963] ECR 1.

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Community legal order and general international law, at a time when some judges on the ECJ may have preferred to emphasize the separation of these two legal systems? Whatever the reason, after Van Gend, the ECJ never again described the EEC as a ‘new legal order of international law’, preferring instead the terser expression ‘a new legal order’. The dropping of ‘international law’ in the ECJ’s preferred description of its new legal order appeared for the first time in Commission v. Luxembourg & Belgium, and has continued ever since.20 From the perspective of many accounts of the development of European law, therefore, the Dairy Products case appears scarcely worthy of sustained attention, except perhaps as a marker of the ECJ’s ex post ‘editing’ of Van Gend en Loos’s famous description of Community law as a ‘new legal order of international law’.

the dairy products case in the context of general international law There is, however, an alternative approach to understanding the significance of Commission v. Luxembourg & Belgium. That is to situate the importance of this case not in the narrow context of the European legal order as it has subsequently developed, but within the wider context of common forms of enforcement mechanisms for demanding treaty obligations in general international law. Now an essential and very long-standing enforcement mechanism in general international law is the threat or imposition of inter-state countermeasures, reprisals or ‘reciprocal measures’ by one state against another.21 International law scholars often refer to the decision of an arbitral tribunal 20

21

D. R. Phelan, Revolt or Revolution: The Constitutional Boundaries of the European Community (Round Hall Sweet & Maxwell, Dublin 1997) 48, 71–72. The relevant passage in the ECJ’s Dairy Products decision is as follows: ‘In fact, the treaty is not limited to creating reciprocal obligations between the different natural and legal persons to whom it is applicable, but establishes a new legal order that governs the powers, rights and obligations of the said persons, as well as the necessary procedures for taking cognizance of and penalizing any breach of it.’ See references at footnote 5 in this chapter. The way that the ECJ’s Dairy Products decision described the claim by Luxembourg and Belgium – that ‘international law allows a party, injured by the failure of another party to perform its obligations, to withhold performance of its own’ – demonstrates a contemporary understanding of the importance of such mechanisms. For a variety of historical examples of state enforcement of treaty obligations by threat or practice of retaliatory ‘self-help’, see W. Phelan, ‘What Is Sui Generis about the European Union? Costly International Cooperation in a Self-Contained Regime’ (2012) 14 International Studies Review 367–85 at 372.

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in a dispute between France and the United States in 1978: ‘If a situation arises which, in one State’s view, results in the violation of an international legal obligation, the first State is entitled . . . to affirm its rights through countermeasures.’22 Such mechanisms are particularly relevant as a last resort, after any treaty-based dispute settlement procedures have been exhausted to no avail, where a participating state fails nonetheless to change its policies to make them consistent with their treaty obligations. Those countermeasures often involve, particularly in trade-related treaty regimes, the threat or imposition of retaliatory trade restrictions by one state against imports from a treaty partner alleged to have failed to fulfill its own trade-related treaty obligations. In the global trade regime organized by the World Trade Organization (WTO), to take a contemporary example, the ability of the WTO’s Dispute Settlement Understanding, in the last resort, to authorize trade retaliation by one WTO member against another is a keystone of the system.23 The ability of treaty-based dispute settlement institutions to authorize such inter-state retaliation is in fact a common feature of many international trade regimes, even in treaty regimes whose substantive obligations or institutional arrangements otherwise demonstrate many similarities to those of the Treaty of Rome.24 The reason why state use of such ‘self-help’ countermeasures is widely considered an essential feature of international law is relatively simple: international legal obligations cannot rely on the possibility of enforcement by a state-like ‘monopoly of legitimate force’ to enforce bargains between states. International organizations, including dispute settlement institutions established by treaties, possess no coercive capacities to enforce their decisions. In the final analysis, therefore, it must be the ‘self-help’ behaviors of other states, operating on the reciprocity principles of quid pro quo and do ut des, rather than the decisions of international dispute settlement systems, that

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France v. United States, 18 RIAA 417. C. P. Bown, Self-Enforcing Trade: Developing Countries and WTO Dispute Settlement (Brookings Institution, Washington, DC 2009). C. Chase et al., Mapping of Dispute Settlement Mechanisms in Regional Trade Agreements – Innovative or Variations on a Theme 2013 (WTO Working Paper ERSD-2013-07). For example, the dispute settlement institutions of the Andean Community, otherwise in many ways similar to those of the Treaty of Rome, provide for an infringement procedure which may authorize the use of inter-state retaliation. Because of the significance of such a mechanism, descriptions of the institutions of the Andean Community as a ‘replica’ of those of the European Community may be overstated (e.g. K. Alter and L. Helfer, ‘Nature or Nurture? Judicial Law Making in the European Court of Justice and the Andean Tribunal of Justice’ (2010) 64 (4) International Organization 563–92; W. Phelan, ‘Enforcement and Escape in the Andean Community: Why the Andean Community of Nations is not a Replica of the European Union’ (2015) 53 (11) Journal of Common Market Studies 840–56.

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pressure states to fulfill their international legal obligations. In the WTO, the treaty-based dispute settlement systems may find that a WTO member has maintained measures inconsistent with its WTO obligations, but, in the end, it is up to other WTO members to impose a penalty for such behaviors through threats of punitive trade restrictions. In Commission v. Luxembourg & Belgium, therefore, the ECJ was not only elaborating on the “strict” requirements of the Treaty of Rome’s Article 12, dismissing one of what has become a considerable list of failed defenses by the Member States against claims that they have violated their Community obligations, and removing the wording ‘of international law’ from the Community’s self-description as a ‘new legal order’. In addition, the ECJ was rejecting, in sweeping fashion, what appears to be essential enforcement mechanisms in general international law and in many other trade-related treaty regimes. Such a statement of principle went far beyond what was required to dismiss the defenses of the Member States. The ECJ, it appears, took the opportunity provided by the Dairy Products litigation to establish a fundamental organizing principle of the European legal order. To be sure, other trade-related treaty regimes may attempt to subject the possibility of ‘selfhelp’ retaliation by one participating state against another to restrictions, regulations and institutional authorization.25 The Treaty of Rome, as interpreted by the ECJ in this 1964 decision, goes further by rejecting such interstate retaliation mechanisms altogether. Commission v. Luxembourg & Belgium was therefore the first of a series of decisions in which the Court denied that the Member States may use ‘selfhelp’ forms of retaliation or reciprocity as a means to enforce Community obligations. In Essevi, for example, the ECJ declared that ‘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’,26 while in Guy Blanguernon the Court stated that ‘[A]ccording to settled case law, a Member State cannot justify failure to fulfill its obligations . . . by the fact that other Member States have also failed to fulfill theirs. . . . Under the legal system laid down by the Treaty the implementation of Community law by Member States cannot be subject to a condition of reciprocity.’27 Indeed, the Court’s jurisprudence on the elimination of

25

26 27

See, for example, the ‘Understanding on Rules and Procedures Governing the Settlement of Disputes’, Annex 2 of the WTO agreement, available at www.wto.org/english/tratop_e/dispu_e/ dsu_e.htm, downloaded 13 April 2015. ECJ Cases 142&143/80 Amministrazione delle Finanze dello Stato v Essevi [1980] ECR 1413. ECJ Case C-38/89 Ministère Public v. Guy Blanguernon [1990] ECR I-83.

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any form of ‘self-help’ or inter-state retaliation by the Member States has been consistent and unswerving.28 This rejection of inter-state retaliation mechanisms, first announced in Commission v. Luxembourg & Belgium, is arguably the defining feature of Community law.29 Those scholars of the European legal order who do engage with Commission v. Luxembourg & Belgium therefore have good reason to place that judgment at the heart of the EU’s distinctiveness. Joseph Weiler pronounces the European Community’s break with inter-state countermeasures, based on Commission v. Luxembourg & Belgium, as ‘the most profound difference between the Community legal order and international law generally’.30 Lorenzo Gradoni and Attila Tanzi accurately describe the ECJ’s decision in Commission v. Luxembourg & Belgium as ‘revolutionary’.31 Vladamir Constantinesco relies on Commission v. Luxembourg & Belgium to illustrate the European legal order’s break with the ‘archaic’ features of classical international law.32 Several analyses of the European legal order in comparative context, including some of the most celebrated ones, concentrate their discussions overwhelmingly on the Dairy Products case, and the stream of related cases that followed it, even to the near-total neglect of such celebrated ECJ decisions as Van Gend en Loos and Costa v. ENEL.33 That approach, indeed, is entirely defensible.34

dairy products , van gend en loos , and costa v. enel An alternative approach, however, which this author has advanced in detail elsewhere, is to see Commission v. Luxembourg & Belgium as a decision which 28

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31 32 33

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E.g. D. Dero, La Réciprocité et le Droit des Communautés et de L’Union Européenne (Bruylant, Bruxelles 2006); L. Gradoni and A. Tanzi, ‘Diritto comunitario: una lex specialis molto speciale’ in L. S. Rossi and G. Di Federico (eds) L’incidenza del Diritto dell’Unione Europea sullo Studio del Diritto Internazionale (Editoriale Scientifica, Rome 2008) 37–70; L. Gradoni, Regime failure nel diritto internazionale (CEDAM, Padova 2008). W. Phelan, ‘What Is Sui Generis about the European Union? Costly International Cooperation in a Self-Contained Regime’ (2012) 14 International Studies Review 367–85. J. H. H. Weiler, ‘The Transformation of Europe’ (1991) 100 Yale Law Journal 2403–83 2422 ft 42. For this author’s own argument that the ECJ’s decision in the Dairy Products case could be considered worthy of a Nobel Peace Prize, see W. Phelan, ‘The European Union’s Next Nobel Peace Prize’ (2013) . Gradoni and Tanzi, ‘Diritto comunitario: una lex specialis molto speciale’. V. Constantinesco, ‘La Justice dans L’Union européenne’ (1998) 9 Philosophe Politique 99–112. B. Simma, ‘Self-Contained Regimes’ (1985) 16 Netherlands Yearbook of International Law 111–36; Gradoni and Tanzi, ‘Diritto comunitario: una lex specialis molto speciale’; Gradoni, Regime failure nel diritto internazionale. For an outstanding example of this genre, and perhaps the best introduction to the extensive scholarship on Commission v. Luxembourg & Belgium, see Gradoni, Regime failure nel diritto internazionale.

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should best be integrated with the ECJ’s nearly contemporaneous decisions in Van Gend and Costa.35 That is to say, the European legal order was able to break with the use of inter-state countermeasures (as provided for in Commission v. Luxembourg & Belgium) precisely because national courts took on the role of enforcing European law rights at the suit of private parties (as required by Van Gend en Loos) and because conflicts between European law and national law were to be resolved in favor of European law (as required by Costa v. ENEL). On this logic, the Dairy Products case is not only the ECJ decision that marks the European legal order’s break with the enforcement mechanisms of general international law, but at the same time, the ECJ decision that reveals much of the meaning of Van Gend and Costa, by demonstrating the contribution of those cases to the removal of inter-state retaliation mechanisms between the Member States. Such an approach finds considerable support from comparative analysis of dispute settlement mechanisms in other treaty regimes.36 Not least, the extensive debate over the possibility of ‘direct effect’ within the EU for decisions resulting from the dispute settlement institutions of the WTO demonstrates the straightforward connection between automatic ‘domestic court’ enforcement of treaty obligations and attempts to address problems caused by the use of inter-state countermeasures in international trade regimes. Similarly, the possibility of domestic court enforcement of certain NAFTA obligations within the Canadian legal order was provided for explicitly in order to remove the possibility of enforcement through the use of inter-state retaliation mechanisms. There is also some evidence that a leading judge on the ECJ understood this logical connection between Van Gend en Loos, Costa, and the Dairy Products case back in the early 1960s when the ECJ was making these remarkable decisions. In a little-known publication in 1965, ECJ judge Robert Lecourt candidly explained that the Community legal order needed the doctrine of direct effect, as required by Van Gend, and the doctrine of

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W. Phelan, ‘The Troika: The Interlocking Roles of Commission v. Luxembourg and Belgium, Van Gend en Loos and Costa v. ENEL in the Creation of the European Legal Order’ (2015) 21 (1) European Law Journal 116–35. At more length, see W. Phelan, In Place of Inter-State Retaliation: The European Union’s Rejection of WTO-Style Trade Sanctions and Trade Remedies (Oxford University Press, Oxford 2015). See W. Phelan, ‘The Troika: The Interlocking Roles of Commission v. Luxembourg and Belgium, Van Gend en Loos and Costa v. ENEL in the Creation of the European Legal Order’ (2015) 21 (1) European Law Journal 116–35 for a detailed discussion of debates about the possible enforcement roles of domestic courts in the context of the WTO and the NAFTA Side Agreements.

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supremacy, as required by Costa, because the Member States had ‘renounced the ability to take self-help actions to enforce their treaty rights’, in the ‘decision of 13th November 1964,’ or, in other words, in the Dairy Products case.37 It is not, therefore, merely subsequent analysis, but the contemporary description of an ECJ judge intimately involved in the Court’s legal ‘revolution’ that places Commission v. Luxembourg & Belgium as a companion case to Van Gend and Costa.38 The Dairy Products case thus stands at the center of the creation and development of the European legal order.

conclusion: hello and goodbye Many discussions of the development of European law take the EU’s break with inter-state countermeasures for granted. From an international law perspective, however, the EU’s comprehensive break with such inter-state countermeasures remains astonishing. It is from the perspective of enforcement mechanisms employed by other trade-related treaty regimes that the full significance of the ECJ’s decision on 13 November 1964 is revealed. Far from being a trivial decision about the meaning of Article 12, or merely one of many ECJ judgments where the Court rejected defenses advanced by the Member States in the context of the infringement proceedings, Commission v. Luxembourg & Belgium is, in fact, the only ECJ decision which can look Van Gend en Loos in the eye as an international legal judgment of world historical significance. In Van Gend en Loos, the ECJ gave its initial welcome to the principle that national courts and private parties within 37

38

R. Lecourt, ‘La Dynamique Judiciaire dans l’Édification de l’Europe’ (1965) 64 (April–May) France Forum 20–22. For a comment on Judge Lecourt’s role, see W. Phelan, ‘Supremacy, Direct Effect, and Dairy Products in the Early History of European law’ (forthcoming) International Journal of Constitutional Law. See also R. Lecourt, ‘Quel eut été le droit des Communautés sans les arrêts de 1963 et 1964?’ in Mélanges Jean Boulouis: l’Europe et le droit (Dalloz, 1991) 349–61, where, writing in retirement, Lecourt emphasized that the infringement procedure set out in Article 169 of the Treaty of Rome would not have prevented defaulting Member States from continuing to enjoy all the advantages of the Treaty. Without the direct effect and supremacy of Community law, as provided for by the ECJ in Van Gend and Costa, therefore, the principle that the Member States could not justify their own irregularities by the failures of other Member States would have been put at risk. For the essential personal role of Lecourt in the ECJ’s ‘revolution’ in 1963 and 1964, see e.g. Rasmussen, ‘Revolutionizing European law: A history of the Van Gend en Loos judgment’, esp. 153. See also the 2003 interview with former ECJ judge Pierre Pescatore, available at: www.cvce.eu/obj/interview_with_pierre_pescatore_the_early_judgments_of_the_court_of_ justice_1962_1966-en-1238d611-2883-43fa-921f-ac5861229ffa.html

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the member states would enforce European treaty obligations. In Commission v. Luxembourg & Belgium, the ECJ signaled its decisive farewell to the enforcement of European treaty obligations by the ‘self-help’, retaliatory methods of general international law. Between them, these two decisions represent all that European law was to become, and all that it would leave behind.

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8 Acts of Creation The ERTA Decision as a Foundation Stone of the EU Legal System

anne mcnaughton

introduction How is the ERTA1 decision an ‘act of creation’ of the European Court of Justice? The facts giving rise to the decision are unprepossessing.2 Yet, this decision established the doctrine of implied powers that was the starting point for delineating the areas of competence of the Member States and the institutions of the EU internally,3 and even more importantly the creation of a new test to establish the EU’s exclusive external competence.4 The mainstream narrative of the ERTA decision concerns its role in the development of the EU’s external relations, and it is this narrative that features in the textbooks and scholarly writing concerned with this

1

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Case 22/70 Commission v. Council (ERTA) [1971] ECR 263. The name ‘ERTA’ comes from the English acronym of the short title of the agreement that was the subject of the dispute, the European Road Transport Agreement (see n. 7 to this chapter and accompanying text). The agreement, and the principle of EU law derived from this case, is also referred to as AETR and the AETR Principle. This is the acronym from the French title of the agreement: Accord Européen sur les Transports .Routiers. Robert Post goes so far as to describe them as ‘technical and dull’ in Constructing the European Polity: ERTA and the Open Skies Judgments, chapter 4 in Miguel Maduro and Loic Azoulai, The Past and Future of EU Law: the Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty, Hart Publishing, Oxford, 2010. On the contested nature of this ultimate acceptance, see Rasmussen, ‘Rewriting the History of European Public Law’ (2013) 28 American University International Law Review 1187 at 1219. Today the ERTA principle has been codified in two treaty provisions, art. 3 (2) TFEU ‘The Union shall also have exclusive competence for the conclusion of an international agreement when its conclusion is provided for in a legislative act of the Union or is necessary to enable the Union to exercise its internal competence, or in so far as its conclusion may affect common rules or alter their scope [ERTA-type exclusivity].’ The principle can also be seen in art. 216(1), see n. 81 to this chapter.

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decision.5 However, it tells only half the “ERTA” story: it neglects the historical circumstances and the institutional struggles that gave rise to the dispute itself. Those circumstances are at least as important as the external relations aspect of the judgment for understanding that the new legal order of international law created by the Member States and identified by the Court was not a necessary outcome, but rather a legal and political compromise carried out by political and legal elites. This chapter examines those circumstances in detail, exploring the internal significance and the motivations of those jurists and politicians committed to the creation of the new legal order. The ERTA decision performed the same task for the EU’s external relations that Costa did internally: where the EU had competence, ERTA established the supremacy of EU law over Member States’ law externally, in the same way that Costa established the supremacy of EU law over national law within the EU. The decision also clarified the roles of the institutions and of the Member States in relation to each other. For these reasons, this decision is the third foundation stone of the ‘new legal order of international law’ referred to by the ECJ in its Van Gend en Loos decision.6

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6

See, e.g., Paul Craig and Grainne de Burca, EU Law: Text, Cases and Materials, (5th edn), Oxford University Press, Oxford, 2011, 308; Damien Chalmers et al, European Union Law, (2nd edn) Cambridge University Press, Cambridge, 2010, 640 Piet Eeckhout, EU External Relations Law, (2nd edn), Oxford University Press, Oxford, 2012, chapter 4; Kieran St Clair Bradley, ‘Powers and Procedures in the EU Constitution: legal Bases and the Court’ chapter 4 in Paul Craig and Grainne de Burca (eds), Evolution of EU Law (2nd edn), Oxford University Press, Oxford, 2011, 89 (‘Evolution’); Marise Cremona, ‘External Relations and External Competence of the European Union: the emergence of an integrated policy’ chapter 9 in Craig and de Burca, Evolution; J. H. H. Weiler, ‘The External Legal Relations of Non-Unitary Actors’, chapter 4 in J. H. H. Weiler, The Constitution of Europe, Cambridge University Press, Cambridge, 2002 (Constitution of Europe); J. H. H. Weiler, ‘Transformation of Europe’ (1991) 100 Yale Law Journal 2403, 2415; Francis Jacobs, ‘Direct effect and the interpretation of international agreements in the recent case law of the European Court of Justice’ chapter 1 in Alan Dashwood and Marc Maresceau, (eds), Law and Practice of EU External Relations, Cambridge University Press, Cambridge, 2008, (Dashwood and Maresceau) 13; Marise Cremona, ‘Defining competence in EU external relations: lessons from the Treaty reform process’ chapter 2 in Dashwood and Maresceau; Alan Dashwood and Joni Heliskoski, ‘The Classic Authorities Revisited’ chapter 1 in Alan Dashwood and Christophe Hillion, The General Law of EC External Relations, Sweet and Maxwell, London, 2000; John Usher, European Community Law and National Law: The Irreversible Transfer? George Allen & Unwin, London, 1981, 63. C-26/62 Van Gend en Loos v Administratie der Belastingen [1963] ECR 1 (hereinafter Van Gend).

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the context of the erta dispute The Historical Context In 1962, a number of European states, including most of the original Member States of the EEC, negotiated and signed an international agreement concerning the work of crews of vehicles engaged in international road transport.7 This agreement, the European Agreement Concerning the Work of Crews of Vehicles Engaged in International Road Transport (AETR) never entered into force for want of sufficient ratifications. It had been the latest in a number of agreements that governments had sought to negotiate on this subject. In 1939, the International Transport Bureau had proposed a convention on this subject, but it never entered into force.8 A further agreement, the General Agreement on Economic Regulations for International Road Transport, was concluded on 17 March 1954.9 However, it also failed to obtain sufficient ratifications, and similarly never entered into force. The United National Economic Commission for Europe addressed the problem, resulting in the 1962 European Road Transport Agreement (ERTA) already mentioned.10 Apart from the disruption of the Second World War, different standards and regulatory structures across negotiating states made it difficult to successfully give effect to these instruments. Different national standards and criteria in the road transport sector constituted what would now be termed ‘non-tariff measures’ such as divergent national measures that give rise to regulatory friction and consequently slow transnational trade. Reconciling such differing standards in the context of work hours for road crews proved challenging as these failed treaties show. There were numerous definitions of ‘hours of work’, among other things, due in part to the fact that attention had to be paid not only to the ‘social protection of the personnel’ in the road transport industry

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European Agreement Concerning the Work of Crews of Vehicles Engaged in International Road Transport (AETR) Done in Geneva, 19 January 1962. UNTC Doc. E/ECE/457-E/ECE/ TRANS/527, https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XI-B18&chapter=11&lang=en. The eight signatories to this original AETR were: Belgium, France, Germany, Luxembourg, Netherlands, Poland, Sweden and the United Kingdom of Great Britain and Northern Ireland. See Case 22/70 Commission v Council (ERTA) [1971] ECR 263 Opinion of Advocate General Lamothe at 285. UNTC Doc. E/ECE/186 (E/ECE/TRANS/460), 22 March 1954, https://treaties.un.org/Pages/ ViewDetails.aspx?src=TREATY&mtdsg_no=XI-B-8&chapter=11&lang=em. See also discussion in Sigfrido Perez, ‘The Legal Service of the European Commission,’ conference paper presented at Conference: Towards a New History of Europe, 8–10 December 2015, European University Institute, Florence, Italy, 30.

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but also ‘to the requirements of road safety as well as to the economic and commercial aspects of the running of the undertakings’.11 In 1967, negotiations for the revision of the ERTA were resumed first under the European Conference of Ministers of Transport in Paris and then under the auspices of the Economic Commission for Europe.12 In 1969, the Community adopted a regulation, Regulation No. 543/69, on the harmonization of certain social legislation relating to road transport.13 This regulation dealt with the same subject matter as that of the ERTA, but not in the same terms, and in 1970, the Council requested the Commission amend the terms of the Regulation so it would conform to the obligations in the ERTA. Although the European Commission had been aware of the Member States negotiating the revisions of this agreement, it made no representations to the Council (formal or otherwise) to insist that the Commission alone had the mandate for negotiating international agreements with third countries. It merely asked the Council to be kept informed of proceedings. As Advocate General Lamothe observed, the Council apparently ‘turned a deaf ear’ to this request.14 At the time of the ERTA dispute, the EEC had been in existence for little more than a decade. The ERTA proceedings were the first in the Court’s history in which the ECJ was asked to adjudicate on the demarcation of powers and competencies of the Commission and the Council. This point is central to the interpretation the Court adopted and to the significance of the decision as a foundation stone of this new legal order.

The ERTA Dispute before the Court The Commission brought an action against the Council to annul ‘the proceedings’ of the Council’s meeting of 20 March 1970 relating to the negotiation and conclusion by the Member States of the European Road Transport Agreement on the work of crews of vehicles engaged in international road transport (ERTA). In those proceedings, the Council had facilitated an agreed position among the Member States regarding the negotiation and conclusion of the ERTA. The key point is that the Member States, not the Council, had arrived at an ‘agreed position’ on the negotiation and conclusion of the ERTA. 11

12 14

International Labour Office, Hours of Work and Rest Periods in Road Transport, Report VII (1), International Labour Conference, 64th Session, 1978, 8. See also the discussion in Perez, ‘History of Legal Services Commission’, paper presented at New Legal History Conference, Florence, 9–11 December 2015, at 35. 13 Case 22/70 Commission v. Council (ERTA) [1971] ECR 263 at 266. [1969] OJ L77 49. Opinion of Advocate General Lamothe, ERTA [1971] ECR 263 at 284.

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The Council resisted the action, arguing that it was inadmissible, or if admissible, then unfounded.15 There were two questions for the Court to determine: first, whether or not ‘the proceedings’16 was a reviewable measure under the EEC Treaty; and second, if it were such a measure, whether or not it was invalid. The Court has always had jurisdiction for administrative review of the validity of measures of EU law. At the time, the relevant treaty provision was art. 173 EECT and the Commission brought its action under that provision.17 As noted, the Council resisted, arguing that ‘the proceedings’ was not a reviewable measure within the meaning of art. 173. The Council sought to argue that only measures defined in the treaty, i.e., regulations, directives and decisions, were reviewable by the Court under art. 173. Since ‘the proceedings’ being challenged by the Commission were none of these measures, the action, according to the Council, was inadmissible. It is true that ‘the proceedings’ challenged by the Commission did not constitute an act within the meaning of art. 173 EECT if it were interpreted narrowly. However, how widely or narrowly art. 173 was to be interpreted was itself a matter for the Court. The Court’s jurisdiction includes interpreting the Treaty, and that, in turn, included interpreting art. 173. In considering the Council’s argument, the Court reformulated the issue. The question was not whether or not ‘the proceedings’ being challenged by the Commission could be considered to be a regulation, directive or decision, as defined in the Treaty. Rather, the issue was whether or not those proceedings were binding on the parties. The Court reasoned that, if non-binding measures were excluded from administrative review (regardless of their form), it stood to reason that all binding measures (regardless of form) were not so excluded.18 The Court adopted a ‘contextual approach’19 to interpreting art. 173, observing that the objective of administrative review ‘is to ensure, as required by

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The Council also argued that the application was out of time (see ERTA, [33], [65]). This argument was summarily dismissed by the Court (see ERTA, [66]) and by Advocate General Lamothe (see Opinion, 286). Referring to the proceedings of the Council meeting of 20 March 1970. EEC Treaty art. 173 (now art. 263 TFEU): ‘The Court of Justice shall review the legality of acts of the Council and the Commission other than recommendations or opinions. It shall for this purpose have jurisdiction in action brought by a Member State, the Council or the Commission on grounds of lack of competence, infringement of an essential procedural requirement, infringement of this Treaty or of any rule of law relating to its application, or misuse of powers.’ This aspect of the Court’s jurisdiction remains unchanged in Art. 263 TFEU. ERTA, [39]. The contextual approach is one of the methods of interpretation used by the CJEU. It ‘involves placing the provision in issue within its context and interpreting it in relation to other

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art. 164, observance of the law in the interpretation and application of the Treaty’.20 Whether or not the measure under challenge was one susceptible to review depended on whether or not it was a decision of the Council or of the Member States acting distinctly and independently of the EEC institutions. If the latter, then regardless of form, it was not a measure of Community law, reviewable by the Court. In order to address the preliminary issue of admissibility, therefore, the Court held that it was first necessary to determine which authority was empowered as of 20 March 1970 to negotiate and conclude the ERTA.21 If, at that date, the Member States were so empowered, then the Commission’s action was inadmissible because ‘the proceedings’ did not constitute the exercise of powers conferred on the Community, but merely an acknowledgement of the coordination by the Member States ‘of the exercise of powers which remained vested in them’.22 To answer this question in turn, it was necessary for the Court to consider whether competence to negotiate and conclude the ERTA was vested in the Member States or had transferred to the Community institutions by 20 March 1970. The Court interpreted art. 173 in such a way that it was not restricted to only reviewing regulations, directives, and decisions, but could also review any measure intended to be binding on the Member States regardless of form.23

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provisions of Community law’: L. Neville Brown and Tom Kennedy, The Court of Justice of the European Communities (5th edn) Sweet and Maxwell, London 2000, 334. It is an approach distinct from the ‘teleological’ approach to interpretation for which the Court is best known. The Court described the contextual method of interpretation in C- 283/81 Srl CILFIT v Italian Ministry of Health [1982] ECR 3415 at para. 20: ‘. . . every provision of Community law must be placed in its context and interpreted in the light of the provisions of Community law as a whole, regard being had to the objectives thereof and to its state of evolution at the date on which the provision in question is to be applied.’ See also Anthony Arnull, The European Union and its Court of Justice (2nd edn) Oxford University Press, Oxford, 2006, 608. ERTA, [40]. EEC Treaty art. 164 (now art. 19(1) TEU) provided: ‘The Court of Justice shall ensure that in the interpretation and application of this Treaty the law is observed.’ 22 ERTA, [3]. ERTA, [4]. Given the ECJ has the competence to determine the scope and extent of its own competence (‘kompetenz-kompetenz), this was, perhaps, hardly surprising; nor was this the first time it had adopted this approach, although in previous cases the Court was considering whether a ‘decision’ of the Commission in the area of competition law infringement constituted a reviewable act. See, e.g., competition decisions joined cases C 8 – 11/66 Société anonyme Cimenteries C.B.R. Cementsbedrijven N.V. and others v Commission of the European Economic Community [1967] ECR 75 (the ‘Noordwijks Cement Accord’ joined cases). This aspect of the ERTA decision – that sui generis measures are also reviewable by the ECJ – was part of the mainstream narrative concerning the judgment (see, e.g., T. C. Hartley, The Foundations of European Community Law (7th edn), Oxford University Press, Oxford, 2010, 106; Paul Craig and Grainne de Burca, EU Law: Text, Cases and Materials (5th edn), Oxford University Press, Oxford, 2011, 308; Damien Chalmers et al., European Union Law (2nd edn), Cambridge University Press, Cambridge, 2010, 399.) It was codified by the Maastricht Treaty

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The recent work of historians Vera Fritz (on the life of Pierre Pescatore)24 and Perez (on the history of the Commission’s Legal Service)25 supports the argument that the EEC (EU) was regarded (although not by all) as a new, distinct and unique legal system. From Fritz we learn that, from 1946 to 1952, Pescatore was particularly active as secretary of Luxembourg’s delegation to the United Nations.26 These experiences were decisive for him, shaping significantly his views on the efficiency of international treaties and convincing him ‘of the limits of purely intergovernmental organizations’.27 Pescatore was the juge rapporteur in the ERTA case. After the decision, he wrote a ‘corrective’ letter to Antonio Tizzano, at the time a young law professor and now vice-president of the Court,28 noting: The controversies surrounding this judgment are signs that not everybody has yet integrated the ways of thinking of this ‘new legal order,’ which is quite profoundly distinct from the classic international law. Coming myself to this, following a long practice of international relations, I am perfectly aware of the depth of the conversion which is needed.29

Pescatore has been described as ‘the most influential jurist the Court can boast’.30 He was juge rapporteur in 272 cases during his eighteen years at the Court.31 Apart from ERTA, he was rapporteur on numerous other significant decisions including Internationale Handelsgesellschaft32 (concerning fundamental rights),

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amendments which replaced the original art. 173 with an expanded treaty provision, now art. 263(1) TFEU: ‘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 . . . intended to produce legal effects vis-à-vis third parties’ (emphasis added). Vera Fritz, ‘Pierre Pescatore: an activist of European integration through law (1919–2010),’ paper presented at Conference: Towards a New History of Europe, 8–10 December, 2015, European University Institute, Florence, Italy, 26 27 See n. 10 to this chapter. See n. 24 to this chapter, 2. Ibid. Judge Antonio Tizzano was Professor of European Law at the University of Rome, La Sapienza and Advocate General from October 2000 at the Court. He became a judge there in 2006, and was appointed vice-president in October 2015; he currently serves as vice-president. On the Italian elites at the Court, see the chapter by Fernanda Nicola and Evelyne Tichadou, Oceano Groupo: Océano Grupo: Missed Opportunities and a Second Life for EU Consumer Law. Perez, above n. 10, 44. The translation is Perez’s from the original: ‘Les remous suscités de quelques côtés par cet arrêt font apparaître que tout le monde n’est pas encore acccordé aux façons de penser de cet ‘order juridique nouveau’ qui se distinguee assez profondément du droit international classique. Etant venu moi-même à ces choses à la suite d’une pratique prolongée des relations internationals, je mesure toute l’ampleur de la conversion qui est necessaire.’ Letter, Pierre Pescatore to Antonio Tizzano, 5 November 1971, p. 3: ERTA Court file, BAC 371/1991, 0348. 31 Fritz, n. 24 to this chapter, 10. Ibid. C11/70 Internationale Handelsgesellschaft mbH v Einfuhr- und Vorratstelle für Getreide und Futtermittel [1970] ECR 1125;

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Simmenthal33 (concerning the primacy of Community law) and many others.34 The juge rapporteur is a ‘key figure in the process of deliberation’.35 S/he is responsible for shepherding a case ‘through all the Court’s procedure’36 and for preparing ‘a draft judgment indicating how the case should, in his or her view, be handled’.37 Any judge who disagrees with the view proposed by the rapporteur circulates, in turn, a note setting out his or her own view,38 and discussion proceeds among the judges until the judgment is finalised. The delibéré of the judges is secret, so it is impossible to determine the extent to which Pescatore influenced the outcome of the ERTA dispute (or any other cases for which he was rapporteur).39 However, of all the cases identified as ‘most important’, Pescatore was rapporteur in more than 40 per cent of those cases decided between 1968 and 1985 (almost the entirety of his tenure at the Court).40 It is reasonable to conclude that his views held some sway among his fellow judges. The work on the history of the Legal Service of the European Commission and its officers is equally important for understanding the context of the ERTA dispute. The work of Morten Rasmussen,41 Anne Boerger42 and Perez,43 for example, makes a valuable contribution to the literature in this respect. Together with the earlier work of Eric Stein,44an influential professor of EU law, it provides a far more nuanced understanding of the interplay of influence across European institutions. Michel Gaudet, for example, was director of the Legal Service from 1952 to 196945 and promoted a ‘quasi-federal approach’ to European law and the teleological approach adopted by the Court for the interpretation of the Treaties in the famous Van Gend decision.46 He was succeeded by Walter Much, who was supported by Gerard Olivier as Deputy Director General of the Legal Service.47 Olivier was the officer in the Legal Service with carriage of the ERTA dispute who continued

33 34 35

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C 106/77 Amministrazione delle Finanze dello Stato v Simmenthal SpA [1978] ECR 629. See further, Fritz, n. 24 to this chapter, 10. Anthony Arnull, The European Union and its Court of Justice (2nd edn,) Oxford University Press, Oxford, 2006, 9. 37 38 39 40 Ibid. Ibid. Ibid. Fritz, n. 24 to this chapter, 10. Ibid. Morten Rasmussen, ‘Establishing a Constitutional Practice of European Law: The History of the Legal Service of the European Executive, 1952–1965 (2012) 21(3) Contemporary European History, 375–97. Anne Boerger and Morten Rassmussen, ‘Building European Law. The Life and Role of Michel Gaudet’ Paper presented at European Union Studies Association, Baltimore, MD, 2013. Perez, above, n. 10. E.g., Eric Stein, ‘Lawyers, Judges, and the Making of a Transnational Constitution’ (1981) 75 American Journal of International Law 1–27. 46 47 Boerger, n. 42 to this chapter, 1. Ibid. Perez, n. 10 to this chapter, 35.

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the legacy of Gaudet. The decision to proceed against the Council was not one taken on his recommendation, however. Rather, it was the result of a personal decision by President of the Commission Jean Rey.48 The latter also subscribed to a view of Community law that was distinct from traditional international law. Writing in 1961, Rey commented on ‘the real birth of a community law which is going, progressively, to influence national law’.49 Behind the scenes, protagonists such as Rey (as president of the Commission), Gaudet (as director of the Legal Service setting its early agenda) and Pescatore (in the role of juge rapporteur) were all significant in the ERTA dispute coming before the Court and in its resolution. At this early stage in the Community’s history, the Member States were having some difficulty recognizing and accepting the Community institutions as ‘other’ – a part of a separate legal order. However, the Court had two fronts on which the clear delineation of the separate institutional structure of this new legal order of international law was necessary. Internally, it was necessary to send a message to the Member States that the Council was not their plaything, but a separate institution imbued by them with ‘limited sovereignty’ as part of this new legal order. Externally, however, the Court must also have had similar concerns. As noted earlier, the ERTA negotiations had been carried out under the auspices of the UN Economic Commission for Europe (ECE). The ECJ must surely have been concerned to demarcate clearly between the UN and its agencies and the EEC. In particular, the Court surely would have been keen to guard against the possibility of the EEC and Community Law being subordinated to the UN and its legal regime. The doctrine of implied powers dealt neatly with this potential risk as well.

Advocate General Lamothe’s Opinion In his opinion, Advocate General Dutheillet de Lamothe set out the background to the dispute and addressed the issues raised by the parties. Three matters in his opinion are significant: first, as early as 1968, the Commission had expressed reservations about the manner in which the ERTA negotiations were proceeding.50 However, the Commission never claimed the right ‘to take sole charge of those negotiations in the name of the Community’, something 48 49

50

Ibid. Ibid., Perez’s translation of the quote from Rey, ‘Les jurists et le Marché Commun’ (1961) Journal des Tribunaux. Opinion of Advocate General Lamothe, ERTA [1971] ECR 263 at 285.

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AG Lamothe considered important.51 Second, the Commission consistently pressed its case to be closely involved in those negotiations, including through having its own experts attend the negotiations in Geneva alongside those from the Member States, but the Council apparently ignored this.52 By the time of the Council meeting of 20 March 1970,53 the divergence in the attitude of the two institutions had ‘intensified considerably’.54 Third, AG Lamothe extracted a section of the minutes of the Council meeting of 20 March 1970 in his opinion. The extract recorded a request from the Council to the Commission, asking the latter to amend the provisions of a Community Regulation dealing with the same subject matter as the ERTA, so that Community law would comply with the ERTA.55 These three matters are significant for a complete understanding of the ERTA decision. AG Lamothe’s reasoning on the interpretation of art. 173 EECT (TFEU: art. 263)56 is consistent with the Court’s reasoning on this point. In relation to the issue of competence, however, the Advocate General is more cautious. In his view, in order to vest the Community institutions with authority to negotiate and conclude agreements with third countries in relation to transport, it would be necessary to do one of two things: either to declare applicable to the ERTA matter those Treaty provisions granting such authority in relation to matters other than transport, or to interpret certain provisions of the general Treaty as also applying to transport.57 AG Lamothe considered that both these solutions would require the Court to engage in ‘a discretionary construction of the law . . . a judicial interpretation far exceeding the bounds which the Court [had] hitherto set regarding its power to interpret the Treaty.’58 He set out his reasons in detail, they are well worth reading and reflecting upon, as they give valuable insight into the challenges of interpretation facing the Court in this matter. AG Lamothe began by examining whether or not authority for the Community institutions to negotiate international agreements might be sourced from express provisions in the Treaty that deal with matters other than transport.59 He concluded that the authors of the Treaty did not intend this.60

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Ibid.; towards the end of his analysis on p. 295, he offers a possible explanation for this. 53 Ibid. The meeting that gave rise to ‘the proceedings’ at the centre of the ERTA dispute. Opinion of Advocate General Lamothe, ERTA [1971] ECR 263 at 285. Regulation No. 543/69, dealing with the harmonisation of certain social legislation relating to transport either wholly or partly within the EU. See n. 17 to this chapter. 58 Opinion of Advocate General Lamothe, ERTA [1971] ECR 263 at 289. Ibid. Ibid. Id., 290: ‘It is certain that the authors of the Treaty did not consider that such provisions were sufficient to provide a basis for a Community authority in external affairs, since it considered it

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He then examined whether or not authority to conclude international agreements might have been vested in the Community institutions as a result of the adoption of Regulation No. 543/69. He found this interpretation of Community law more persuasive,61 but ultimately (and apparently reluctantly) advised the Court against adopting this view. In his concluding comments, however, he seemed almost to invite the Court to adopt the approach that it ultimately took in identifying the implied treaty making powers in the Treaty.62 He identified the problems he considered the Court would face if it took this approach: first, if the Court were to hold that art. 11663 applied to the negotiation and conclusion of the ERTA, in his view, the Court would also need to rule that the contested proceedings did not infringe upon that article. He considered that this ought also to be the outcome if the Court considered that Regulation No. 543/69 vested in the Community institutions the competence to negotiate and conclude agreements relating to transport with third countries under the conditions laid down in art. 228.64 These matters will be discussed in more detail later in the chapter. The Advocate General’s Opinion is always a valuable resource for understanding the relevant law and issues in any dispute before the Court. In the ERTA case, however, it is essential reading. It is from the Opinion that one sees clearly the risks to the survival of this ‘new legal order of international law’ being posed by the manner in which the Member States were engaging with both the Commission and the Council. Advocate General Lamothe

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necessary, in order to confer that authority, to write into the Treaty six articles specifically devoted to this point.’ ERTA, Opinion, 291. Id., 294: ‘Nevertheless, the Court may perhaps consider that a more audacious method of interpretation . . . could perhaps be adopted.’ I acknowledge and thank Marise Cremona for speaking with me about this and for reinforcing this point. EEC Treaty art. 116: ‘From the end of the transitional period onwards, Member States shall, in respect of all matters of particular interest to the common market, proceed within the framework of international organizations of an economic character only by common action. To this end, the Commission shall submit to the Council, which shall act by a qualified majority, proposals concerning the scope and implementation of such common action. During the transitional period, Member States shall consult each other for the purpose of concerting the action they take and adopting as far as possible a uniform attitude.’ (Article 116 was repealed by the Maastricht Treaty). EEC Treaty art. 228 (now art. 216(1) TFEU: Where this Treaty provides for the conclusion of agreements between the Community and one or more States or an international organization, such agreements shall be negotiated by the Commission. Subject to the powers vested in the Commission in this field, such agreements shall be concluded by the Council, after consulting the European Parliament where required by this Treaty. See n. 81 to this chapter for text of the article in its present form.

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comments specifically on the practice adopted by the Council in carrying out its duties.65 He also addresses the danger this practice represents for this ‘new legal order of international law’. It is this practice that the Court is, in fact, addressing when developing the doctrine of implied powers and granting exclusive competence to the EU institutions. The practice was for the ministers of the Member States to use the Council as a framework within which they worked together ‘to settle the principle and means of achieving their common plans’.66 They treated the Council as an organ of the Community established between the six Member States but also as an organ of the collective formed by those states.67 This practice had the advantage of convenience. It facilitated a greater cooperation that was beneficial overall to the European project. Reading the part of his Opinion that deals with disadvantages, however, sets alarm bells ringing: it demonstrates clearly that the Member States treated the Council as a convenient secretariat for the coordination of the Member States’ individual positions, rather than an institution in its own right. The Commission may have been defending its position in the institutional structure by bringing the action against the Council, but the Council itself was in danger of being relegated to a purely administrative role, at least where the negotiation and conclusion of international agreements was concerned. A clear, formal distinction was almost always lacking between acts of the Council as a Community body and its proceedings as the unifying agency of the Member States.68 The legal departments sought to differentiate these acts by using the terminology of Community law for instruments of the Council (regulations, directives, decisions) and using different names for acts concluded collectively (‘declaration of intent’, protocol, agreement).69 However, there were many cases where the two were completely confused.70 More serious was the real concern that Member States were hiding behind this terminological confusion to deliberately disregard the powers and procedures prescribed by the Treaty.71

65 67 71

66 Opinion of Advocate General Lamothe, ERTA [1971] ECR 263 at 287–88. Ibid. 68 69 70 Ibid. Id., 288. Ibid. Ibid. Opinion of Advocate General Lamothe, ERTA [1971] ECR 263 at 288. Lamothe added: ‘In fact one may wonder whether sometimes the Council of Ministers does not adopt measures under conditions and in accordance with procedures other than those provided for by the Treaty, which it should have taken as a Community body, that is to say, principally, having regard to the powers of the Commission, the Parliament or the Economic and Social Committee. It has sometimes been asserted in the Parliament that this is so. In any event it is an issue which the Court should consider each time proceedings of the Council are disputed before it.’

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The Court’s Reasoning Having explained the need to deal with the issues in reverse order, the Court proceeded to test the validity of this sui generis binding measure of the Council.72 The decision of the Court is a finely balanced one. In effect, it held on the one hand that, as a matter of Community law, the Commission – not the Member States – had the authority to negotiate the ERTA.73 On the other hand, the Court held that the Commission had, in effect, agreed to the position taken by the Council;74 that the Member States had acted consistently with their ‘loyalty obligation’ under art. 5 EECT,75 and that it would create uncertainty and difficulty for the third-country parties to the ERTA if the Court were to declare void the Council’s proceedings.76 The Court reasoned that most of the substantive negotiations had already taken place in relation to the original agreement, at a time when there was no common action at the Community level.77 It would therefore be unreasonable, according to the Court, to create such difficulties for the nonMember States to the agreement at such a late stage, if the Court were to find that the Community institutions had not negotiated the agreement correctly. It was noted78 that there had been some scope under the Treaty for the Commission to act by making proposals under arts. 75(1)79 and 116(1)80 and by

72 73 75

76 79 80

Described by the Court as a measure ‘of a special nature’: ERTA, [98]. 74 This is the effect of the Court’s ruling in [16]–[19] and [85]. ERTA, [86]. ‘Member States shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community. They shall facilitate the achievement of the objectives of this Treaty. They shall abstain from any measure which could jeopardize the attainment of the objectives of this Treaty.’ This provision remains essentially the same and is now set out in art. 4 (3) TEU: Pursuant to the principle of sincere cooperation, the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties. The Member States shall take any appropriate measure, general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the Union. The Member States shall facilitate the achievement of the Union’s tasks and refrain from any measure which could jeopardise the attainment of the Union’s objectives. 77 78 ERTA [86]. ERTA, [84]. At [88] and [89]. Now art. 91 TFEU (concerning implementation of a common road transport policy). Paragraph 1 of which required Member States, from the end of the transitional period onwards, to proceed within the framework of international organisations of an economic character only by common action, the implementation of such common action being within the powers of the Council, basing its decisions on proposals submitted by the Commission. Art.116 was repealed by the Treaty on European Union [1992] OJ C 191, 1 (hereafter the ‘Maastricht Treaty’).

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seeking the application of its implied powers under Art. 228(1) EECT.81 However, the Commission did not take action under any of these provisions, suggesting that it had acquiesced in the Council’s chosen course of action.82 The net effect of the decision was to establish the principle of implied powers (see discussion that follows) and in so doing to extend the scope of the EU institutions’ external powers while simultaneously leaving the conclusion of the ERTA undisturbed. What we can infer from the material in both the judgment and the Advocate General’s opinion is that the Court was determined to send a clear message to the Member States that the Council was not merely a conduit through which they continued to exercise unlimited sovereignty. Rather, the Council was an institution of the EEC and the EEC Treaty delineated the scope of its competence, as well as the scope of the Commission’s competence.

the mainstream and the alternative narrative of erta The Mainstream Narrative The mainstream narrative concerning the ERTA decision focuses predominantly on the ‘international law’ question concerning the accepted approach of treaty interpretation under the principle of conferral and the alternative ‘constitutional’ question of the implied powers doctrine. The decision is famous for establishing the implied powers doctrine of EU law.83 The essence 81

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Now art. 216(1) TFEU: The Union may conclude an agreement with one or more third countries or international organisations where the Treaties so provide or where the conclusion of an agreement is necessary in order to achieve, within the framework of the Union’s policies, one of the objectives referred to in the Treaties, or is provided for in a legally binding Union act or is likely to affect common rules or alter their scope. The ‘ERTA principle’ can also be seen in this provision. Unhelpfully, however, the language is not identical to that used in art.3(2) TFEU. In art.3(2) TFEU, the Union has exclusive competence to enter into international agreements, inter alia, where the conclusion of such an agreement ‘may affect common rules or alter their scope’. Under art. 216(1), however, the Union may conclude an agreement with one or more third countries or international organisations inter alia, where the conclusion of an agreement ‘is likely to affect common rules or alter their scope’. It remains to be seen whether this difference in terminology will have practical repercussions for the Union’s external powers. A conspiracy theorist might suggest that the Commission deliberately waited for the Council to proceed unchallenged, planning all along to bring this action challenging the Council’s authority to act. This would, however, be a bridge too far (surely?). See discussion in e.g., Paul Craig and Grainne de Burca, EU Law: Text, Cases and Materials (5th edn), Oxford University Press, Oxford, 2011, 77, 308; Damien Chalmers et al., European

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of the doctrine is contained in paragraphs 14–19 of the decision. Paragraph 18 of the judgment stipulates that this competence is exclusive to the EU institutions. According to this doctrine, the EU institutions have implied powers to enter into international agreements in addition to the express powers set out in the EECT.84 These implied powers flow from Treaty provisions other than those setting out the express treaty-making powers. They also flow ‘from measures adopted, within the framework of those provisions, by the Community institutions’.85 According to the Court, whenever the Community adopts provisions setting down common rules to give effect to a common policy in the Treaty, the Member States no longer have the right, ‘acting individually or even collectively, to undertake obligations with third countries which affect those rules’.86 This aspect of the ERTA decision spawned case law that further developed the doctrine of implied powers.87 A common feature of this jurisprudence is that it shaped the contours of the EU’s external competence, both exclusive and shared. This has been comprehensively, if not exhaustively, explored elsewhere.88 In standard texts on EU law, the mainstream treatment of the ERTA decision in this context ranges from simply referring to the case as a point of departure for a more detailed discussion of subsequent case law89 to discussion that considers the ERTA decision itself in some detail in relation to the doctrine of implied powers before proceeding to a consideration of the case law that has further developed that doctrine.90 The doctrine itself may be settled but, as Hillion observes, referring also to Cremona, ‘the conditions of its application remain contentious . . . still the subject of . . . academic discussion, institutional debate and new case law’.91 This is only to be expected, however, and (perversely perhaps) welcomed. Notwithstanding the exclusive and shared competences enumerated in the TFEU in Title I (the result,

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Union Law (2nd edn) Cambridge University Press, Cambridge, 2010, 640; Piet Eeckhout, EU External Relations Law (2nd edn), Oxford University Press, Oxford, 2012, chapter 4. 85 86 Now set out in arts. 207(3), 209(2), 216 and 217 TFEU. ERTA, [16]. ERTA, [17]. See, e.g., Paul Craig and Grainne de Burca, EU Law: Text, Cases and Materials (5th edn), Oxford University Press, Oxford, 308ff. Most notably by Piet Eeckhout, EU External Relations Law (2nd edn), Oxford University Press, Oxford, 2011. See also the work of J. H. H. Weiler, Marise Cremona and Christoph Hillion. See, e.g., Damien Chalmers, Gareth Davies and Giorgio Monti, European Union Law (2nd edn), Cambridge University Press, Cambridge, 2010, 640. E.g., Craig and de Burca, n. 22 to this chapter; see also contributions by Piet Eeckhout, Christoph Hillion, Paolo Mengozzi and Robert Post in Part VI, Maduro and Azoulai, n. 2 to this chapter. Christoph Hillion, ‘ERTA, ECHR and Open Skies: Laying the Grounds of the EU System of External Relations’, chapter 3 in Maduro and Azoulai, n. 2 to this chapter.

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largely, of the case law to which Hillion refers), there will undoubtedly continue to be case law in this area as the Member States and the EU institutions test the boundaries and limits of their respective competencies.

An Alternative Narrative The ERTA decision is, understandably, a key decision in the canon of EU external relations law. It is often understood to be one in which the ECJ sought to extend the integration of the EEC (in particular) at the expense of the competence (and sovereignty) of the Member States.92 It has also been interpreted as part of a federalist, centralist strategy on the part of the ECJ.93 These mainstream interpretations of the ERTA decision owe as much to the particular disciplinary lens of those expressing them as they do to the ECJ’s judgment. Both Stein and Weiler, for example, examine this judgment, if not the EEC and its successors as a whole, primarily through the lens of constitutional law and public international law.94 This observation holds true for nearly all scholars who have analyzed this decision in any detail.95 This, in turn, is completely understandable given the central role of the ERTA decision in the creation and shaping of the EU’s external relations powers, not least because the decision establishes the implied powers doctrine in EU law. A consequence of this, however, is that the decision tends to be overlooked in relation to aspects of the EU legal system other than in relation to its external relations. This is regrettable because the decision is at least as significant for the changes it fashions within the EU legal system. First, of course, following from the establishment of the doctrine of implied powers, the decision delimited the policy areas in which the EU itself could negotiate and conclude international agreements with third parties. It is in this respect that the decision is invariably mentioned as the point of departure for the case law that has subsequently shaped the scope and reach of the EU’s external

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See, e.g., Trevor C. Hartley, The Foundations of European Union Law (7th edn), 2010, 178: ‘What the Court was intent on doing was enhancing the Union’s powers and thus reversing the previous trend away from Commission involvement in international negotiations.’ See, e.g., discussion in Rasmussen, ‘Rewriting the History of European Public Law’ [2013] 28 American University International Law Review 1187–1221 at 1191, n. 3 to this chapter, discussing the work of Eric Stein and Joseph H. H. Weiler on the development of their constitution-making theory. See, e.g., Stein, n. 44 to this chapter, at 22–24; J. H. H. Weiler, ‘The Transformation of Europe’ (1991) 100 Yale Law Journal 2403–83, at 2416–17. See generally, e.g., the work of Piet Eeckhout, Marise Cremona and Christophe Hillion.

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relations powers.96 Given this focus, however, consideration of ERTA and subsequent decisions is dominated by reflections on whether, and if so to what extent, augmenting EU external powers comes at the expense of Member States’ external powers. These mainstream interpretations, while understandable at the time they were first expressed, may account in part for the effect of the ERTA decision but overreach in terms of what the ECJ was doing in coming to its decision in this case. In other words, the significance of the decision in one respect has overshadowed other significant aspects of it that can be revealed by a fresh look at the text of the judgment itself. An alternative understanding of the ERTA decision is proposed: one that takes the Court at its word and views the European Economic Community as a new legal order of international law in the broadest sense, a sui generis legal system, not merely an international organisation, even a ‘special one’. Davies addresses the question of the EU as a new legal order in his examination of the concept of a ‘metastate’.97 Engaging with the idea of a new legal order, we are better able to appreciate the EU in all its current complexity as a single entity, moving beyond the restrictiveness of the public law perspectives of constitutional and international law. If Van Gend and Costa were the first two foundation stones of this ‘new legal order of international law’, then ERTA was the third one. Following the rulings in Van Gend and Costa,98 a tenuous hierarchy between the Member States and the Community institutions was established through the preliminary ruling mechanism and pursuant to which Member State laws were subordinated to Community law, to the extent of any incompatibility between them.99 As a result of those decisions, the 96

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This jurisprudence has been the subject of close if not exhaustive consideration, most notably by Piet Eeckhout in EU External Relations Law (2nd edn), Oxford University Press, Oxford, 2011; J. H. H. Weiler, The Constitution of Europe, Cambridge University Press, Cambridge, 1999. ‘This Europe would be a “metastate”, in that it would both be above and within the Member States, in much the same way, perhaps that a meta-narrative is at the same time greater than but reliant on the localised stories that constitute it. The end result of this being that the Member States remained at the most fundamental level, despite the autonomy of the European system, the ultimate containers of sovereignty and democratically accountable legitimacy. This would be a system of shared constitutional governance in which the European polity is empowered by the sacrifice of national sovereignty, but not at the cost of the constitutional identity of the Member States.’ Bill Davies, ‘Resistance to European Law and Constitutional Identity in Germany: Herbert Kraus and Solange in its Intellectual Context’ (2015) 21(4) European Law Journal 434 at 446. See the discussion above regarding the submissions from the Council and the Advocate General’s approach. The work of Bill Davies, Karen Alter, Morten Rasmussen and authors contributing to this collection demonstrates how tenuous and contested this ‘hierarchy’ was and is. See, e.g., Bill Davies, Resisting the European Court of Justice: West Germany’s Confrontation with

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Member States were held accountable for complying with their treaty obligations not only by the other Member States and the Commission100 but also by their own citizens. With these two preliminary ruling decisions, the development of this new legal order internally was almost but not completely assured. This embryonic system could still be undone if Member States were able to bind themselves to obligations in international agreements that were incompatible with their obligations within the new legal order. This vulnerability was recognized and addressed in the ERTA decision. Therefore, in ERTA, the starting point of the Court is the express linkage between the new international legal order and the Member States and their citizens as expressed in this paragraph from the earlier Van Gend judgment: The conclusion to be drawn from this is that the Community constitutes a new legal order of international law for the benefit of which the states have limited their sovereign rights, albeit within limited fields, and the subjects of which comprise not only the Member States but also their nationals (emphasis added).101

In describing a ‘new legal order of international law’, the Court in Van Gend aimed to differentiate the EEC Treaty from other treaties, signalling that the approach to its interpretation might well be a novel one. The Court drew support for its interpretation from express statements in the Treaty preamble concerning the Member States and their citizens and the fact that the Treaty established EU institutions ‘endowed with sovereign rights, the exercise of which affects the Member States and also their citizens’ (emphasis added).102 On this point, the Court also relied on the fact that the nationals of these Member States ‘are called upon to cooperate in the functioning of the Community through the intermediary of the European Parliament and the Economic and Social Committee’.103 In ERTA when the Court referred to the ‘general system of Community law in the sphere of relations with third countries’,104 it adopted the same approach to treaty interpretation that it had taken in Van Gend. Similarly, in ERTA the Court legitimized its departure

European Law 1949–1979 (Cambridge University Press, Cambridge, 2012); Karen Alter, Establishing the Supremacy of European Law: The Making of an International Rule of Law in Europe (Oxford University Press, Oxford, 2001); Morten Rasmussen, ‘Rewriting the History of European Public Law: The New Contribution of Historians’ (2013) 28 American University International Law Review 1187; and the research project at the University of Copenhagen: Towards a New History of European Public Law: http://europeanlaw.saxo.ku.dk. 100 As provided for in EEC Treaty arts. 226 and 227 (now art. 258 and 259 TFEU). 101 102 103 104 C26/62 Van Gend [1963] ECR 1, 12. Ibid. Ibid. ERTA, paragraph 12.

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from applying traditional principles of treaty interpretation by relying on the ‘general system of Community law’ which the Member States themselves had created and responsibility for the interpretation of which they have given the Court.

conclusion Important as the doctrine of implied powers is, the ERTA decision is also significant for the EU’s internal structure as a ‘new legal order of international law.’ A consideration of this facet of the decision leads to a deeper appreciation of the decision’s legacy and a better understanding of the EU as a unique legal system. As noted earlier, the new legal order identified by the Court in Van Gend would have been quite undone if Member States had been able to bind themselves to obligations that were incompatible with their Community law obligations. This would have been the result had the Court adopted the approach supported by the Advocate General.105 However, it would also have meant that the Community institutions would only have had competence to enter into international agreements with third countries in those areas expressly provided for by the Treaties. The effect of this limited competence would have been to subordinate the Community legal system to those of the Member States in external relations. There is no question that the ERTA decision is one of the most significant decisions in the development of the EU legal system. A great deal has been written about the significance of the decision as a matter of constitutional law and of international law in particular, as already noted. It has been suggested that much of this work, particularly the concepts of ‘constitutionalization’, was ‘deeply normative attempts to legitimize and strengthen the case law of the ECJ’.106 The decision was equally significant for the internal development of the EU legal system. It sent a clear message to the Member States: the Council was not simply a ‘secretariat’ for coordinating Member States’ positions in

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Piet Eeckhout, ‘Bold Constitutionalism and Beyond,’ chapter 2 in Part VI, of Miguel Poiares Maduro and Loïc Azoulai (eds), The Past and Future of EU Law: The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty, Hart Publishing, Oxford, 2010. True, as Eeckhout notes, such problems could be resolved ‘through conflict rules and principles of coordination and co-operation’. Morten Rasmussen, ‘Rewriting the History of European Public Law: The New Contribution of Historians’ (2013) 28 American University International Law Review, 1187 at 1221.

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particular policy areas, whether considered internally, i.e. vis-à-vis each other, or externally, i.e. Member States and the EU vis-à-vis third states. Fresh eyes must bring fresh insights into the seminal decisions of the European Court of Justice. Unquestionably, the ERTA decision is one such decision. It has much more to offer in terms of understanding the development of this sui generis legal system than simply the principles of external competence for which it is most widely known.

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part iii

Human Rights and Citizenship

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9 Internationale Handelsgesellschaft and the Miscalculation at the Inception of the ECJ’s Human Rights Jurisprudence bill davies

introduction The European Court of Justice’s (ECJ) Internationale Handelsgesellschaft1 ruling delivered in the last days of 1970 reaffirmed and extended the Court’s established doctrine of supremacy.2 In cases of conflict, the Court held, as it did in Costa, that Community law must prevail over Member States’ laws in order for the entire legal basis of the Treaties themselves not to be called into question. However, in Internationale, the Court went further still: not even the principles of national constitutional law or the fundamental rights enshrined in the Member State constitutions could limit Community law. Instead, the Court discovered fundamental rights as “an integral part of the general principles” of Community law. Moreover, the ECJ was “inspired by the constitutional traditions common to the Member States” but which were “protected” by the ECJ itself without oversight from Member State courts. While the ECJ had first forayed by its own admission in a cursory manner3 into the human rights realm in the Stauder judgment the previous year,4 Internationale is celebrated as the real inception of the ECJ’s human rights jurisprudence. Doctrinal accounts tend to emphasize the linear development of the Court’s human right’s thinking, highlighting a line of cases in the 1970s running through Internationale in 1970, Nold in 19745 and Hauer in 19796

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Case 11/70 Internationale Handelsgesellschaft vs. Einfuhr- und Vorratsstelle für Getriede und Futtermittel [1970] E.C.R. 1125 (hereafter Internationale). Case 06/64 Costa vs. ENEL [1964] E.C.R. 585. P. Pescatore (1970). Fundamental Rights and Freedoms in the System of the European Communities. American Journal of Comparative Law 18, 343–51. Case 29/69 Stauder vs. Ulm [1969] E.C.R. 419. Case 04/73 Nold vs. Commission [1974] E.C.R. 491. Case 44/79 Hauer vs. Land Rheinland Pfalz [1979] E.C.R. 321.

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that form the core of the Court’s early thinking in this area.7 Despite the rather “mundane”8 characteristics of the preliminary questions, Internationale has acquired legendary status among EU law scholars. The ruling is now a keystone of the “constitutional arch”9 of the European legal order. The Court began to endow Community law “with the principles inherent in the rule of law”.10 It also marks a “rite of passage”11 of the ECJ and its evolution as an “example”12 for other international courts in the area of human rights protection.13 But what if, despite the canonical nature of this case, there lays at the heart of Internationale a strategic miscalculation on the part of the ECJ? The miscalculation rested on the misperception that the German judiciary would happily accept the extension of the supremacy of Community law over national constitutional principles and structures that Internationale proposed. In fact, the German Constitutional Court (BVerfG) rejected the Internationale doctrine when the lower national court, here the Frankfurt Administrative Court, re-referred the case within its domestic hierarchy after receiving the ECJ’s opinion in 1970.14 The BVerfG admonished its European counterpart 7

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Typically, D. Chalmers, G. Davies and G. Monti (2014). European Union Law: Texts and Materials. Cambridge: Cambridge University Press, 3rd edn., pp. 251–53; J. Dinnage and J.-L. Laffineur (2012). The Constitutional Law of the European Union. New Providence, RI: Lexis Nexis, 3rd edn., pp. 110–12; P. Craig and G. De Burca (2003). EU Law: Text, Cases and Materials. Oxford: Oxford University Press, 3rd edn., pp. 290–95. M. Kumm (2010). Internationale Handelsgesellschaft, Nold and the New Human Rights Paradigm. In M. P. Maduro and L. Azoulai (eds.), The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty. Oxford and Portland: Hart Publishing, pp. 106–18. Ibid, p. 97. J. N. Cunha Rodrigues (2010). The Incorporation of Fundamental Rights in the Community Legal Order. In M. P. Maduro and L. Azoulai (eds.), The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty. Oxford and Portland: Hart Publishing, pp. 89–97. T. Tridimas (2010). Primacy, Fundamental Rights and the Search for Legitimacy. In M. P. Maduro and L. Azoulai (eds.), The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty. Oxford and Portland: Hart Publishing, pp. 98–105. B. Brun-Otto (2010). The ECJ’s Fundamental Rights Jurisprudence – a Milestone in Transnational Constitutionalism. In M. P. Maduro and L. Azoulai (eds.), The Past and Future of EU Law. The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty. Oxford and Portland: Hart Publishing, pp. 119–30. Karen Alter’s work is seminal in its discussion of the dissemination of the CJEU model generally and in policy areas to other international legal systems. For a recent example of this work, see K. Alter (2014). The New Terrain of International Law: Courts, Politics, Rights. Princeton: Princeton University Press. Internationale is best understood as two higher court decisions prompted by a single lower national court: the Frankfurt Administrative Court (FAC). The first ruling left Frankfurt in March 1970 and was decided in Luxembourg by the ECJ in December 1970 – this one we

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in May 1974 in a decision known otherwise as Solange I, in which it kept the final say on rights adjudication as long as (Solange) an equivalent system of rights protection initiated by a democratically elected parliament did not exist at the European level.15 This national resistance forced the ECJ to rethink and flesh out the Internationale doctrine, so that by the turn of the decade, in its 1979 Hauer ruling, the Court was much more careful and explicit in citing European and national sources of rights protection than it had been willing to initially in Internationale. At the heart of this miscalculation by the ECJ is then a fundamental disconnect between the court, its ambitions and the reception by the Member States. By looking deeper into the context of the Internationale-Solange dialogue, this chapter addresses three elements leading to the ECJ’s miscalculation: -

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First, there were significant changes in the personnel of the ECJ just prior to the ruling, particularly embodied in the appointment of Pierre Pescatore as judge in 1967, as well in the general context for integration that led the Court to enthusiastically and somewhat stubbornly pursue its aspiration to consolidate and extend the Community’s legal order in the constitutional direction. Second, the Court misread both the intentions of the lower German court and the general attitudes within the German legal community broadly towards European law. A positive reception of the Internationale doctrine in Germany seemed increasingly unlikely by the turn of the 1970s as legal consensus shifted toward the idea of the necessity of ‘structural congruence’ between European and national orders for a transfer of national competency to be legitimate. Third, the ‘story’ of Internationale is really a tale of two closely related, adolescent legal siblings – the ECJ and the BVerfG – working out, in parallel but in an ever more interwoven and uniquely European way, their own identities and the nature and conditionality of their relationship.

from frankfurt to luxembourg: internationale In many ways, the Internationale ruling is an archetype ‘European’ case. It involved all the mean elements that characterize the EU’s legal system: (1) a preliminary ruling request (2) from a German court (3) with a connection to

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know as Internationale; the second ruling resulted from the FAC’s disagreement with the ECJ’s advisory and the case being re-referred domestically to the BVerfG in Karlsruhe in November 1971. 2 BvL 52/71 - Solange I decision, 29 May 1974 - BVerfGE 37, 271 (Hereafter: Solange I).

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intra-European trade (4) and a link to the Common Agricultural Policy (CAP). Factually, what was at stake in the initial case was a deposit of 17,000 Deutschmarks that would be lost by the Internationale Handelsgesellschaft firm as it failed to fulfill its export quota for ground maize. The deposit system for import and export licenses for agricultural goods had been established in Council Regulation 120/67 of June 1967 and Commission Regulation 473/67 of August that same year. The firm, on hearing from the German authority that it would forfeit its deposit, took the case to the FAC, perhaps aware of this Court’s resistance to European norms in this area. The FAC made clear at some length its rejection of this and previous license schemes based on Regulations in its referral to the ECJ, a fact that the Luxembourg court and the Commission’s Legal Service representatives in the case were, given remarks to this effect in the case submissions, undoubtedly aware. Yet, aside from factual questions related to the deposit system, at the real heart of the FAC’s two referrals was a much broader and existential question on the nature and dynamic of European legal integration. Could the supremacy of European law preclude conflicting national constitutional structures and principles? And what if, as in the German case, certain parts of the constitutional order, especially its democratic structure and the fundamental rights catalogue, could not be amended by anyone in any form? This was a particularly pressing question in Germany at the time, and had featured centrally in the German legal academy’s wrestling with legal integration even since from the negotiations of the Treaty of Paris in the early 1950s. The FAC referred to Luxembourg only reluctantly, with the Commission’s Legal Service representative in the case, Claus Dieter Ehlermann,16 scolding the FAC for this delayed response.17 Our understanding of the judicial behavior in Frankfurt is currently and unfortunately incomplete. While the referral documents list the names of the fourth chamber FAC judges who signed the preliminary ruling request (Kramer, Achtmann, Boettger), it appears that the archival documents relating to the case in the Hessian State Archive have been lost.18 The FAC repeatedly found the regulations regarding

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In the case, Claus-Dieter Ehlermann, who would go on to become Director General of the Legal Service between 1977 and 1987, represented the Commission. See INT-150, interview with Ehlermann, recorded 8 October 2010, Historical Archives of the European Union, http:// archives.eui.eu/en/oral_history/INT150 (last accessed 3 Dec. 2016) Archive of the European Commission, BAC 371/1991, Ehlermann, Claus-Dieter, Schriftsatz an den Herrn Prasidenten und die Herren Mitglieder des Gerichtshofes der Europäischen Gemeinschaften, 12 June 1970, JUR/1650/70. As of February 2014. Correspondence with Hessisches Hauptsstaatsarchiv, on file with author.

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the deposit system to be illegal, so perhaps it was searching for a level of legal clarity for itself and future parties to the scheme. However, it is also clear from the FAC’s referral that much more was also on its mind. The FAC asked two questions related to the legality of two European Regulations, specifically (1) the forfeiture of deposits and (2) the application of force majeure in such cases. Arriving in such a form at the Registrar’s office on the Kirchberg, it would likely have seemed fairly routine and straightforward. However, in the explanation of the questions, the FAC opined that even if the BVerfG had accepted the separateness and autonomy of European law in 1967, it still could not be argued that Germany had renounced its rights . . . to protect elementary constitutional rights within the framework of a European Community. It must be assumed that the German legislator agreed to enter the E.E.C. only on condition that the law governing the relations between the Community states is equivalent in value to German constitutional law, and thus the essential structural principles of national law are protected in Community law.19 (emphasis added)

The FAC argued that if the articles of the regulations in question violated the German constitution – particularly, in this case, the principle of proportionality that forms an integral part of the BVerfG’s understanding of the German rule of law – then they would be invalid. Indeed, the implication was that if there was insufficient “structural congruence”20 between the European and national orders, then the Treaty itself was equally unacceptable. It seems likely to assume, given these broader musings, that more than just clarity over the deposit scheme was involved here. It seems likely, given what followed, to assume that the FAC was interested in fetching the ECJ’s opinion before it could refer the case again within its own domestic hierarchy. What precisely the FAC hoped to gain by stoking a possible conflict between the German and European judiciaries is unfortunately currently lost to our historical memory. As is now clear, the ECJ, supported by the submissions of the Advocate General Lamothe21 and the Commission’s Legal Service, disagreed with the

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11/70 Internationale Handelsgesellschaft m.b.H v. Einfuhr und Vorratsstelle für Getreide und Futtermittel, CMLR 1970, 44, 295. On the origins and influence of the Structural Congruence paradigm in Germany, see Bill Davies, Resistance to European Law and Constitutional Identity in Germany: Herbert Kraus and Solange in its Intellectual Context, European Law Journal, Vol. 21, No. 4, July 2015, pp. 434–59. Opinion of Mr. Dutheillet de Lamothe, Case 11/70 Internationale Handelsgesellschaft m.b.H v. Einfuhr und Vorratsstelle für Getreide und Futtermittel, [1970] E.C.R. 1125,1146–7.

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FAC and ruled that European law could not be inhibited by national constitutional principles. The ruling distilled and extended the ECJ’s aspiration to consolidate an autonomous and effective legal system for Europe, separate and distinct from its national components. This legal system would employ the Treaties and laws for the Union to create rights for private parties within the Member States, and would hold supremacy over conflicting national laws. This had been established in the initial “constitutional” doctrines of the ECJ in 1963 and 1964. Now, a further revolution was taking place. From Internationale onward, a European measure could not be “affected by allegations that it runs counter to either fundamental rights as formulated by the constitution of [a] state or the principles of a national constitutional structure”.22 The ECJ intimated that denying this would call into question “the legal basis of the Community itself”.23 Moreover, the ECJ itself could act as guardian of European rights, given that it was inspired and guided by the general principles of European law and the constitutional traditions of the Member States. In effect, the Treaties would serve as a constitution for Europe, brought about by the careful and incremental jurisprudence of the Court.24 Perhaps against the expectations of the Court itself, the earlier decisions of Van Gend en Loos and Costa had garnered very little critical response from national judiciaries. In fact, Germany had been identified by Advocate General Lagrange in Costa as one of the Member States in which supremacy might meet the most resistance,25 yet the BVerfG had apparently affirmed its support for the autonomy of the European legal system in 1967,26 and information collected by the Commission from Germany seemed to indicate a positive academic reception of the doctrines. It must have seemed to interested parties that a referral from a German court at this time would be ideal for extending the Court’s jurisprudence on supremacy. Equally, given the saliency of rights protection in Germany and the discovery of fundamental rights in Stauder the year before, the case would have seemed appropriate for bolstering the ECJ’s thinking in this area too. The Internationale ruling was in this way quite predictable and very much in line with the doctrines already established by the ECJ in the Costa-Stauder doctrinal nexus. Therefore, in Internationale, the ECJ ruled in precisely the way we might think the FAC suspected it would.

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23 24 Internationale, para. 3 Ibid. See Boerger and Davies’s chapter in this volume. Opinion of Mr. Advocate General Lagrange, delivered on 25 June 1964, p. 604. 1 BvR 248/63 & 216/6 - European Regulations decision, 18 October 1967 - BVerfGE 22, 293.

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from frankfurt to karlsruhe: solange i The FAC rejected the ECJ’s advisory and continued to hold that the regulations in question were “unconstitutional.”27 As a result of the fundamental disagreement with Luxembourg’s ruling, the FAC re-referred the case to the BVerfG in July 1971. Taking a characteristically long time to reach it decision,28 the BVerfG allowed for academic and public opinion to coalesce on the issue. In the meantime (and fully aware that Frankfurt had rejected its advice and facing a similar rebellion in Rome),29 the ECJ took the opportunity to clarify its thinking on the rights issue in Nold. Here the ECJ held that it drew its inspiration: from the constitutional traditions common to the Member States and cannot uphold measures which are incompatible with the fundamental rights established and guaranteed by the Constitutions of these States.30

But the BVerfG still rejected this. In its Solange I judgment, the BVerfG sided with the equivalency argument found in the FAC preliminary reference, declaring that: As long as [Solange] the integration process has not progressed so far that Community law receives a catalogue of fundamental rights decided on by a parliament and of settled validity, which is adequate in comparison with the catalogue of fundamental rights contained in the Basic Law, a reference by a court of the Federal Republic of Germany to the Federal Constitutional Court in judicial review proceedings, following the obtaining of a ruling of the European Court under Article 177 of the Treaty, is admissible and necessary if the German court regards the rule of Community law which is relevant to its decision as inapplicable in the interpretation given by the European Court, because and in so far as it conflicts with one of the fundamental rights of the Basic Law.31

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Verwaltungsgericht Frankfurt a.M., Beschluss vom 14.07.1972 – II/2- E 228/69, reported in Aussenwirtschaftsdienst des Betriebs-Beraters, November 1971, 11, pp. 541–46. C. J. Mann (1972). The Function of Judicial Decision in European Economic Integration. The Hague: Martinus Nijhoff Publishers, pp. 184, 420–21. In the Frontini ruling, the Italian Constitutional Court held that European laws could not be allowed to violate the fundamental principles of the Italian constitution, although given the primary economic nature of European law, this was unlikely to happen. Case Frontini e a., in Giur. Cost., 2401 n. 183 27 Dec 1973. Case 04/73 Nold vs. Commission [1974] E.C.R. 491. 2 BvL 52/71 - Solange I, 29 May 1974 - BVerfGE 37, 271.

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The BVerfG had called the ECJ’s bluff, reserving the right to judge on the validity of European law in Germany, as long as (in German: Solange) an equivalent set of fundamental rights drawn up by a democratic institution was not in place at the European level.

the cost of miscalculation Five months after this decision, the FAC wrote to the ECJ to explain that the firm had dropped its case due to the BVerfG’s ruling.32 Yet, this was not the end of the story. In its own peculiar admonitory terms, the Solange ruling had crystallized a clear and public disagreement between two of Europe’s highest courts on an issue of existential concern to the European legal order. The ECJ’s ambitious Internationale ruling had provoked a full-blown, genuine constitutional crisis, and there would be a price to pay, both in the short and longer term.33 Trying to preempt the BVerfG’s pending Solange decision, the ECJ was forced rather quickly to flesh out its rights jurisprudence, bringing in and clarifying the use of the European Convention of Human Rights (ECHR) and national constitutional traditions in its Nold ruling of 1974. Issued just two weeks before the BVerfG was due to give its own interpretation of the Internationale case, the ECJ ruling was an obvious olive branch to the BVerfG and was recognized as such by the Director General of the Commission’s Legal Service in a speech given to the European Parliament’s Legal Affairs Committee in October 1974.34 Moreover, however constructively framed, the BVerfG had delivered a clear “admonition”35 to the European order as a whole. Fearing that “the legal basis of the community itself” had indeed been “called in question”, the European institutions, with no small help from a highly embarrassed German government, moved quickly to improve the level of fundamental rights protection within the Community as whole beyond just the Court’s jurisprudence. Whilst a charter of rights and possible accession to the ECHR were considered and 32 33

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Letter from Judge Henze to European Court of Justice, 24 October 1974. The fuller story of the fallout from the Solange ruling is told in B. Davies (2013). Pushing Back: What Happens When Member States Resist the European Court of Justice? A Multi-Modal Approach to the History of European Law. Contemporary European History, 21 (3), 417–35. See Politisches Archiv des Zwischenarchiv 121875 424.50 SB3 – Arbeitsgruppe “Euro Burgerrechte”. A tactic favored by the BVerfG in this time period – see W. Rupp-v.Brünneck (1972). Admonitory Functions of Constitutional Courts. American Journal of Comparative Law, 20, 387–403.

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quickly ruled out, a Joint Declaration was reached in 1977 by the political institutions of the Community to voluntarily adhere to the ECHR. Interestingly, however, the ECJ did not participate in this, fearing that accession to the ECHR would relegate it to a second-order court, below the European Court of Human Rights (ECtHR). The ECJ’s resistance to accession at the time was a main point of friction in slowing down that move, foreshadowing its opposition to ECHR accession in Opinion 2/13 thirty years later.36 Instead, feeling under pressure jointly from the BVerfG and by repeated attempts by the European Commission to push for accession, the ECJ further interpreted its rights jurisprudence in the Hauer ruling in 1979, using both national (German) constitutional provisions as well as the ECHR in its reasoning. This modification was enough to appease the BVerfG, which subsequently removed its conditionality on the rights issue in the Solange II ruling. Longer-term, though, the nature of the ECJ-BVerfG relationship has continued to be framed in this same admonitory ‘Solange’ formula. While it is possible to believe that the BVerfG in 1974 was delivering genuinely constructive critique aimed at improving rights protection in Europe, subsequent iterations of Germany’s highest court have not always been so Euro-friendly. The BVerfG’s subsequent Maastricht decision,37 which followed the thread of the initial Solange ruling in criticizing the nature of European democracy, set a much harsher tone towards Europe. Nowadays, particularly since the onset of the financial crisis in 2008 and European attempts to remedy that situation, a “yes” from Karlsruhe is a prerequisite for much European policy. This has been a significant longer-term cost to European governance and arguably also to the prestige of the ECJ itself. The idea that Internationale represented a miscalculation on the part of the CJEU runs counter to much of the literature on this ruling. Kumm’s account considers Internationale and Nold as pairing, representing a shift in the CJEU’s understanding of rights concomitant to a new rationalist human rights paradigm of the post-war period.38 Here, instead, we will see that Nold in cold reality was not merely part of a broad jurisprudential shift in the Court’s thinking, but rather a judicial-political decision, a peace offering by the CJEU to its German counterpart just weeks before the BVerfG delivered its Solange decision. Equally, Bryde recounts a “classroom” narrative of the development of European rights between the German and European judiciaries, which he 36 37 38

Opinion 2/13 of the Court (Full Court), 18 December 2014. 2 BvR 2134, 2159/92 – Maastricht Decision, 12 October 1993 - BVerfGE 89, 155. Supra, n. 8.

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criticizes for its lack of chronological accuracy. But his own narrative, shorn from its historical contextualization, also lacks sufficient nuance. The story delivered in this chapter provides evidence, counter to Bryde, that it is the CJEU that changes its jurisprudence, as well as ultimately does the BVerfG – only much later.39 Opposed to the idea that the ECJ has successfully tiptoed along a tightrope, trying to address “the sensitivities of the national supreme courts without endangering the fundamental principles of Union law”,40 the story of miscalculation demonstrates a highly problematic and very public dispute between two of Europe’s highest courts. The German resistance to Internationale prompted changes in the nature of European governance and ultimately forced the ECJ to modify its rights case law by the end of the 1970s to be more sensitive to concerns and pressure from the Member States and even the European Commission. This was the Community’s first constitutional crisis and an embarrassing way for the ECJ to begin its rights jurisprudence.

explaining the miscalculation At the heart of this miscalculation was a fundamental disconnect between the ECJ and the German context. While the ECJ was enthused and energized by a changing integration dynamic in the late 1960s and a change in personnel on the panel from 1967 on, the German context was becoming increasingly critical of the ECJ’s constitutional aspirations. When this issue came to a head, we find two young supreme courts vying to clarify their relationship to each other and within their own respective systems.

luxembourg and the spirit of the late 1960s The ECJ entered the 1970s an entirely different institution from the one of the previous decade. From 1967 on, the Court underwent a number of crucial changes in its composition. First, in 1967, Robert Lecourt replaced Leon Hammes as President of the Court. Lecourt came to the Court in 1962 and reportedly helped to tip the balance in favor of accepting the direct effect and supremacy doctrines.41 Lecourt viewed the Court as a bulwark against

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The BVerfG accepted the CJEU’s rights thinking and recanted on the original Solange judgment in the so-called Solange II judgment of 1986. 2 BvR 197/83 - Solange II decision, 22 October 1986 - BVerfGE 73, 339. 41 T. Tridimas (2010), p. 103. See Rasmussen’s chapter in this volume.

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vacillating political will for integration42 and used his control of the docket to employ particular judges in cases that served the end of pushing for greater integration.43 He was also able to absorb the appointment of the first accession judges from the typically Eurosceptic Member States.44 From Lecourt’s presidency to 1976, this new “1967 Court” was responsible for a number of seminal rulings that built on and beyond the Van Gend-Costa jurisprudence, not least in Internationale, but also in the extension of direct effect horizontally45 and to regulations.46 By the early 1970s, this bold new college of judges faced an outlook for European integration that was the best it had been in nearly a decade. The transitional period for the entry into force of all the rules in the Rome Treaty (Article 8) was ending. As a result, European law “mattered” much more for the Member States and their citizens. Moreover, there had been little negative reaction to the ECJ’s jurisprudence of 1963–64. As noted, the BVerfG had even gone so far as to confirm the autonomy of European law in 1967, and the German legal academy appeared to be coming onboard. The spirit of the times was encapsulated in The Hague Summit of the heady summer of 1969 and its promise to widen and deepen the integration project. The ECJ was poised and ready to play its role in this process. Internationale provided a great opportunity to consolidate the gains of 1963–64 and to push further the boundaries of European legal integration. Moreover, this new Court was rejuvenated by the changing of judges from Luxembourg and Belgium, where Pierre Pescatore and Josse Mertens de Wilmars,47 who were forty-eight and fifty-five years old, respectively, replaced 42 43

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R. Lecourt (2008). L’Europe des juges. Brussels: Emile Bruylant. Pierre Pescatore repeatedly appeared as the reporting judge on the crucial fundamental rights cases through the period – including both Internationale and Nold. For an interesting, speculative attempt to analyze how the Court reproduced its constitutional approach to new judges, see A. Vauchez (2012). Keeping the Dream Alive: The European Court of Justice and the Transnational Fabric of Integrationist Jurisprudence. European Political Science Review, 4 (1), 51–71. Of these new judges, we know that Sørensen adhered to the traditionalist perspective on European law and, as a result, had great difficulty functioning in the 1967 Court environment. Court of Justice XXXV Anni 1951–1987, Luxembourg: OPOCE, Library of the Court of Justice, Luxembourg, 107–11. Interview with Pierre Pescatore by Morten Rasmussen, January 2007. Which also ultimately prompted a good amount of national resistance. See B. Davies and M. Rasmussen, ‘From International Law to a European Rechtsgemeinschaft: Towards a New History of European Law, 1950–1979’, in J. Laursen (ed.), Institutions and Dynamics of the European Community, 1973–83 (Nomos Verlag 2014), pp. 97–130. Leonesio -v- Ministero Della Agricoltura E Foreste; ECJ 17 May 1972 [1972] E.C.R. 287, R-93/71, [1972] EUECJ R-93/71. Mertens de Wilmars had become a noted expert in the area of European law as a lawyer in Antwerp as early as 1935 and after the war, as a proponent of European unity, became a

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Hammes and Delvaux, both of whom were born in the 1890s. Pescatore in particular was one of the most vocal and articulate of the European federalists.48 Pescatore’s charisma and expertise made him an especially dynamic member of the Court, and he is even described as European law’s “Stormtrooper” by another author in this volume.49 He thought of the Treaty of Rome as a constitution for Europe and played an instrumental part in its negotiation, ensuring that the legal mechanisms of the Treaty had powerful, quasi-constitutional characteristics.50 His role in Internationale was crucial. As Reporting Judge and dominant force on the Court, his view on fundamental rights protection in Europe clearly shaped the ruling more than any other. While it is difficult to the point of near impossibility to trace the individual authorship of an ECJ ruling, in the case of Internationale, it is fortunately somewhat easier. Pescatore’s intellectual fingerprints are all over the ruling. In fact, Pescatore published an article in the American Journal of Comparative Law between the Stauder and Internationale rulings on the topic of fundamental rights protections in the Community.51 Opening the article with reference to the “constitution of the European Communities”,52 Pescatore went on to discuss the possibility of constructing an appropriate system of rights protections for members of the Community. The Stauder ruling, in which the Court addressed rights “only in passing”,53 would be the beginning of the ECJ’s rights jurisprudence, but it is clear in the article that more was to come. Foreshadowing the Internationale ruling in language and in spirit, Pescatore indicated that the Court “was aware” of the rights problem, but also that it knew well that “fundamental human rights are included among [the] general principles of law which form an integral part of the Community law whose observance the Court must ensure”.54 It is indeed fortunate for the historical record that a Reporting Judge wrote so clearly on topic and theme, and in such temporal proximity, to such an important ruling from a normally opaque judicial organ. Here, as echoed in Internationale, the Treaties were sufficient in and of themselves for this job so that “no real need to search for a

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member of the Belgian network of the European Movement in 1950; www.europeanvoice .com/article/imported/pioneering-ecj-president-dies-aged-90/45490.aspx P. Pescatore (1981). Les Travaux du “Groupe Juridique” dans la Négociation des Traités de Rome. Studia Diplomatica, 34, 159–78 and Zehn Jahre Rechtsprechung des Gerichtshofs der Europäischen Gemeinschaften – Dix ans de jurisprudence de la cour de justice des communautés européennes. (1965). Köln, Berlin, Bonn, München: Carl Heymanns Verlag KG, pp. 520–54. 50 See Fritz’s chapter in this volume. See Davies and Boerger’s chapter in this volume. P. Pescatore (1970). Fundamental Rights and Freedoms in the System of the European Communities. The American Journal of Comparative Law, 18 (2), 343–51. 53 54 Ibid, 343. Ibid, 346. Ibid, 351.

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solution either beyond the sphere of the Community law or in the law of the national constitutions”55 existed. The European legal system and its Court were enough.

misreading the german context Pescatore was clearly aware that differences of opinion existed on this point, most pertinently in Germany. He wrote, implicitly, about the structural congruence demands made by the FAC in its ruling, but also suggested that the argument that Community law be subordinated to national constitutional standards “excessively dramatizes” the issue.56 In fact, while he was also aware that structural congruence was being demanded by “some writers, followed by some tribunals” – a clear reference to the FAC here – this theory did “not have much of a following” in Germany.57 But was this true? The resistance proffered to the Internationale ruling indicates that it was not. Indeed, if the most influential judge on the Court, responsible for drafting the judgment, had an erroneous impression of attitudes in the German judicial elites, so too did the Commission. As already noted, the Commission’s Legal Service representative in the case had scolded the FAC for not referring the issue to the European court earlier, even though the issue clearly involved a European regulation. The lower national court was clearly a reluctant partner for Luxembourg in this case. Earlier still, the Commission had been careful to set up means for influencing and monitoring legal academic opinion in the Member States towards the European court and its doctrines. It is now well documented by legal historians and sociologists how Commission President Walter Hallstein was able to exploit the capacity of the Commission and its Legal Service to promote a constitutional interpretation of the Treaties in the academic communities of the six Member States.58 The steps taken by the Commission to ensure that national legal communities were won over by the ECJ’s jurisprudence had the appearance of being effective.59 However, despite the best 55 58

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56 57 Ibid, 343. Ibid, 345. Ibid, 345. M. Rasmussen (2012) Establishing a Constitutional Practice of European Law 21 Contemporary European History Journal 3, 375–97, esp. 388–89; A. Vauchez (2010). The Transnational Politics of Judicialization: Van Gend en Loos and the Making of EU Polity. European Law Journal, 16 (1), 1–28. For this footnote, see pp. 10–11. Ibid; See also A. Bernier (2012). Constructing and Legitimating: Transnational Jurist Networks and the Making of a Constitutional Practice of European Law, 1950–1970. Contemporary European History, 21 (3), 399–415.

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intentions of Hallstein and the European institutions to stay abreast of developments in the Member States regarding attitudes towards the ECJ and its key constitutional doctrines, the situation in Germany remained poorly, and most likely incorrectly, understood. In January 1965, Hans-Joachim Glaesner of the European Commission’s Legal Service wrote to Hallstein about recent “remarkable” developments in German academic discussions on European law.60 Glaesner was pleased to report that finally, the “demand of structural congruence” had been “dropped”. Glaesner based this information off the 1964 meetings of the Kiel Congress of German Public Lawyers61 and the Bensheim Colloquium.62 Many important academics, lawyers and government officials who were in a position to shape West Germany’s European policy attended the Bensheim Colloquium. However, most prominent scholars of “classical international law” had not taken part in the 1964 Bensheim Colloquium meeting.63 As a result, Glaesner’s assessment that structural congruence had been “dropped” was misleading, and the European institutions were fed incorrect data about the situation in Germany. Instead, opinion in the German legal academy and judiciary toward European law was still coalescing. A fundamental part of this story then must deal with the West German legal elites’ struggle to come to terms with the identity and functioning of its new post-war democratic constitution. In light of Germany’s immediate past, the Basic Law (Germany’s constitution) contained elements which European integration placed in a fundamental tension. On the one hand, the permanency and inviolability of certain constitutional structures and rights were guaranteed in an ‘eternity clause’,64 whilst at the same time, Article 24 of the Basic Law allowed the German government to 60

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Memo re: Verhältnis von Gemeinschaftsrecht zu nationalem Recht, Hans-Joachim Glaesner to Walter Hallstein, 11 January 1965, in Bundesarchiv, N1266 1796 Nachlass Walter Hallstein: Verhältnis Gemeinschaftsrecht – Nationales Recht, p. 1. The Congress of German Public Lawyers is the most prestigious and established gathering in German public law, representing the central formative point for mainstream academic opinion. It was founded by Heinrich Triepel, a scion of German public and international law, in the early 1920s. For a survey of the Congress’s importance on German public law culture, see D. Thym (2005). The European Constitution: Notes on the National Meeting of the German Public Law Assistants. German Law Journal, 6 (4), 793–804. The Bensheim Colloquium was a meeting of prominent German European Law scholars organized by the newly formed German Academic Society for European Law (Wissenschaftliche Gesellschaft für Europarecht). For its impact on German scholarly debates on the nature of European law, see B. Davies (2012). Resisting the European Court of Justice: Germany’s Confrontation with European Law 1949–79. Cambridge: Cambridge University Press, esp. pp. 78 and 89. 64 Ibid. Article 79.3.

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transfer its competency to international and supranational organizations. The dedication to European integration – at the time a political choice by the immensely influential first Chancellor of the Federal Republic, Konrad Adenauer – became a keystone in Germany’s rapid economic and political rebirth after the Second World War. The transfer of powers to the thenEuropean Community placed the immutability of the sensitive parts of the Basic Law in theoretical danger. This was a point not missed by the German legal academy, even from the very earliest days.65 As a result of this inherent tension, a heated and longlasting debate emerged in Germany as to the conditions under which the full supremacy of European law over conflicting national laws could be accepted. Important here are the tensions between these two66 opposing points of view within Germany: those held by “aspirational constitutionalists”, such as Walter Hallstein, Karl Carstens and Carl-Friedrich Ophüls; and those held by advocates of “structural congruence”, such as Herbert Kraus, Hans-Jürgen Schlochauer, Wilhelm Wengler and Hans-Heinrich Rupp. This was a battle for German legal consciousness, and eventually, at least in the Solange ruling, although arguably later still, the perspective of structural congruence won out. However, this was a close-run thing. In fact, the BVerfG’s Solange decision was highly contentious within the court itself, being split 5-3 and seeing the publication of one of the BVerfG’s first and very few dissenting opinions. The “aspirational constitutionalist” view was espoused primarily by Walter Hallstein and Carl-Friedrich Ophüls, who claimed that no national limitations could be placed on European law, even if they were framed as immutable fundamental rights and principles of democratic structure. The ECJ itself, as Europe’s “Supreme Court”,67 would be suitable for adjudicating any conflicts in the seldom case they might emerge. The end goal would be a constitutional order for a unified Europe in which European and national legal orders stood side by side, but in which the Member States also voluntarily subjugated themselves to the authority of the European community.68 This 65 66

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Davies (2012), pp. 46–91. A third viewpoint, those held by the “traditionalists”, argued that the laws emanating from supranational organizations were not different from those of international organizations. This position became largely untenable from the early 1960s on, given the jurisprudence of the ECJ in Van Gend en Loos and Costa. Hallstein had just returned from a period of research at Georgetown University in Washington, DC. A speech he made at Georgetown in 1953 on the concept of European Unity can be heard here: https://repository.library.georgetown.edu/handle/10822/712627 See, for instance, W. Hallstein (1965). Intervention des Präsidents der Kommission der Europäischen Wirtschaftsgemeinschaft in der Rechtsdebatte über den Dehousse-Bericht, JuniSession 1965 des Europäischen Parlaments, 9.

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authority was grounded in a “constitution”, which (unlike a typical state constitution) was a “system of norms”. The European community would be comprised of institutions that could exercise powers and create “laws that are directly effective in the Member States”.69 It was argued that individual legal rights were better protected in the European community than in many of its Member States.70 Significantly, the proponents of this argument had their hands very much on the levers of power in the early years of integration, and due in part to this, the aspirational constitutionalist position erroneously came to be recognized abroad as the “German” view on European law. Hallstein and Ophüls were leading members of the German delegations negotiating the Treaties, with the former becoming Commission President and the latter German Ambassador to Brussels. Other supporters, such as Karl Carstens, held important ministerial positions and exerted their influence to ensure that German government policy in the early years held to this strongly pro-integration vision.71 Of course, the constitutionalist vision found resonance in the ECJ, particularly after 1967, and it was also backed by the energy and information-gathering capacity of the European Commission’s Legal Service, which in turn funded and supported academic associations in the Member States with varying degrees of success. The “structural congruence” position was inspired by the writings of Herbert Kraus, an international legal scholar who advocated for a certain level of constitutional similarity between national and European systems in order for the supremacy of European law to be considered as legitimate and acceptable. Proponents of structural congruence were supportive of European integration and an autonomous European legal order, but only as long as the Member States could simultaneously maintain their own identities and the principles enshrined in their own national constitutions. Such principles would include “the separation of powers, checks and balances, democratic legitimation, rights, the legality of administration, parliamentary control, etc”.72 As such, Europe would be a kind of “metastate”, above and beyond its constituent parts, but dependent on them for its legitimacy and

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70 Ibid, 8. Ibid, 291. Karl Carstens, at the time State Secretary in the German Foreign Office, was furious at the critical submission of the German government to the European Court of Justice during the Van Gend en Loos ruling. He used his influence to ensure that all further submissions crossed his desk before they were sent to Luxembourg. For this incident, see Davies (2012), pp. 153–57. H. Kraus (1952). Das Erfördernis struktuller Kongruenz zwischen der Verfassung der Europäischen Verteidigungsgemeinschaft und dem Grundgesetz, in Institut für Staatslehre und Politik. Der Kampf um den Wehrbeitrag, Munich, Isar Verlag, 2nd vol., p. 551.

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accountability.73 Unlike the constitutionalists, the proponents of structural congruence remained in the academic field, which might have had the benefit of ensuring that their focus in winning the intellectual battle for the German legal consciousness was less hampered by the responsibility of running a Commission or ministry. Of this group, Kraus and Hans-Jürgen Schlochauer were involved in the Treaty negotiations, although Hallstein quickly curtailed Kraus’ involvement.74 Clearly by the time of the FAC’s referral to the ECJ in the Internationale ruling, the judges of the fourth chamber of the Frankfurt panel were all seemingly convinced that a level of structural congruence between the German and European orders was needed before the transfer of national competencies could be considered legitimate. In particular, the FAC’s argument rested on the works of two legal scholars who supported structural congruence: Wilhelm Wengler and Hans Heinrich Rupp. Both scholars were critical of the supremacy doctrine and the idea that the transfer of competencies to European institutions through Article 24 could somehow lead to laws that were supreme over Germany’s national constitution. In a foreshadowing of the Solange I judgment, in 1968 Wengler wrote an article in response to the BVerfG’s acceptance of the European legal order’s autonomy. In his article, which was cited by the FAC, Wengler argued that the transference of competencies to the Community would only be valid if the Community held a similar set of fundamental rights as that of the Federal Republic of Germany. Wengler queried how German competencies could be transferred to a set of institutions that did not have basic rights protection given that the German Basic Law would consider such a transfer as a war of aggression.75 Rupp also made several fiery speeches against the ECJ’s rulings throughout the 1970s, most famously at the German Academy of Judges in January 1970, three months before the FAC’s referral to the ECJ. Rupp described the sidelining of the Basic Law by the ECJ in its 1963–64 jurisprudence as a “farce”76 and denied that the Community held any kind of institutional resemblance with the Federal Republic at all.77 It was, instead, “not

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For a discussion of the “metastate” idea, see B. Davies (2015). Resistance to European Law and Constitutional Identity in Germany: Herbert Kraus and Solange in its Intellectual Context. European Law Journal, 21(4), 434–59. Ibid, 442. W. Wengler (1968). Aus Wissenschaft Und Praxis: Grundrechtsminimum Und Equivalenz Der Grundrechtsschutzsysteme. Juristen-Zeitung 10, p. 27. Rupp (1970). Die Grundrechte Und Das Europäische Gemeinschaftsrecht. Neue Juristische Wochenschrift 23, 353–59, esp. p. 353. Ibid, 354.

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only a regime without a master, the use of power without a democratic sovereign, but also a regime without fundamental rights”.78 It was precisely at this point that the FAC began considering the validity of the European Regulations and their relationship to the German constitution, and it must have seemed to the judges at the FAC that the tide was flowing in one direction by the time that the Internationale case appeared on the docket. While the ECJ had been reenergized by new appointments in a post–de Gaulle Europe, the German context had taken a much more critical stance. This fundamental disconnect brought two of Europe’s highest courts into potential conflict.

growing up together: the bverfg and ecj as legal siblings Given the esteemed nature of the two panels, it is easy to forget that both the BVerfG and ECJ are relatively new institutions. In fact, they are almost the same age, with the BVerfG being instituted in 1951 and the ECJ in 1952. By the time of the Internationale dispute in the early 1970s, both Courts were just emerging from their teenage years. More than just an anthropomorphic metaphor, this observation gives a real sense of two courts coming to terms with their own roles, cultures and purposes, both domestically and in relation to each other. While the developments in the ECJ in 1967 led to a change in that court’s outlook during this period, we also notice that the BVerfG was responsive to a growing consciousness in the German legal community that compared and differentiated German national law from the perceived weaknesses of the European legal order.79 The critical juncture was the late 1960s, after both the BVerfG had recognized the European order as an autonomous legal system over which it had no jurisdiction, and issues of rights protection and democratic participation came to the forefront during the protest movements. The year 1968 was both the year of protest and the year of human rights.80 The turmoil and generational shifts that took place across Europe and Germany brought with it a good deal of critical soul-searching about the nature and quality of Western democracy. The core identity of the national constitutional order was contested as well as redefined and reconfirmed domestically. 78 79

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Author’s own translation. Ibid, 354. For a discussion of the public and intellectual discourse of this period, see B. Davies (2012), chapters 2–3. As designated by the UN General Assembly: www.un.org/en/ga/search/view_doc.asp?symbol= A/RES/2081%20%28XX%29

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Unsurprisingly, a concurrent process took place in which that same core identity was also formulated in comparison with Europe – and here Europe was repeatedly found to come up short both in intellectual circles and public opinion. The “permissive consensus” was coming to an early end. Even while the constitutionalists continued their defense of European law,81 critics attacked the weakness of rights protection at the European level, and called for a directly elected parliament to control any excesses of executive power and to maintain the Communities’ structural congruence with the Federal Republic.82 Even former ECJ Judge Otto Riese agreed that the protection of fundamental rights in Europe was comparatively weak against Germany’s own safeguards.83 All of this echoed Kraus’s position already outlined since the 1950s. Clearly opinion within the German legal consciousness was coalescing ever more around the structural congruence theory. Yet even if Rupp, Wengler and the judges of the FAC were convinced that structural congruence was necessary, why did the BVerfG also ultimately side with them and reject the ECJ’s Internationale doctrine? There are a number of reasons, but primarily these can be framed within a relationship between two courts – German and European – that were developing and positioning themselves vis-à-vis each other as similarly aged siblings might do in a (European legal) family. Both courts were struggling to find their roles within their “own” systems as relatively new courts (both courts were “born” in the early 1950s), and now had to contend with the other wanting final say over an area of law as crucial and fundamental to the functioning of a supreme court as human rights protection. The crisis prompted in European judicial circles by the German rejection of the ECJ’s Internationale ruling during the 1970s was caused by two adolescent but maturing courts responding to entirely different contexts in the same case. While the ECJ was emboldened and buoyed by developments in Europe in the late 1960s, the BVerfG was moving towards a more critical approach of European governance informed by a lasting and 81

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H. von der Groeben (1966). Über das Problem der Grundrechte in der Europäischen Gemeinschaft. In E. von Caemmerer, H. Schlochauer and E. Steindorff (eds.), Probleme der europäischen Rechts, Festschrift für Walter Hallstein zu seinem 65. Geburtstag, Frankfurt am Main: Vittorio Klostermann, 226–47, esp. p. 232. E. Bülow (1965). Das Verhältnis des Rechts der europäischen Gemeinschaften zum nationalen Recht. In Aktuelle Fragen des europäischen Gemeinschaftsrechts, Gemeinschaftsrecht und nationales Recht Niederlassungsfreiheit und Rechtsangleichung, Europarechtliches Kolloqium 1964. Stuttgart: Ferdinand Enke Verlag, esp. p. 59. O. Riese (1966). Über den Rechtsschutz von Privatpersonen und Unternehmen in der Europäischen Wirtschaftsgemeinschaft. In E. von Caemmerer, H. Schlochauer and E. Steindorff (eds.), Probleme der europäischen Rechts, Festschrift für Walter Hallstein zu seinem 65. Geburtstag, Frankfurt am Main: Vittorio Klostermann, 414–30, esp. p. 420.

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bitter debate in German legal academic circles. This is a story of two independent but interwoven tales converging in one case. At least in the case of the BVerfG, fundamental rights protection had become its raison d’etre since its seminal Lüth ruling of 1958.84 If pursuing “ever closer union” had become a key part of the ECJ’s identity, then equally safeguarding the national constitutional rights catalogue was the BVerfG’s equivalent. Control over rights protection was never going to be something the BVerfG gave up lightly. The ECJ’s encroachment on this area was a particularly sensitive moment for a national court which was using fundamental rights as a lever to make itself domestically relevant. Yet, when we look at the nature of Solange ruling, it was by no means a total hand-off by the German court. In fact, like many rulings it made in this period, the judgment was admonitory, not final. If standards of rights protection were to change at the European level, the BVerfG would be willing to cede control. If more structural congruence could be eked out between the German and European orders, then the issue would be resolved from Karlsruhe’s perspective. When the ECJ took steps to make this happen in its own jurisprudence, the BVerfG ultimately held to this promise. Whilst it might be easy to criticize the national court from a certain perspective, this was to be sure constructive critique with room and space for the European institutions to make changes or improvements. Given the power and influence of the BVerfG, this was breathing space of which the European institutions made use. Certainly, if this was a case of making “Europe” look more “German”, as the structural congruence position might entail, then in this particular area of law, all of Europe benefitted.

conclusion This chapter has broken from previous examinations of the Internationale ruling by employing a historical method and drawing on national, European and private archive sources, as well as academic and judicial discourse of the period. By focusing on contextualization and the retelling of the motivations of the agents involved in this case, we can portray the ECJ’s Internationale ruling as an understandable miscalculation of a court buoyed by political developments in Europe, the lack of negative reaction to its 1963–64 jurisprudence and by the influx of a new generation of self-confident, federalistleaning judges. Here, in particular, Pierre Pescatore’s charismatic and strategic vision for the Court played a particularly important role both generally and in 84

BVerfGE 7, 198 I. Senate, (1 BvR 400/51), 15 January 1958.

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the specific treating of the Internationale ruling. The ECJ had likely expected to find Germany’s judicial elite to be integration-friendly as well as ready and willing to accept the ECJ’s supremacy doctrine as it built on the existing doctrines of Costa and Stauder. The information coming out of Germany, however, was misleading. The FAC was both informed and inspired by a critical domestic discourse that the ECJ and Commission were aware of but incorrectly assumed was on the wane. Instead, structural congruence had won the day. Hallstein even bitterly admitted this in 1975.85 Internationale reveals the extremely difficult position that the ECJ finds itself in as a court of a disparate and oftentimes fractious Union. It must balance the difficult tasks of finding the right legal answer in the case before it whilst also keeping in mind the strategic calculation of what is and what might not be acceptable to the very powerful national judiciaries, on whose cooperation the ECJ relies. With hindsight, there is little doubt in the author’s mind that the ECJ certainly made an appropriate judgment in the case before it, but perhaps it would have been more strategically sound to have not made the pronouncements on national constitutional law and fundamental rights protection in a referral from that particular lower national court at that particular time. The ECJ may, for instance, had it been more connected to the currents in the German legal academy, have chosen to simply answer the two questions posed directly by FAC in its referral. Neither of these dealt specifically with the rights question. Instead, Pescatore as reporting judge was clearly chomping at the bit to go further on the rights issue than had been possible in Stauder the year before. Pescatore’s own writings between the Stauder and Internationale rulings prove this. And so the ECJ chose to freely to engage with the FAC’s reasoning in the referral beyond the direct questions asked and expand on its constitutionalization doctrine. It seems a strategic miscalculation on the part of the Court. The miscalculation prompted significant resistance in the Member States and within a few years forced the Court to articulate much more clearly in Hauer just how inspired it was by the constitutional traditions of the Member States and the rights agreements to which it had become a party.

acknowledgements I would like to thank Fernanda Nicola, Rachna Kapur, Chana Barron, Morten Rasmussen, Gabriela Reyes Ventura and Hillary Mellinger for the generous comments and editing help on this draft. Despite their best efforts, any errors remain my own. 85

See B Davies (2015), p. 456.

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10 Personal Conviction and Strategic Litigation in Wijsenbeek john morijn

introduction “Ik wuif er hoogstens mee!” That is what Florus Ariël Wijsenbeek, a Dutch Member of European Parliament (MEP), replied on 17 December 1993 when asked by a Dutch border officer to show his passport to establish his identity after arriving on a flight from Strasbourg to Rotterdam. “At the very most I will wave it at you!” By refusing to show his passport, Mr. Wijsenbeek deliberately violated the Dutch Aliens Order, incurring a fine of 65 guilders (about 30 euros). When he refused to pay, the public prosecutor initiated criminal proceedings against him. Six years after Mr. Wijsenbeek’s simple act of defiance, the European Court of Justice (ECJ) ruled1 in what is widely viewed as a “classic” case about the (lack of) direct effect of what are now articles 21 and 26 Treaty on the Functioning of the European Union (TFEU)2; the legal implications of the concept of Community/Union citizenship3; and the transition from an area without internal frontiers to an area of freedom, security and justice.4 1

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Case C-378/97, Criminal proceedings against Florus Ariël Wijsenbeek [1999] ECR I-6207. For the most relevant case notes, see: D. Martin, Comment on Florus Ariël Wijsenbeek and Arblade, (2000) (2) European Journal of Migration and Law 101–07; Jeremy Evans, (14) (1999–2000) Georgetown Immigration Law Journal 255–56. On this aspect, see Paul Craig, Gráinne de Búrca, EU Law – Texts, Cases and Materials, Oxford University Press: Oxford, fifth edition, 2011, at 589; Catherine Barnard, The Substantive Law of the EU – The Four Freedoms, Oxford University Press: Oxford, fourth edition, 2013, at 11; Alan Dashwood (e.a.), European Union Law, Hart Publishing: Oxford, sixth edition, 2011, at 246; George A. Bermann, Roger J. Goebel, William J. Davey and Eleanor M. Fox, Cases and Material on European Union Law, West Publishing, third edition, 2011, at 637–38. On this aspect, see Francis G. Jacobs, Citizenship of the European Union – A Legal Analysis, (2007) 13(5) European Law Journal 591–610, at 606–07. On this aspect, see, for example Vassilis Hatzopoulos, With or without you . . . judging politically in the field of the Area of Freedom, Security and Justice, (2008) (33(1)) European

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Based on access to Mr. Wijsenbeek’s personal files and interviews with him, national and European court documents unavailable to the public, as well as Dutch newspaper articles, this chapter aims to contextualize Mr. Wijsenbeek’s legal saga and provide a fuller picture of the case. By examining various previously unreported new elements to the story, we will be able to view Wijsenbeek in a different light. The story of Wijsenbeek centers on a driven, integrationist-minded MEP cooperating with other MEPs to go to great practical lengths to force a court case only to find the national referring judge rewarding him with any lawyer’s Holy Grail: a carte blanche to draft the questions for a preliminary ruling inviting the ECJ to turn a case of principle concerning the very nature of the Community’s ‘area without internal frontiers’ into a standard ruling. In that way Wijsenbeek and its ‘making of’ offer a rare occasion to examine how strategic litigation, irrespective of the motives, ultimately hinges on an effective litigation strategy.

background and context Why did Mr. Wijsenbeek force a case? Why were policy-making avenues blocked, or moving too slowly in his view, leading to the need for a strategic effort to achieve his political objectives in court? And in what way is it relevant for truly appreciating the full implications of the case that it was initiated in December 1993 (one month after the Maastricht Treaty’s entry into force) and decided in September 1999 (only four months after the entry into force of the Amsterdam Treaty)? To provide background information critical to understanding Mr. Wijsenbeek’s motives, this section describes the legal, judicial and policy context surrounding his legal saga; distinguishes crucial developments pre-Maastricht Treaty, Maastricht Treaty-period and post-Treaty of Amsterdam, within and outside the (E)EC/EU setting; and examines the gap between the slow-paced policy debates among the Member States and the speedier judicial developments in Luxembourg. This will provide a framework in which to discuss the legal proceedings initiated by Mr. Wijsenbeek and to critically assess his approach.

Law Review 44–65, at 46 (“. . . the Court established a clear connection between the first and third pillars of the EU Treaty . . . in tandem, it set the conditions for the parallel interpretation of the rules of the two pillars . . . furthermore, the creation of the Area of Freedom, Security and Justice ceased being a mere political choice but also appeared as a legal necessity.”)

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Pre-Maastricht Policy Arena – Developments within the (E)EC The furtherance of the free movement of persons through the elimination of border controls at the internal borders is a policy aim that pre-dates Wijsenbeek. It is an issue that has resurfaced in a variety of ways over the years and created considerable tensions between Member States, cooperating inside and outside the Community context, and Community institutions. Reference to free movement of persons dates back to the original Rome Treaty. Article 3 (c) of the Rome Treaty provided that the activities of the Community shall include . . . in accordance with the timetable set out [in the Treaty] an internal market characterized by the abolition, as between Member States, of obstacles to the free movement of . . . persons.

While Article 8 introduced an ambitious twelve-year transitional period to achieve this policy objective, early secondary legislation such as Directive 68/3605 and Directive 73/1486 sought to flesh out the Rome Treaty’s barebones statements. For instance, Article 3(1) of both Directives required Member States to admit to their territory those persons to whom the directives applied, merely upon presentation of a valid identity card or passport. In the mid-1970s, the European Commission (Commission) and the European Council7 proposed further steps to abolishing internal border controls. When the European Council of 9 and 10 December 1974 tabled plans to create a passport union, the Commission issued a report8 on 3 July 1975 describing the total abolition of passport control within the Community as a sine qua non for attaining that objective.9 The Commission therefore clearly believed that, apart from a symbolic function, the European passport union plan should also hold some practical value. The 1975 Tindemans report to the

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Council Directive 68/360/EEC of 15 October 1968 on the abolition of restrictions on movement and residence within the Community for workers of Member States and their families, Official Journal, English Special Edition 1968 (II), p. 485. Council Directive 73/148/EEC of 21 May 1973 on the abolition of restrictions on movement and residence within the Community for nationals of Member States with regard to establishment and the provision of services, [1973] O.J., p. 14. Note that in 1974 the European Council was not yet an EU institution, but a meeting of heads of states and governments taking place outside of the EEC context. European Commission, Towards European Citizenship – Implementation of point 10 of the final communiqué issued at the European Summit held in Paris on 9 and 10 December 1974 – A Passport Union, COM (75) 322, 3 July 1975. The report stated: ‘It is thus clear that the abolition of passport control within the Community means the abolition of passport control at Community internal frontiers’ (point 2.3.1, p. 11).

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European Council,10 in which the Belgian prime minister laid down his views on the various implications of using the term ‘European Union’, used similar wording with regard to the internal borders. It argued for the ‘gradual disappearance of frontier controls on persons moving between member countries, as a corollary of a passport union’.11 These developments in the 1970s resulted in a Commission draft resolution of 9 July 1982 on the easing of the formalities relating to checks on citizens of Member States at the Community’s internal frontiers.12 Article 2(b) of the resolution provided that by 31 December 1984, the Member States would undertake ‘to consider that, in principle, proof of citizenship of a Member State may be supplied either by presenting a uniform passport, given that its standard external format will immediately identify the holder as citizen of a Member State, or by presenting an identity card’.13 The idea, to be more precise, was that only a closed passport with a recognizable format would have to be presented when crossing a border. Unsurprisingly, this idea drew a lot of fire, including criticism centred on its implications for security and crime prevention in the EU. This critique resulted in the elimination of this particular provision by the Council of Ministers when it finally adopted a resolution by June 1984.14 Yet, the policy idea of removing all internal border controls remained on the agenda. One month later, the European Council of 26 July 1984 stressed the importance of the removal of all police and customs formalities at the intraCommunity borders. The ad hoc committee set up to propose practical measures to this effect, known by the name of its president, Mr. Adonnino, presented its report in March 1985. Among the committee’s proposals was a specially designed sticker – a white “E” against a green background – to be attached to cars. The idea was that border officers could in this way recognize EC citizens crossing an internal border so that they would not have to stop every single car. Indeed, precedent existed at the time for this practice. As part of a wider cooperation effort, France and Germany already relied on this practice.15 10

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‘European Union’, Report by Mr. Leo Tindemans, Prime Minister of Belgium, to the European Council, 29 December 1975, Bulletin of the European Communities, Supplement 1/76. Ibid, p. 27. Draft Council resolution on the easing of the formalities relating to checks on citizens of Member States at the Community’s internal frontiers, OJ 1982 C 197/6. Emphases added. Council Resolution on the establishment of a Passport Union, [1984] O.J. C 159/1. In the city of Saarbrücken, France and Germany had taken the symbolic initiative – intended as a gesture to make some progress with the creation of a citizens’ Europe – to relax the checks at the common French-German border, in particular for car drivers having a green sticker on

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Furthermore, the committee proposed a measure that, while revolutionary at the time, is now commonplace – physically separating EC and non-EC citizens in European (air)ports.16 Months later the Commission’s famous 1985 White Paper17 also referred to the issue of border controls at the EEC internal borders. After having characterized controls at internal borders as a ‘constant and concrete reminder to the ordinary citizen of the incompleteness of the Community’ and an ‘outward sign of an arbitrary administrative power over individuals’, the Commission announced it would propose measures by 1988 to eliminate border controls between Member States.18 The Single European Act, which entered into force on 1 July 1987, contained two legislative innovations: Article 8A EC and Article 100A EC. The first article provided that ‘the Community shall adopt measures with the aim of progressively establishing the internal market over a period expiring on 31 December 1992’. However, the provision also went on to state that the adoption of such measures should be done ‘in accordance with the provisions of . . . Article 100A’. That clause stated that the general powers of the Community to pass directives aimed at the establishment or functioning of the common market could not be used for provisions relating to free movement of persons. As announced in its White Paper, the Commission in December 1988 published a Communication on the abolition of controls of persons at intraCommunity borders. This document19 illustrates well the paradox of the treaty text’s deadline of ‘31 December 1992’.20 While the EEC would need to establish an area without internal frontiers by that date, it lacked the competences to implement the necessary ‘flanking measures’21 to bring about these changes in a prudent and balanced fashion. Instead, the document listed a

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their car as evidence of being EC citizens; See J. J. E. Schutte, Schengen: Its Meaning for the Free Movement of Persons in Europe (1991) 28 Common Market Law Review 549–70, at 549. ‘L’Europe des citoyens – Rapports du comité ad hoc’, Bulletin des Communautés européennes, Supplément 7/85, at 10. COM(85)310 final, Completing the Internal Market – White Paper from the Commission to the European Council, 14 June 1985. 19 COM(85)310, par. 47–54. COM(88) 640 final, 7 December 1988. The legal value of the date in the Treaty led to some debate in legal literature; A. G. Toth, The Legal Status of the Declarations Annexed to the Single European Act (1986) (23) Common Market Law Review 803–12; H. G. Schermers, The Effect of the Date 31 December 1992 (1991) (28) Common Market Law Review 275–89. Measures put in place to compensate for abolishing checks on persons at internal borders, such as a common security arrangements at the external borders and a more coordinated approach to police and justice cooperation within the European Community.

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wide variety of fora22 in which these ‘flanking measures’, such as tighter police and justice cooperation, were being developed outside the EEC. A list of similar measures describing what was still needed to hit the deadline of 31 December 1992 that was submitted to the European Council of Madrid in June 1989, the so-called Palma-document, once again divided the work over these intergovernmental fora, in this way bypassing the Commission (and, of course, by implication also the European Parliament (EP)).

Pre-Maastricht Political Arena – Developments Outside the (E)EC Meanwhile, the aforementioned Franco-German agreement formed the basis for the Schengen Agreement on the gradual abolition of border control of 14 June 1985, in which the Benelux countries also participated.23 Developed outside the context of the EEC by a select group of EC Member States, the Schengen Agreement sought to create a common territory without internal border controls. The Schengen Agreement’s logic was simple: abolish all internal border controls and transfer them to a common external frontier. To achieve this policy aim, the participating states would, in advance, attempt to harmonize border formalities and establish complementary measures to safeguard security and control migration. Initially, the participating States set 1 January 1990 as the deadline. However, they only concluded the Schengen Implementing Convention on 19 June 1990. Consistent with the policy aim of abolishing internal border controls, Article 2 established the principle that internal borders may be crossed without checks on persons. By way of derogation, however, the agreement also provided that border checks could be carried out for a limited period for public policy or national security reasons.24 The Agreement and its Implementing Convention eventually entered into force in March 1995. Under its terms, the external boundaries of the Schengen area remained the only place left to carry out border controls on persons, though airports and seaports were still treated as external frontiers.

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To name but a few: the TREVI-group discussed subjects connected with police, security and terrorism, the ad hoc Immigration group was called upon to deal with asylum, controls at the external borders and visa matters. Other fora included CELAD (Coopération Européenne pour la Lutte Anti-Drogue) dealing with narcotic drugs and a group called Coopération Judiciaire, occupied with judicial cooperation. The Benelux countries already had a system of ‘open internal borders’ since 1960 amongst themselves. See L. D. H. Hamer, Free movement of persons – An exploration from a Dutch perspective (1989) Legal Issues of European Integration 49–59, at 51. J. Handoll, Free movement of persons in the EU, Chancery Law Publishing, London, 1995, at 430.

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The Schengen instrument, with its five Member States, did not go unnoticed by the Community and its institutions. At its most basic level, the instrument shared the same objectives as article 8a EEC/7a EC.25 At the time, the Commission stressed these similarities, viewing the initiatives as “a testingground for the Community, from the standpoint of completion of the internal market, and as a driving force for those Member States which are not signatories of the Schengen Agreements”.26 The Commission also stated that “the substance of the solutions that have emerged also provides a source of inspiration – and even, in some cases, a blueprint – for work by the Twelve”.27 As a testing ground, the Schengen cooperation provided clear evidence that the policy logic and the political realities moved at vastly different speeds.

Pre-Maastricht Judicial Arena As political efforts aimed at integration unfolded in political arenas elsewhere, the ECJ applied the logic of European integration when ruling on several key cases related to the issue of internal border controls. Removed from the heated and partisan policy discussions in Brussels and Strasbourg, the Court established fairly clear parameters in the 1980s and early 1990s on the abolition of restrictions on movement of persons based on the principles of free movement and non-discrimination.28 In Regina v. Pieck,29 the Court clarified that the restriction on grounds of public policy, public security and public health must not be regarded as imposing a condition precedent to the acquisition of the right of entry; rather, the restriction would be permissible in individual cases where there is sufficient justification to impose restrictions on the exercise of that right. In Commission v. Belgium,30 the Court 25

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This awareness also worked the other way around. The Schengen Implementing Convention contained provisions about its relationship with Community law. Article 134 provided that provisions of the Implementing Convention could only apply in so far as compatible with Community law. Furthermore, following article 142 provisions of the Implementing Convention would be changed in case the Twelve came to an agreement about the establishment of the internal market within the Community framework. See David O’Keeffe, The Free Movement of Persons and the Single Market, (1992) European Law Review 3–19, at 12. See Commission Answer to WPQ 3044/90 (OJ 1991 C 214/12) and Commission Answer to WPQ 43/89 (OJ 1990 C 90/11). 28 29 Ibid. See O’Keeffe, above n. 20. Case 157/79, Regina v. Pieck, [1980] ECR 2171. Case 321/87, Commission v. Belgium [1989] ECR 997. In this case the Commission accused Belgium of subjecting nationals of other Member States residing in Belgian territory to certain non-systematic controls at the frontier, in particular requiring them to produce a residence or establishment permit apart from their passport. The Commission maintained this to be in violations of Directives 68/360 and 73/148, mentioned above.

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held that carrying out controls upon entry into the territory of a Member State may, depending on the circumstances, constitute a barrier to the free movement of persons. In particular, this would be the case if it were found that the controls were carried out in a systematic, arbitrary or unnecessarily restrictive manner. In the 1991 case Commission v. The Netherlands,31 the ECJ introduced a further limitation on border controls. Asked about the compatibility of national legislation by virtue of which citizens may be required to answer questions regarding the purpose and duration of their journey and the financial means at their disposal before being allowed to enter a territory, the Court stated that requiring the production of a valid identity document or passport is the only pre-condition a Member State is allowed to impose.32

Maastricht Treaty Period: Continuing a Two-Track Approach The Treaty on European Union (TEU), which entered into force on 4 November 1993, introduced a ‘Third Pillar’ of the European Union provisions for cooperation in the field of Justice and Home Affairs. These provisions, listed in Article K.1 EU, paragraph 1 to 6, were principally intended to facilitate the adoption of the flanking measures needed for a more complete set of regulations on the free movement of persons. The Third Pillar provided for a mainly intergovernmental form of cooperation. The mainly political nature of the cooperation was underlined by the fact that the ECJ was completely sidelined ex Article L EU. The TEU also introduced another provision important for our analysis. Article 8A EC (now 21(1) TFEU) established the right to free movement as one of the core elements of the Citizenship of the Union: 1. Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect. 2. The Council may adopt provisions with a view to facilitating the exercise of the rights referred to in paragraph 1; save as otherwise provided in this Treaty, the Council shall act unanimously on a proposal from the Commission and after obtaining the assent of the European Parliament.

31

Case 68/89, Commission v. The Netherlands, [1991] ECR I-2637.

32

Ibid, points 15–16.

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On 18 November 1993, eleven months after the passing of the Single European Act’s December 1992 deadline, two weeks after the entry into force of the Maastricht Treaty, and several weeks before Mr. Wijsenbeek was arrested at Rotterdam airport, the EP sued the Commission for failure to act. In the EP’s view, the Commission should have come up with proposals to regulate the crossing of external borders and to institute the abolition of controls on persons crossing the intra-Community borders. The EP maintained that the Commission should not have allowed the Member States to step outside the framework of the EEC Treaty by means of the Schengen cooperation in which they effectively agreed on subject matters that should be dealt with within the Community context exclusively.33 On 24 August 1995, the Commission responded by issuing three proposals for directives related to the free movement of persons.34 This package came to be known by the name of the Commissioner proposing it, Mr. Monti. The three proposals did not lead to any result, even if the Council of Ministers considered them on the basis of the competences laid down in the new Maastricht Treaty. The reason was that unanimity was still required. The United Kingdom, which maintained that the abolition of border controls should only concern EU citizens, caused this deadlock. Such a construction, however, implies that one would still have to control everybody crossing the border, simply because one could only establish whether somebody is an EU citizen by examining his or her passport.35 Another contribution to the deadlock was that many policy-makers believed the abolition of control at internal borders should actually go hand in hand with adopting common rules for control at the external borders and the creation of an immigration and asylum policy, for which the Community was not thought to have clear competencies, even in the Maastricht Treaty.36 Article K.9 EU, the so-called ‘passerelle’ provision that offered the possibility to communitarize the flanking measures listed in Article K.1, paragraph 1 up to 6 EU has never been used. 33 34

35

36

Case C-445/93, [1994] O.J. C 1/22 COM(95)346, COM(95)347 and COM(95)348, respectively proposals for Council directives on the right of third-country nationals to travel in the Community, on the elimination of controls on persons crossing internal frontiers and amending the abovementioned Directive 68/360/EEC and 73/148/EEC, 24 August 1995. An important background issue for the United Kingdom’s position was a long-standing dispute with Spain over Gibraltar. This also led to the blockage of related issues such as an External Frontiers Convention as was proposed by the Commission (COM(93) 684 final, Commission proposal for a decision, based on Article K.3 of the TEU establishing the Convention on the crossing of the external frontiers of the Member States, 10 December 1993). G. Papagianni, La circulation des citoyens de l’Union: de Maastricht à Amsterdam et au-delà (1999) Actualités du Droit 625–65, at 646.

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The only practical result of the “Monti-package,” therefore, was that the EP’s case was scratched from the docket by the ECJ on 11 July 1996. After all, the Commission had repaired its inactivity. For all other practical purposes it was back to square one within the Community. Despite considerable effort, the set of measures laid down in the Treaties turned out to not be sufficient to simultaneously formulate measures to abolish internal border controls and flanking measures. Amsterdam Treaty Period: Integrating Schengen into the Treaties Shortly after this, in May 1997, the then fifteen Member States reached agreement about the Treaty of Amsterdam. This integrated the Schengen Agreement and Schengen Implementing Convention into the EC Treaty.37 The move effectively resulted in the application of the Schengen acquis38 in thirteen Member States, as the United Kingdom and Ireland decided to opt out. Title IV of the Amsterdam version of the Treaty on European Community (TEC), titled ‘Visa, asylum, immigration and other policies related to free movement of persons’, promised progressively to establish an area of freedom, security and justice. Article 62(1) provided that within a period of five years measures would be taken ‘with a view to ensuring, in compliance with Article 14, the absence of any controls on persons, be they citizens of the Union or nationals of third countries, when crossing internal borders’. However, visible traces of intergovernmental decision-making remained. Article 67(1) required that the Commission share its right to initiative with Member States during the first five years. Moreover, Article 68(2) provided that ‘in any event, the Court of Justice shall not have jurisdiction to rule on any measure or decision taken pursuant to Article 62(1) relating to the maintenance of law and order and the safeguarding of internal security’. Yet it was clear that everything was in place for the Council of Ministers finally to act decisively in implementing a comprehensive free movement of persons agenda.

the making of wijsenbeek: a behind-the-scenes account Let us go back to January 1993. The Single European Act deadline of 31 December 1992 had just passed. Many integrationist policy-makers and politicians were furious about what, in their view, amounted to decades of 37

38

[1997] O.J. C 340/93, Treaty of Amsterdam, Protocol integrating the Schengen acquis into the framework of the European Union. [2000] O.J. L 239, The Schengen acquis.

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political foot-dragging and partial delivery on policy commitments laid down in the Treaty texts. Adding insult to injury, the most noteworthy advancements in the realms of free movement of persons and the abolition of internal border controls were taking place outside of the Community, sidelining both the EP and the Commission. Why was it proving so difficult to follow through on these issues politically when the ECJ had shown itself to be quite capable of generating a body of law in the very same area, all while applying general integrationist interpretational principles to the law? Florus Ariël Wijsenbeek (born 1944) was one of the integrationist-minded European parliamentarians deeply frustrated by the state of affairs. Trained in political science and law at Leiden and Harvard, Mr. Wijsenbeek entered politics straight out of university. From 1970 to 1971, he served as the political adviser to H. J. de Koster, the then-junior minister of foreign affairs in the Dutch government. After a brief spell at the Commission Legal Service (1971–1972), he served as spokesperson for the EP’s Liberal Political Group (1972–1973). From 1973 to 1975, he acted as chef de cabinet of the EP President, C. Berkhouwer, one of the more powerful political appointee positions in the Parliament’s administration. After serving as a founding Secretary-General of the European Liberal Party (ELDR) (1976–1982) and completing another brief spell as a legal adviser (this time for the EP’s Liberal Political Group), Mr. Wijsenbeek became an MEP on 24 July 1984. He served three five-year terms, focusing primarily on issues related to parliamentary immunities, legal affairs and citizens’ rights as well as transport and tourism, before returning to the Netherlands in 1999 after almost thirty years of service inside the EP.39 Mr. Wijsenbeek’s view and personal conviction was fiercely and unapologetically pro-European and federalist. When a new liberal political leader, Frits Bolkestein, emerged in Dutch politics in the early 1990s with a position that was markedly more critical of European integration, Mr. Wijsenbeek refused to change tack. Asked about his views on the new party line, he reportedly declared: “You can hardly expect me to state that I have been wrong the last 20 years.”40 In addition to being an unabashed integrationist, Mr. Wijsenbeek was also known for his mildly contrarian manner – something that, as we will see shortly, is crucial to how he managed to bring his case all the way up to Luxembourg. For instance, when the new Brussels EP building

39

40

His profile can be found here: www.europarl.europa.eu/meps/en/1450/FLORUS+A._ WIJSENBEEK_home.html. Hendrik Spiering, Rob Meines and Derk Jan Eppink, “Euroliberalen op ijs gelegd” (Euroliberals put on ice), NRC (Dutch national newspaper), 15 June 1992.

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opened, Mr. Wijsenbeek regularly went cycling within its massive premises, storing his foldable bicycle in the shower of his private office.41 Even after receiving an official reprimand from one of the EP’s Quaestors,42 Richard Balfe, Mr. Wijsenbeek refused to budge, flatly denying that his behaviour would bring the office of an MEP into disrepute or cause any danger.43 But there was also a deeper political message to Mr. Wijsenbeek’s comically hardheaded behaviour. It effectively served to protest against the cost of installing private shower facilities in Brussels, which was ordered by the Quaestor to replicate the situation with the Strasbourg EP premises and caused controversy in the Dutch media.44 While these sort of fraternity-like antics earned Mr. Wijsenbeek a following in some quarters,45 they also reportedly led the political leadership of the Dutch liberal party to view Mr. Wijsenbeek as somewhat of a loose cannon and a political liability.46 In any event, it may be precisely Mr. Wijsenbeek’s unique combination of integrationist personal conviction and lightly contrarian persistence that led to Wijsenbeek. In the following section, we describe Mr. Wijsenbeek’s case from its inception in the Rotterdam criminal court of first instance to its arrival in the Court in Luxembourg. A Fuller Account of the Facts and Judicial Proceedings in Rotterdam and Luxembourg The facts as conventionally reported are the following: On 17 December 1993, Mr. Wijsenbeek, “a Dutch national”, took “a regularly” scheduled flight from Strasbourg to Rotterdam. At that time, Rotterdam airport was used exclusively for flights to and from other Member States. While all travellers were asked for their passports upon arrival in Rotterdam, Mr. Wijsenbeek refused to show his 41

42

43

44

45

46

Ben van der Velden, “‘Het Bureau’ bestelde douches à 28.400 gulden” (“The Bureau” [the EP governing body] ordered 28.400 Dutch guilder showers), NRC (Dutch national newspaper), 26 November 1997. The College of Quaestors is the European Parliaments body responsible for administrative and financial matters directly concerning Members and their working conditions. Ben van der Velden, “Verwijdering van filmploegen schokt Europarlement” (Removal of camera crews shocks European Parliament), NRC (Dutch national newspaper), 4 December 1997. Ben van der Velden, “‘Het Bureau’ bestelde douches à 28.400 gulden” (“The Bureau” [the EP governing body] ordered 28.400 Dutch guilder showers), NRC (Dutch national newspaper), 26 November 1997. Derk Jan Eppink, “Blazergehalte bij liberalen moet omlaag “(“Suit-and-tie” density should decrease at the Liberals), NRC (Dutch national newspaper), 30 November 1992. Derk-Jan Eppink, “Sluimerende ruzie in VVD over Europa” (Lingering disagreement about Europe within the liberal party), NRC (Dutch national newspaper), 27 March 1992.

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passport to the border control officer. However, he did give his name, place and date of birth and address, and, as evidence of these facts, showed the border control officer his Belgian driver’s license. When the border control officer refused to accept this information as a valid means of identification, Mr. Wijsenbeek was charged with violating the Dutch Aliens Order, incurring a 30 euro fine. To challenge this fine in court, Mr. Wijsenbeek hired “a lawyer”. However, the conventional narrative paints a rather one-sided picture of what really happened, both before and after Mr. Wijsenbeek’s showdown with the Dutch border control officer. Through national court documents, Dutch newspaper articles and interviews with Mr. Wijsenbeek, we are able to see, for the first time, the other side of the Wijsenbeek story. First, Mr. Wijsenbeek’s interaction with the border control officer on 17 December was most certainly not his first attempt at passing through Dutch customs while showing only a national identification card. In fact, since 1 January 1993, right after the 31 December 1992 deadline, Mr. Wijsenbeek consistently refused to show his passport at Rotterdam airport when flying to or from Strasbourg. He was not alone in his efforts; at least two other MEPs undertook similar attempts,47 but without “result”. To the increasing frustration of Mr. Wijsenbeek, however, the Rotterdam border officers regularly allowed him through customs, notwithstanding his consistent refusal to show his passport. Finally, Mr. Wijsenbeek met his match – a new border control officer unwilling to play along. Interestingly, Mr. Wijsenbeek continued this practice long after the Dutch court slapped him with the fine on 17 December 1993 (since, as we will see below, the Dutch judges initially refused to run with his arguments). A newspaper article even describes his deliberate refusal to show his passport well into 1995. It also reports how Mr. Wijsenbeek’s “monthly preaching” about how the Dutch Alien Act was violating Community law became a running joke among the Rotterdam airport security staff and often led to “comical situations and conversations”, in part because it was always done in a good-natured fashion.48 Secondly, the regular scheduled flight was not, in fact, so regular. Rather, it was a special EP charter flight carrying only MEPs and their personnel. Significantly, specific procedural rules relevant to such flights meant that a special identification regime applied. Under this special identification regime, MEPs only had to show an official EP identification badge. Of course,

47 48

Martin Sommer, “Don Florus”, Volkskrant (Dutch national newspaper), 18 March 1995. Martin Sommer, “Don Florus”, Volkskrant (Dutch national newspaper), 18 March 1995.

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Mr. Wijsenbeek dutifully avoided showing this badge to start with upon his arrival in Rotterdam as an MEP. In turn, the border control officer, as a fallback option, requested other means of identification. This is illustrative of how Mr. Wijsenbeek aimed to further a broader political agenda, all while acting in his personal capacity. Third, the fact that Mr. Wijsenbeek’s documents had already been checked upon departure in Strasbourg was stressed several times in the national proceedings – although this fact remained remarkably absent from the discussions at the Court in Wijsenbeek. Finally, Mr. Wijsenbeek’s lawyer throughout the course of his legal saga was not just any lawyer. Rather, Mr. Janssen van Raaij was himself an MEP and member of the EP Committee of Legal Affairs and Citizens’ Rights.49 In effect, it was repeatedly discussed within this very EP Committee whether to come to a joint effort to try and “get caught”. The then Committee chair would not have any of it, but could not, of course, prevent some of its members going ahead regardless. In any event, right from the outset Mr. Wijsenbeek’s lawyer was very much at the centre of his attempt to push the integrationist political agenda by forcing a court case. On 9 January 1995, Mr. Wijsenbeek appeared before the Rotterdam criminal court of first instance.50 He argued that Rotterdam airport could not be treated as an external frontier since it was only used for intra-Community flights. As part of his litigation strategy, moreover, Mr. Wijsenbeek asked the judge to refer his case to the ECJ for a preliminary ruling about the effect of article 14 EC and 18 EC. In doing so, he reasoned, the Court could deal with his case alongside the case the EP brought.51 However, the judge was not willing to play along. In his judgment of 8 May 1995, he condemned Mr. Wijsenbeek to pay the 30 euros fine. Not swayed by the result, Mr. Wijsenbeek appealed. The appeals case was initially scheduled for 14 June 1996. However, when the Commission issued its promising Monti package on 14 August 1995, Mr. Wijsenbeek’s lawyer sent a letter to the prosecutor on 24 May 1996 requesting to stay the proceedings. As noted above, the issuance of the Monti package also resulted in the withdrawal on 11 July 1996 of the case brought by the EP against the Commission for failure to act. Once it became apparent that the most recent round of Commission initiatives yet again reached a deadlock in the Council of Ministers on account of the United Kingdom’s position, Mr. Wijsenbeek’s 49

50

See: www.europarl.europa.eu/meps/en/1455/JAMES+L._JANSSEN+VAN+RAAY_home .html. 51 ‘Politierechter’ (i.e. literally: police judge). Case C-445/93, above.

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appeal was reactivated and rescheduled for 2 October 1997 – the day the Amsterdam Treaty was signed. In a 29 September 1997 letter to the prosecutor, Mr. Wijsenbeek’s lawyer took the unusual step of proposing the preliminary questions to be asked, virtually spelling them out word for word. Mr. Wijsenbeek finally got his wish when, in an intermediate ruling on 30 October 1997, the Court of Appeals halted the national proceedings and referred the following questions to the ECJ: Are the second paragraph of Article 7A EC, which provided that the internal market is to comprise an area without internal frontiers in which the free movement of persons is ensured, and Article 8A EC, which confers on all citizens of the Union the right to move and reside freely within the territory of the Member States, to be interpreted as precluding national legislation of a Member State, imposing an obligation, accompanied by criminal penalties for failure to comply, on persons (whether or not citizens of the European Union) to present a passport on entry into a Member State whenever that person enters the Member State through the national airport coming from another Member State? Does any other provision of Community law preclude such an obligation?

An essential point to note in the Wijsenbeek narrative is that the Dutch Court of Appeals’ preliminary questions to the Court mirrored how Mr. Wijsenbeek’s lawyer framed the questions in his 29 September 1997 letter to the prosecutor. The Court of Appeals’ wording, however, included a slight wrinkle. The Appeals Court added the wording “(whether or not citizens of the European Union)” in the first question. Paradoxically, this extra wording muddled the (political) purpose of the referral considerably. Rather than conveying the message of a case of principle based on the notion that this was about the fundamental value of free movement of persons within the Community, this nuance in wording immediately shifted the focus to the most vexing practical complexity in realizing the ideal Mr. Wijsenbeek was fighting for: How could or should EU citizens travelling within the Community be separated from non-EU citizens without a commonly agreed-upon policy to that effect? How could free movement be guaranteed without a form of control to verify whom to control in the first place? Interestingly, Mr. Wijsenbeek was not the first person (or politician) to attempt to bring a case based on an argument about the additional value of the newly included article 8A EC (citizenship) over and above the previously existing article 7A EC (internal market clause). A bit over eight months after the entry into force of the Maastricht Treaty, Northern Irish politician Gerard (Gerry) Adams tried his luck too, challenging a decision by UK authorities to

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refuse him entry. In particular, on 29 July 1994, the referring court, as far as relevant here, put forward the following questions:52 Does Article 8a(1) of the EC Treaty confer rights of free movement additional to those which existed under the EEC Treaty prior to its amendment by the Treaty on European Union? Does Article 8a(1) of the EC Treaty give rise to directly effective rights which citizens of the Union may invoke before national courts?

Compared to the wording of the Wijsenbeek referral, the questions in the Adams case were framed in more legally straightforward terms. However, the Adams case did not last long in the Court’s register, as it was removed on 5 May 1995. The circumstances leading to the removal of the Adams case can be traced back to the UK government lifting its exclusion order against Mr. Adams on 21 October 1994. Although Mr. Adams attempted to sustain the case, the referring court withdrew its questions as the issue became academic. Mr. Adams’s attempts to bring his case to the European Commission of Human Rights (ECHR) (the predecessor of the European Court of Human Rights) also failed when the ECHR declared his case inadmissible in January 1997.53 Within the ECJ, Wijsenbeek was referred to the Full Court, a sign of the political importance of the case. The hearing took place on 12 January 1999, some four months before the entry into force of the Amsterdam Treaty. Mr. Wijsenbeek argued that his “spontaneous” refusal to show his passport was to be appreciated in the light of the deadline by which the Member States should have established the internal market: 31 December 1992.54 He made his case in internal market terms: If goods can cross borders without control, why should the same not apply to persons?55 And since the Court considers every tourist as a potential enjoyer of services in the Member State of visit, why should it not view everyone crossing an internal border as a potential consumer?56 To this effect, Mr. Wijsenbeek argued that both article 7A and 8A EC had direct effect. However, Mr. Wijsenbeek was very much alone in his argument before the Court, since none of the other participants in the hearing shared his sweeping

52

53

54

OJ C 275/18, 1 October 1994, Case C-229/94 (Reference for a preliminary ruling by the Divisional Court, Queen’s Bench Division, by order of that court of 29 July 1994, in the case of The Queen against the Secretary of State for the Home Department, ex parte: Gerard Adams). European Commission of Human Rights, Application Nos. 28979/95 and 30343/96, Gerard Adams and Tony Benn against the United Kingdom, 13 January 1997. 55 56 Report of the Hearing, par. 23. Ibid. Report of the Hearing, par. 41.

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interpretation of articles 7A and 8A, including the Commission and the Dutch, Spanish, Finnish, Irish and British governments. With regard to article 7A, the majority of the other participants pointed out that abolishing border controls could only be effectuated upon implementation of sufficient “flanking measures”, such as a common policy on external borders, immigration and asylum issues.57 The Irish government in particular vehemently opposed the notion of direct effect of article 7A,58 asserting that such an interpretation carried significant legal, political and security implications in light of the discussions leading up to the entry into force of the Amsterdam Treaty, where it, alongside the United Kingdom, had negotiated an opt-out.59 With regard to article 8A, the Commission argued in favour of its direct effect.60 It viewed the right as an autonomous substantive right, exceptions to which should be construed narrowly, but also conceded that, as the law stood, passport checks would not be a disproportionate interference with the free movement of persons.61 Despite the Commission’s more nuanced view on article 8A, all participating Member States argued against the direct effect of article 8A.62 In his Opinion of 16 March 1999, Advocate-General (AG) Cosmas stressed his view of the relevancy and immediacy of the Wijsenbeek case:63 This case is of particular interest in that it offers the Court an opportunity to interpret the content and effects in law of Articles 7A and 8A of the EC Treaty on the basis of a systematic approach and, by extension, to make a current and global examination of the question of the freedom of movement for persons as it presents itself after the successive revisions of primary Community law.

In an analysis well worth reading today, AG Cosmas first considered the practice of systematic border controls in the light of EC free movement law as it stood at the time (i.e. anno 1999). Cosmas concluded that, although the requirement to identify oneself at the border in itself constitutes a restriction on free movement, primary Community law could not be interpreted so extensively as to require an absolute freedom to cross borders.64 With regard to article 7A (14) EC, AG Cosmas concluded, employing unusually candid argumentation, that it “does not have direct effect, especially as regards the complete elimination of the internal frontiers of the Community . . . for 57 59 61 63 64

58 Report of the Hearing, par. 25. Report of the Hearing, par. 27–29. 60 Report of the Hearing, par. 29. Report of the Hearing, par. 40. 62 Report of the Hearing, par. 47. Report of the Hearing, par. 38–39. Opinion Advocate-General Cosmas in Case 378/97, [1999] ECR I-6207, par. 1. Ibid., par. 35.

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reasons of legal logic, methodology and good policy in terms of judicial decision-making.”65 AG Cosmas’s reasoning on the scope and binding nature of article 8A (18) EC constitutes the most innovative aspect of his Opinion. He argued that the provision was inspired by a more anthropocentric philosophy than other Community law provisions, and that it positioned freedom of movement as a goal in and of itself, not – like article 7A – as merely a function of the common market. In his own words:66 Article 8A does not simply enshrine in constitutional terms the acquis communautaire as it existed when it was inserted into the Treaty and complement it by broadening the category of persons entitled to freedom of movement to include other classes of person not pursuing economic activities ... Article 8A also enshrines a right of a different kind, a true right of movement, stemming from the status as a citizen of the Union, which is not subsidiary in relation to European unification, whether economic or not.

Even if the AG pointed out that this reading of article 8A could on future occasion force the Court to adopt “a revised, updated reading . . . of the content and scope of the principle of freedom of movement”,67 he was not prepared to view the issue of border controls as a sufficiently burdensome infringement on free movement. According to the AG, Community law did not stand in the way of border controls at the internal borders since such internal controls were applied in a non-discriminatory fashion and corresponded to the imperative of common checks at the Community’s external borders. Moreover, he argued that internal controls are a suitable means to attaining that aim and not disproportionate.68 Therefore, the AG concluded that Articles 7A and 8A EC could not be construed as requiring the automatic, complete and general lifting of systematic border controls on EU citizens crossing internal Community frontiers. The ECJ issued its ruling on 21 September 1999, immediately making clear that it was not prepared to wade into the nuances of Mr. Wijsenbeek’s more principled debate. In as few as six paragraphs,69 the Court declared first that the date of 31 December 1992 could not lead to an interpretation of article 7A requiring an immediate abolition of border controls at the internal frontiers of the Community at the date of expiry.70 The Court then adroitly side-stepped the thorny issue of direct effect by stating somewhat evasively that, “even if . . . nationals of the Member States did have an unconditional right to move freely

65 69

66 67 Ibid., par. 73. Ibid., par. 85. Ibid., par. 86. 70 Case-378/97, par. 39–44. Ibid., par. 40.

68

Ibid., par. 106.

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within the territory of Member States”, based on articles 7A and 8A, “Member States retained the right to carry out identity checks at the internal frontiers of the Community . . . in order to establish whether the persons concerned is a national of a Member State, thus having the right to move freely within the territory of the Member States, or a national of a non-member country, not having that right.”71 In response to the preliminary questions, the Court then effectively swept the legs out from underneath Mr. Wijsenbeek’s arguments on the direct effect of articles 7A and 8A when it stated that as Community law stood at the time of the events in question . . . neither Article 7a nor Article 8a of the EC Treaty . . . precluded a Member State from requiring a person, whether or not a citizen of the European Union, under threat of criminal penalties to establish his nationality upon his entry into the territory of that Member State by an internal frontier of the Community, provided that the penalties applicable are comparable to those which apply to similar national infringements and are not disproportionate.72

After the Court’s ruling, Mr. Wijsenbeek’s case went back to the Rotterdam Court of Appeals. There, Mr. Wijsenbeek once again stressed that his case was a case of principle, not a test trial. He intended to invite the ECJ to rule on the extent to which the Community institutions and Member States are under a duty to fulfill promises and respect deadlines laid down in treaty provisions. In the final pleading on 20 January 2000, Mr. Wijsenbeek reiterated this point by stating: “For me and for many with me it has been an attempt to ask for a judgment on the true value of the duty of those who sign a Treaty to do everything in their capacity to live by their commitment.”73 It did not help him in the least. The Appeals Court upheld the original 65 guilders fine. Mr. Wijsenbeek appealed again on points of law, arguing, in essence, that the Dutch Appeals Court should have considered the case ex nunc (i.e. in the light of the situation post-Schengen) and not ex tunc (in the light of the situation in 1993). This case equally failed. What started as a golden chance to force a favourable ruling ended in bitter disappointment (although, as Mr. Wijsenbeek conceded to this author in one of the interviews, forcing a case is very good for name recognition in European circles). The Court’s judgment in Wijsenbeek has been described as “a sign of judicial realism and caution”,74 and even the Court’s “most cautious ruling”75 71 73 74

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72 Ibid., par. 43. Ibid., par 45. Unpublished court documents put at the disposal of the author by Mr. Wijsenbeek. Á. Castro Oliveira, Workers and Other Persons: Step-By-Step From Movement To Citizenship – Case Law 1995–2001 (2002) 39 Common Market Law Review 77–127, at 103. Ibid, 126.

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in the field of free movement of persons, border controls and citizenship in the period of 1995–2001. But why? Knowing what we now know, could a different outcome have emerged from Mr. Wijsenbeek’s efforts in initiating and propelling this case forward? In particular, when given such wide latitude in drafting the preliminary questions, could Mr. Wijsenbeek have better persuaded the Dutch national court into “seducing” the Court of Justice into turning a case of principle into a standard ruling? If the aim was strategic litigation, did this story’s protagonist – Mr. Wijsenbeek – actually employ the soundest litigation strategy available? We will now turn to these issues. Between Principle and Pragmatism: Was There a Tension between the Political Objective and an Effective Litigation Strategy? It is fascinating to try and put oneself in the shoes of Mr. Wijsenbeek and his fellow MEP/lawyer Mr. Janssen van Raaij during these last days of September in 1997. Mr. Wijsenbeek wanted his appeals case reactivated. The Monti package that forced the withdrawal of the EP’s case against the Commission had, once again, stalled. The Amsterdam Treaty was to be signed within days, and well-connected politicians like Mr. Wijsenbeek and Mr. van Raaij, must have known of its contents, including new legal commitments to develop elusive flanking measures ensuring the free movement. If you were to convince the Dutch Appeals Court to refer preliminary questions, and if you could then get the ECJ some five or six years later to rule on the facts as they were in late 1993, where would you want the case to come out? What sort of litigation strategy would have been best suited to gain traction in such a politically deadlocked situation? Judging from the draft preliminary questions proposed in his letter to the prosecutor of 29 September 1997, we can see that Mr. Wijsenbeek’s litigation strategy, consciously or not, was a composite of highly nuanced legal and political considerations. Legally, Mr. Wijsenbeek went for an all-or-nothing, rather than an incremental, approach. Firstly, even if the legal framework in which Member States were to cooperate to develop flanking measures was about to change, Mr. Wijsenbeek wanted the Court to pronounce that the (previous) Maastricht Treaty’s combination of Articles 7A and 8A already forced Member States to abolish border controls at intra-Community borders, even in the absence of these flanking measures. In other words: as a matter of Community law, Member States were under an obligation to open their borders even if they had not yet agreed to any flanking measures. Given Mr. Wijsenbeek’s integrationist convictions, perhaps the manner in which he went about drafting the preliminary questions contained a deeper

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meaning. At heart, Mr. Wijsenbeek wanted the Court to proclaim that free movement of persons on EU soil was and should have always remained, exclusively, a matter of Community law. From that perspective, attempts to find solutions outside of the Community (such as the Schengen cooperation) or solutions found inside the Community but not equally applicable to all Member States (such as the impending Amsterdam Treaty Irish and UK opt-out from the Communitarized Schengen acquis) should have been viewed, for those reasons alone, as impermissible as a matter of Community law. Viewed in this light, Mr. Wijsenbeek’s preliminary questions were essentially a twofold political message wrapped in legal language. It was a call on the ECJ to issue a judgment that would have amounted to a ruling stating that much of what Member States occupied themselves with since at least the entry into force of the Maastricht Treaty was flatly at odds with their obligations stemming from Articles 7A and 8A EC. Not only had the Member States impermissibly cooperated outside of the EC context, but they also maintained illegal border checks. Such a ruling would have been far-reaching, and not necessarily a very comfortable position for the Court to put itself in. On balance, then, given his own legal background, Mr. Wijsenbeek must have been aware that his approach in drafting the preliminary questions was more about restating his political views than about maximizing his chances to win the case, including by offering the Court a clear path for going about its reasoning. Given how sensitive a pronouncement of principle would have been for the Court in this instance, it is an interesting thought-exercise to consider the other litigation strategies that may have been available to Mr. Wijsenbeek. In devising a litigation strategy designed purely and only to win in the Court, in hindsight, it might have been crucial to first subtly coax the Court into issuing a ruling based on the law as it would stand at the time of its judgment instead of the law as it stood in December 1993. Moreover, should the Court prove unwilling to take up the gauntlet in seeking full confrontation with the Member States, it would have been important to provide it with an off-ramp, or alternatives, upon which to issue a ruling based on common sense arguments. For instance, one option would be to persuade the Court to state that there would be various practical measures available for immediate implementation, notwithstanding the absence of flanking measures securing the common protection of the external borders fully in place. Judging by the facts, Mr. Wijsenbeek had a number of promising variables he could have leveraged in this regard. Mr. Wijsenbeek was already checked in Strasbourg when boarding a plane known to be destined for another

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Member State. Even if nothing in Community law prevented border controls at internal borders, i.e. in Strasbourg, why conduct another check again in Rotterdam if the rationale for the execution of border checks at internal borders was argued to be lying in the protection of the EU’s external borders? Moreover, the fact that Rotterdam airport only received flights from other Member States was also relevant. Rotterdam airport was a travel hub akin to a railway station, just a stone’s throw from the Court, Luxembourg Central station. Even if most trains arriving at that hub originated in Belgium, France, and Germany, it lacked the same intensity of border controls, let alone controls at both stations of departure and arrival. Where, then, was the justification in treating airports differently as a matter of principle? Why could Member States not at least start taking practical measures in line with the realities of specific travel hubs, focusing only on those that actually received travellers from outside of the EU? In summary, would the whole idea of creating a single market not require, at the very least, that Member States reconsider practices that were evidently inconsistent in focus and duplicative by nature? We will, of course, never know, but such an incremental approach in Wijsenbeek could have furnished the Court with arguments allowing it to steer clear of having to rule on principle. Through a more incremental approach, the Court could have related directly to what was actually happening on the ground in the absence of flanking measures, while also addressing the real-life inconveniences that the then-state of affairs was causing to travellers. If the Court pronounced that Member States were to adapt some of the practices inherent in border controls at intra-Community borders, because their operation (rather than their very existence) constituted an unjustifiable barrier to free movement of goods, this could have had very far-reaching and immediate consequences. It could have even put considerable pressure on Member States to fast-track the development of the flanking measures just months after the Amsterdam Treaty’s entry into force. This would have positioned the Court precisely where it has often liked to be and where it has made the biggest impact: subtly setting the agenda for future legislative developments by relying on technical arguments framed as self-evident links in an organic chain of jurisprudence. In this way, perhaps, Wijsenbeek is also a case where – after being handed a golden opportunity to help the court to turn a case of principle into a standard case – political motivation eventually undercut our protagonist’s litigation strategy. After all, the “win” that Mr. Wijsenbeek sought at the ECJ was implausible right from the outset, given the position it would have placed the Court in had it fully taken on board Mr. Wijsenbeek’s integrationist vision.

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conclusion Today, Wijsenbeek is viewed as a central early ruling about the (lack of) direct effect of what are now articles 21 and 26 TFEU and an important harbinger case about rights attached to the concept of Community/Union citizenship. Despite its outcome, Wijsenbeek is also widely seen as having served as a legal and political catalyst for moving from the common market to the area of freedom, security, and justice. It has become known as an “EU law classic” on these terms, and has found its place in almost every important handbook.76 For a case based on personal conviction and strategic litigation, Wijsenbeek is a great achievement by any account. But Wijsenbeek also tells numerous other stories. It is a story about the power of the humorous and contrarian approach of a strongly pro-European politician. It is a remarkable story about the extent to which a Dutch Appeals Court granted almost complete leeway to Mr. Wijsenbeek and his MEPlawyer to frame the case towards the Luxembourg Court. This, in turn, provides a unique occasion to consider the tantalizing question of whether Mr. Wijsenbeek pursued his case fully “strategically”, and whether, ultimately, it was as successful as it could have been in litigation terms. But above all, Wijsenbeek is a story about a concerted political effort by different MEPs to leverage Luxembourg’s judicial weight in pursuit of a specific political agenda when Europe’s political arena remained deadlocked on an issue. This vividly illustrates, once again, that well-known story unique to the development of EU law: just how influential and decisive the Court has been seen to be all along in pushing the integrationist agenda.

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See above, n. 3.

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11 Breaking Chinese Law – Making European One The Story of Chen, or Two Winners, Two Losers, Two Truths

dimitry kochenov and justin lindeboom

introduction: taking a flight to europe to break the law In the Chen case the European Court of Justice (ECJ) extended the protections of European law to a non-citizen parent of an EU citizen child, who, although never having crossed borders between EU Member States, possessed the nationality of a Member State different from the one where the family resided.1 The case fuelled important developments in Ireland and boosted the importance of the status of EU citizenship to a great degree. On 15 May 2000, Man Lavette Chen, a pretty, petite twenty-five-year-old Chinese woman working for a successful chemical company,2 arrived in the United Kingdom.3 Impeccably dressed and with a vivid sense of humour, she knew Europe very well – she was a regular on London-bound flights. The majority interest in the pigments- and dyestuffs-producing company that she represented belonged to her husband,4 alongside his numerous other investments in Chinese coastal cities.5 Mr. Chen remained at home in Zhuhai city with the family’s firstborn, Huixiang, just under two years old at the time.6 Man Chen was very rich and travelled to the United Kingdom with only one goal: to break the law. She felt that she was capable of deciding herself how many children she wanted, refusing to leave this issue to the Chinese government. 1

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Case C-200/02 Kunqian Catherine Zhu and Man Lavette Chen v. Secretary of State for the Home Department [2004] ECR I-9925. Zhuhai Skyhigh Chemicals. The company has been renamed Skychem Corporation since the events of this story. Man Chen still works for this company. Man Lavette Chen and Kunqian Catherine Zhu (dependent) v. Secretary of State for the Home Department, Ruling on a reference to the Court of Justice of the European Communities (Immigration Appellate Authority, Hatton Cross, 23 April 2002), paras. 9 and 12. Chen and Zhu v. Secretary of State (Immigration Appellate Authority), para. 9. Interview with Adrian Berry, 3 March 2014, London. Chen and Zhu v. Secretary of State (Immigration Appellate Authority), para. 11.

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Her actions, independence and determination helped to shape European law, moving the Union forward: the Chen case appears in every textbook. The story behind it is much more fascinating than the accounts of commentators have made it, however, hence the need to retell it (removing our legal hats, we must add). The story is telling: Mrs. Chen’s resounding success in finding an indigenous way of breaking an oppressive Chinese law has profoundly reshaped the law of the European Union. Moreover, as a consequence of this case, the law of the Irish Republic has also been changed, and the United Kingdom has come to find itself much less compliant with European law than previously, refusing – implicitly – to support its lowest immigration courts in referring questions to the ECJ.7 At least four jurisdictions were thus profoundly affected by the actions of one brave woman. The Chen play involved beauty, wealth, government sloppiness, the jailed Adjudicator Michael Shrimpton’s outrage and the great Sir Richard Plender arguing against himself. The case came as a definitive reaffirmation of the importance of EU citizenship, thus moving it closer to the ‘fundamental status of the nationals of the Member States’8 ideal. It also created a moral panic in Ireland and backfired in the United Kingdom, undermining the latter’s adherence to EU law. It showed with particular clarity the sickness of the European mass media and the strength of the Eurocentric and profoundly prejudiced worldview many Europeans seem to espouse. A charismatic millionaire mother thus turned in the public imagination into a poor Asian coming to rich Europe to abuse welfare. Her beautiful Irish baby in turn became a parasitic Chinese child abusing the law by the very act of her birth.9 This perverted new orientalism – less refined than the one described by Said,10 but with just as little to do with reality – reached such humongous proportions that the whole Irish nation, silly as it might sound (though not for the first time),11 felt obliged to resort to a national referendum, this time to change the basic rules for the acquisition of nationality: voting down ius soli.12 The reasons cited which informed this change had nothing to do – not surprisingly, 7 8

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Interview with Adrian Berry, 3 March 2014, London. Case C-184/99 Rudy Grzelczyk v. Centre public d’aide sociale d’Ottignies-Louvain-la-Neuve [2001] ECR I-6193. Conversations with Sir Richard Plender, 2011, Groningen and Sevenoaks. E. W. Said, Orientalism (Vintage Books 1979). Another recent example is described in detail by Michael D. Goldhaber and concerns the effectiveness of US money in introducing a ban on abortions into the Irish constitution (the Eighth Amendment) by a popular vote: M. D. Goldhaber, A People’s History of the European Court of Human Rights (Rutgers University Press, 2009), 26–32. Of those who voted (with a turnout of 59.95%), 79.17% voted for removing the ius soli provision from the Constitution, making the 27th Amendment of the Irish Constitution a reality.

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but no less sadly – with the case at hand: ‘[ius soli is] a shortcut many asylum seekers used to win residency’.13 The Irish voted to ensure that the poor Asians of their imaginations would not flock to their rich Republic using the ‘anchor baby’ technique, citing the case of a Chinese millionaire who had never visited their country as a reason to inflate their fears to such a degree that the Constitution had to be changed. This chapter first briefly presents what we cherish in Chen – the rule of the case and its key political implications, including the revision of Irish nationality law and of the UK immigration authorities’ practice of referring questions to the ECJ – and then proceeds to the main reason behind the whole story as it evolved: the one-child policy in Chinese law. The chapter then turns to its key part: simply telling the story as it happened based on the available documents and the interviews the authors conducted with all the key lawyers involved in the case at various London cafés and a mansion not far from Sevenoaks. Our task is to walk the reader through all the stages of the case’s evolution. Finally, the conclusions focus on the complete disconnect between the reasons behind Mrs. Chen’s actions and what actually happened and the image of the case created in the media, thereby revealing the two winners, two losers and two basic truths promised in the title.

the law: chen ’s legacy, added value and implications The Chen case came as a strong reaffirmation of the importance of the status of EU citizenship, demonstrating its ability to extend the material scope beyond the situations which are either connected to the physical crossing of the borders or economic activity (including the intent to pursue such an activity) within the internal market. In this sense Chen was probably expected, but nonetheless played an important role in the Court’s line of case law leading to endowing EU citizenship with a true sense of ‘fundamental status’, as promised in Grzelczyk.14 It is one of the first ‘pure’ EU citizenship cases decided by the ECJ where the citizenship provisions in the Treaty proved usable and consequential. On this point, all the later cases where the ‘crossborder situation’ is either fictitious or not required at all – from Schempp15 to McCarthy16 – are definitely Chen’s progeny to a certain extent. Moreover, the 13

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J. DePearle, ‘Border Crossings: Born Irish, but with Illegal Parents’, New York Times, 25 February 2008. Case C-184/99 Grzelczyk [2001] ECR I-6193. Case C-403/03 Egon Schempp v. Finanzamt München v. [2005] I-6421. Case C-434/09 Shirley McCarthy v. Secretary of State for the Home Department [2011] ECR I-3375.

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case presented an important reaffirmation of the obligation on the Member States to recognize each other’s nationalities, which are legally acquired, thus tacitly reaffirming Micheletti17 and paving the way to Rottmann.18 Lastly, at the level of protecting the rights of family members – not a well-lit corner of the ECJ’s case law – the case played an essential role in reaffirming that having ‘sufficient resources’ does not imply ‘personal resources’, thus fully extending the protections of the law to EU citizen children. Allowing a parent-caregiver to stay with a child is a fundamentally important rule that the case reinforced. Problematically, the judgment constantly emphasized money: the rich can stay with their children, unless something truly extraordinary – as in Ruiz Zambrano19 – happens, the Court told us. This emphasis on being ‘rich’, which would have been expected to recede as EU citizenship matured, has not diminished.20 From McCarthy to Alokpa21 and Dano,22 the Court has refused the ‘poor’ the rights that the ‘rich’ enjoy: not to burden the Member States’ social security systems is thus more important than keeping families together,23 an approach which potentially violates the ECHR.24 All in all, however, Chen has been a huge success in terms of making a significant contribution to Union citizenship, entirely grounded in the law. The same cannot be said about the reactions to this case at the national level. Therefore, while the United Kingdom’s lowest immigration courts simply do not refer cases to the ECJ any more – which in itself is a blunt violation of EU law, as references are the lifeblood of the ECJ25 – the developments in Ireland went even further that that. The Chen case was

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Case C-369/90 Mario Vicente Micheletti and Others v Delegación del Gobierno en Cantabria [1992] ECR I-4239. Case C-135/08 Janko Rottmann v. Freistaat Bayern [2010] ECR I-1449. Case C-34/09 Gerardo Ruiz Zambrano v. Office national de l’emploi (ONEm) [2011] ECR I-1177. For a global critical analysis, see, D. Kochenov, ‘On Tiles and Pillars: EU Citizenship as a Federal Denominator’, in D. Kochenov (ed.), EU Citizenship and Federalism: The Role of Rights (Cambridge University Press 2017). Case C-86/12 Adzo Domenyo Alokpa and Others v. Ministre du Travail, de l’Emploi et de l’Immigration ECLI:EU:C:2013:645. Case C-333/13 Elisabeta Dano and Florin Dano v. Jobcenter Leipzig ECLI:EU:C:2014:2358. G. Davies, ‘The Right to Stay at Home: A Basis for Expanding European Family Rights’ in D. Kochenov (ed.), EU Citizenship and Federalism: The Role of Rights (Cambridge University Press 2016). S. Adam and P. Van Elsuwege, ‘EU Citizenship and the European Federal Challenge through the Prism of Family Reunification’, in D. Kochenov (ed.), EU Citizenship and Federalism: The Role of Rights (Cambridge University Press 2017). See further M. Broberg and N. Fenger, Preliminary References to the European Court of Justice (2nd ed., Oxford University Press 2014).

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abused and misrepresented in the public debate as an example of why ius soli should be abolished, leading to a referendum in 2004 and an amendment of the Irish Constitution.26 Considerations of space preclude any detailed analysis of the amusing referendum campaign here, but one thing was absolutely clear: the connection between Chen and any problems that the Irish were willing to ascribe to their immigration system whatsoever was simply not there.27

what mrs. chen was running away from: china’s one-child policy The one-child policy in China was introduced in 1979 in an effort to halt a population explosion whereby China’s approximately 540 million people in 1949 had risen to more than 800 million by 1979.28 In the 1950s, a massive government campaign urged Chinese citizens to have large families to increase China’s workforce.29 Chairman Mao called birth control ‘a way of slaughtering the Chinese people without drawing blood’,30 and the campaign was accompanied with the slogan ‘the more babies the more glorious are their mothers’.31 In the 1970s, the Chinese government realized that rapid population growth posed a threat to economic development, and tried to reverse its 1950s campaign by starting a ‘Later, Longer, Fewer’ program.32 This program promoted a maximum of two children per family.33 Pushing the program further, a one-child policy was put into effect in 1979.34

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For an analysis, see M. Maguire and T. Cassidy, ‘The New Irish Question: Citizenship, Motherhood and the Politics of Life Itself’ (2009) 12 Irish Journal of Anthropology 18. For a legal analysis of the evolution of the Irish nationality law, see e.g., J. Handoll, ‘Country Report: Ireland’, EUDO Citizenship Observatory Paper (European University Institute 2012). These projections are, however, very uncertain. See N. M. Skalla, ‘China’s One-Child Policy: Illegal Children and the Family Planning Law’ (2004) 30 Brooklyn Journal of International Law 329, 332; referring to G. J. MacDonald, How Reliable Are Population Statistics from China? International Institute for Applied Systems Analysis (1999). L. B. Gregory, ‘Examining the Economic Component of China’s One-Child Family Policy under International Law: Your Money or Your Life’ (1992) 6 Journal of Chinese Law 45, 48. S. W. Mosher, Broken Earth: The Rural Chinese (Free Press 1984) 224. X. Li, ‘License to Coerce: Violence Against Women, State Responsibility, and Legal Failures in China’s Family-Planning Program’ (1996) 8 Yale Journal of Law & Feminism 145, 148. T. White, China’s Longest Campaign: Birth Planning in the People’s Republic, 1949–2005 (Cornell University Press 2006). X. Peng, ‘Population Policy and Program in China: Challenge and Prospective’ (2000) 35 Texas International Law Journal 51, 52–53. Report on Implementation of CEDAW in the People’s Republic of China, Human Rights in China (1998) 73ff; T. Hesketh, L. Lu and W. X. Zhu, ‘The Effect of China’s One-Child Family Policy After 25 Years’ (2005) New England Journal of Medicine 1171.

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For decades, the one-child policy only had a vague basis in constitutional or other law,35 until 1 September 2002, when the Family Planning Law was adopted.36 Article 18 states: ‘The State maintains its current policy for reproduction, encouraging late marriages and childbearing and advocating one child per couple. Where the requirements specified by laws and regulations are met, plans for a second child, if requested, may be made.’ According to the National Population and Family Planning Commission of China, more than 400 million births have been prevented in the history of the one-child policy.37 The birth rate dropped from 5.9 children per woman in the late 1960s to 1.7 children per woman in 2004.38 These figures notwithstanding, scholars have questioned the ultimate success of the policy.39 The one-child policy is implemented from the top down. Central government issues directives and resolutions for local and regional governments and sets birth quotas binding on them.40 Enforcement takes place at the regional and local levels on an ad hoc basis.41 The rules are simple. All couples must be married and obtain a birth permit before being allowed to conceive a child. This can take years if many couples within the region want to have children.42 In the urban areas, where approximately one-third of the population resides, the one-child policy is strictly enforced, while exceptions sometimes apply in rural areas.43 In the policy’s early years, practical enforcement was characterized by severe brutality, including forced sterilization of couples after their first

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Art. 25 Constitution of the People’s Republic of China (1982) stipulates that ‘The state promotes family planning so that population growth may fit plans for economic and social development’. Furthermore, Art. 2 Marriage Law of the People’s Republic of China (1980) states that ‘Family planning shall be practised’. P. T. C. Hui, ‘Birth Control in China: Cultural, Gender, Socio-economic and Legislative Perspectives in Light of CEDAW Standards’ (2002) 32 Hong Kong Law Journal 187, 188. J. FlorCruz, ‘China Copes With Promise and Perils of One-Child Policy’ CNN (29 October 2011), available at http://edition.cnn.com/2011/10/28/world/asia/china-one-child/. Hesketh, Lu and Zhu, ‘The Effect of China’s One-Child Family Policy’, 1172. Ibid. See further on inter alia the skewed sex ratio in China, the ongoing neglect, malnourishment and infanticide, and the high suicide rate among Chinese women: W. X. Zhu, L. Lu and T. Hesketh, ‘China’s Excess Males, Sex Selective Abortion, and One-child policy: Analysis of Data from 2005 National Intercensus Survey’ (2009) British Medical Journal 338; P. S. F. Yip et al., ‘Suicide Rates in China during a Decade of Rapid Social Changes’ (2005) 40 Social Psychiatry and Psychiatric Epibidiology 792; and S. W. Mosher, A Mother’s Ordeal: One Woman’s Fight Against China’s One-Child Policy (Hartcourt Brace 1993). Li, ‘License to Coerce’, 151–52. J. Chen, Chinese Law: Towards an Understanding of Chinese Law, Its Nature and Development (Martinus Nijhoff 1999) 262. Li, ‘License to Coerce’, 152; Human Rights in China, Unfair Burdens: Impact of the Population Control Policies on the Human Rights of Women and Girls (1995). Hesketh, Lu and Zhu, ‘The Effect of China’s One-Child Policy’, 1171.

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child,44 while forced abortion,45 imprisonment,46 fatal beatings47 and infanticide have also been reported.48 Non-compliance has also frequently led to unbearable fines of up to two or three times the annual income, depending on the region.49 Such enforcement methods seem to have primarily resulted from the unfettered discretion of low-quality and corrupt local government officials.50 The entry into force of the Family Planning Law officially condemned both physical punishments and the imposition of fines.51 While probably not much has changed in practice, as compliance came to be enforced through ‘social compensation fees’, last year saw a gradual departure from one-child policy nation-wide. During the run-up to Chen this was very difficult to anticipate, however. Like the fines imposed earlier, ‘social compensation fees’ then in force were based on income and varied greatly between regions. In poor rural areas, the fee was around 10 per cent of the annual family income, whereas in the urban areas it could be as high as three to seven times the annual family income.52 The one-child policy remained highly intrusive and largely unpredictable because of decentralized enforcement and ad hoc nature, thus turning it into an ideal subject to corruption, taking into account the social and political influence of the ‘perpetrators’ this policy had.

pursuing catherine’s best interest: the story of breaking and making the law Giving Birth to Catherine: Wise Legal Advice It is the uncertainty inherent in the relevant Chinese law, coupled with the determination to have two children, that led Mrs. Chen to explore all the 44 45 46

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A. Noonan, ‘One-Child Crackdown’ National Review (16 August 2001). Human Rights in China, Unfair Burdens. S. T. Masson, ‘Cracking Open the Golden Door: Revisiting US Asylum Law’s Response to China’s One-Child Policy’ (2009) 37 Hofstra Law Review 1135, 1138. H. Beech, ‘Enemies of the State?’ Time (12 September 2005) 61. H. Wu, ‘Controlling China: The US Congress Should Not Fund State-Mandated Abortions’ National Review Online (9 July 2004), cited in Masson, ‘Cracking Open the Golden Door’, 1138. Skalla, ‘China’s One-Child Policy’, 339. G. Zhang, ‘US Asylum Policy and Population Control in the People’s Republic of China’ (1996) 18 Houston Journal of International Law 557, 569. Art. 4 Family Planning Law, e.g. states that ‘When promoting family planning, the people’s governments at all levels and their staff members shall perform their administrative duties strictly in accordance with law, and enforce the law in a civil manner, and they may not infringe upon legitimate rights and interests of citizens.’ The United Nations Population Fund in China, 6.

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possibilities available outside China. Adrian Berry, a lawyer involved in the case, is very clear on this: ‘Her only motivation was to have the second child.’53 Mrs. Chen used one of her business trips to the United Kingdom to investigate the legal possibilities of raising her second baby in Europe. Two elements had to coincide: the baby’s nationality had to not be Chinese, and the Chinese national mother needed to acquire a residence right outside of China. The Chen case started when Mrs. Chen, shortly after arriving on her own in the United Kingdom, walked into Malloy & Barry Solicitors, a well-known firm in Cardiff, and immediately asked for an immigration lawyer. Not surprisingly, there were none available – Chen was the first immigration case in which the eminent commercial firm was involved, probably not to disappoint their important Chinese client.54 Michael Barry, partner at this firm, decided to call Ramby de Mello, a barrister in London who specialized in European and immigration law. Along with Mrs. Chen, they discussed the legal options. Mr. de Mello vividly remembers these elaborations and recalls the impressive presence of Mrs. Chen: ‘She was by all means a very attractive young lady. She was about 5’4” tall, wore a pale-smooth made-up complexion and was very well dressed. In fact, when Michael [Barry] had his tie knot slightly crooked, Mrs. Chen did not hesitate from adjusting the knot, while emphasizing with a smile that it was very important to dress smartly.’55 ‘It was fully clear’, De Mello emphasizes, ‘that the Chen case is not a story about a poor immigrant abusing the law, or a search for European welfare. It is a story about an intelligent, independent woman who only pursued the best interests of her child.’ Moreover, as Adrian Berry confirmed, securing non-Chinese nationality for the baby rather than the right to stay in the United Kingdom was the crux of the matter: the family was wealthy enough to have plentiful alternatives. Particularly so, given that the United Kingdom is one of the historical jurisdictions, alongside the United States and Canada, which allow easy and immediate acquisition of residence by investors56 – a route which could be pursued at any time should EU law fail to help for some reason. Using EU law was just one option among many and came naturally, as it was admittedly the cheapest.

53 55 56

54 Interview with Adrian Berry, 3 March 2014, London. Ibid. Interview with Ramby de Mello, 18 October 2014, London. See e.g., M. Sumption and K. Hooper, ‘Selling Visas and Citizenship’, Migration Policy Institute Report, 2014; K. Surak, ‘Global Citizenship 2.0 – The Growth of Citizenship by Investment Programs’, Investment Migration Paper No. 03/2016 (Investment Migration Council, Geneva).

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In order not to be Chinese, the child needed to acquire the nationality of any other state in the world at birth.57 A European nationality would come with EU citizenship status.58 The easiest way to endow the child with such a status was to ensure that she be born on the isle of Ireland – the Republic of Ireland was then the only Member State then recognizing the ius soli nationality principle.59 Under the law of the Irish Republic at the time, babies born in Northern Ireland, which is part of the United Kingdom, would also automatically receive Irish nationality – a rare example of conferral of nationality practice where ius soli applies on a territory larger than the actual territory of the state concerned. Ensuring that the child would not be Chinese in the eyes of the law was thus relatively easy. Residence proved a different matter, however. The right of residence of the baby’s mother (and thus the child, too) could not be based on Irish law itself, as the Irish approach to this issue was undergoing change around the time of Catherine’s birth. The Irish Supreme Court, previously welcoming of the idea of family unity prevailing over the Republic’s interest to remove the irregularly resident parents of Irish-born citizen-children,60 changed its approach radically in 2003, before Chen was decided by the ECJ, and no longer sees any problem in deporting citizen-children from Ireland along with their parents,61 a practice which is now at odds with ECJ’s Ruiz Zambrano and McCarthy line of cases.62 Under purely UK law, neither the Chinese mother nor the Irish baby would be allowed to reside in UK territory unless investments were made. While money could talk, human rights law was clearly out of the picture, since the Human Rights Act 1998 had not yet entered into force.63 It soon became clear, however, that EU law could possibly offer a solution to the residence question: ‘It is always nice to try out something new’, as Adrian Barry put it.64 57

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Art. 5 Nationality Law of the People’s Republic of China states that ‘a person whose parents are both Chinese nationals and have both settled abroad, or one of whose parents is a Chinese national and has settled abroad, and who has acquired foreign nationality at birth, shall not have Chinese nationality’. Arts. 9 TEU and 20 TFEU. For an analysis, see e.g., D. Kochenov, ‘The Essence of EU Citizenship emerging from the Last Ten Years of Academic Debate: Beyond the Cherry Blossoms and the Moon?’ (2013) 62 International and Comparative Law Quarterly 97. In general, see I. Honohan, ‘Ius Soli Citizensihp’, EUDO CITIZENSHIP Policy Brief No. 1 (not dated), available at . Supreme Court of Ireland, Fajujonu v. Minister for Justice [1990] 2 IR 151. Supreme Court of Ireland, A.O. & D.L. v. Minister for Justice [2003] 1 IR 1. Case C-34/09 Ruiz Zambrano [2011] ECR I-1177; Case C-434/09 McCarthy [2011] ECR I-3375. See also P. Van Elsuwege and D. Kochenov, ‘On the Limits of Judicial Intervention: EU Citizenship and Family Reunification Rights” (2011) 13 European Journal of Migration and Law, 443. 64 Interview with Adrian Berry, 3 March 2014, London. Ibid.

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Mrs. Chen’s lawyers’ initial thoughts on the legal options were based on two core ideas. Academic literature from the 1990s suggested that the introduction of EU citizenship in the Maastricht Treaty could possibly stretch the scope of EU law further than previously thought possible.65 For the baby, there were two possible arguments. First, Article 18 of the Treaty on the European Community (EC) (now Article 20 of the Treaty on the Functioning of the European Union) could bring her automatically within the material scope of EU law and give her a right of residence throughout the Union. Supplemental to that, De Mello recalls that even if the baby’s EU citizenship did not automatically grant her a right of residence in the United Kingdom, ‘I intuitively reckoned that the very circumstance that someone possesses the nationality of one Member State, but lives in another, would bring the matter within the scope of EU law’.66 This matter was by no means undisputed67 and success was not guaranteed. The second idea related to the legal position of Mrs. Chen herself. In the event that the baby would have a right of residence in the United Kingdom, Mrs. Chen’s residence would only be secured if she could derive a right from her baby’s EU citizenship rights. At that time, however, the ECJ’s ‘derivative right’ à la Baumbast68 had not yet been formulated, and the legal team had to construct their advice cautiously. They intended to proceed based on the ‘dependency’ criterion in Directives 73/148/EEC and 90/364/EEC, construing it as capable of granting a residence right in the sense that the baby would not only be dependent on Mrs. Chen’s care and finances, but Mrs. Chen would also be emotionally dependent on the baby. De Mello and Barry advised Mrs. Chen that they could definitely make a case, depending on a number of circumstances. They stressed to her, however, that there was no certainty as to the result on either of the points. Fully aware of the legal consequences of the available options, Mrs. Chen was left with the final decision either to return to China and risk problems with the authorities there or to remain in the United Kingdom and take the risk of a battle for the right to stay. For a few months, Barry and De Mello then lost sight of the case. 65

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For crucial contributions, see e.g., S. O’Leary, The Evolving Concept of Community Citizenship (Kluwer Law International, 1997); M. LaTorre (ed.), European Citizenship: An Institutional Challenge (Kluwer Law International, 1998). Interview with Ramby de Mello, 18 October 2014, London. The grounds on which the ECJ ultimately accepted the right of residence of both Catherine and Mrs. Chen leaned heavily on the concepts of a ‘purely internal situation outside the scope of EU law’ and ‘derivative right of residence’ which were respectively developed in Case C-148/ 02 Garcia Avello v. Belgian State [2003] ECR I-11613 and Case C-413/99 Baumbast and R v. Secretary of State for the Home Department [2002] ECR I-7091. Neither case had been handed down when Mrs. Chen consulted Barry and De Mello. Case C-413/99 Baumbast [2002] ECR I-7091.

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Meanwhile, Mrs. Chen decided to take the risk. In July 2000, being seven months pregnant, she travelled to Belfast. She stayed at a hotel at first but found temporary accommodation after a while. On 16 September 2000, Kunqian Catherine Zhu, national of Ireland and citizen of the European Union, was born in Ulster Hospital, Belfast. Subsequently, Mrs. Chen and Catherine travelled back to Cardiff and started living at Atlantic Wharf, an attractive area adjacent to Cardiff Bay.69 For the next few years, mother and daughter would live on their own. Although she was definitely an independent woman, according to De Mello, Mrs. Chen did miss her husband and son who remained in China and could only pay her visits.70 Giving birth to Catherine in Northern Ireland surely had significant and irreversible consequences: the acquisition of Irish nationality automatically meant that Catherine would be excluded from Chinese nationality. It appeared to De Mello that after Mrs. Chen became pregnant for the second time, Mr. and Mrs. Chen genuinely feared that raising Catherine in China might jeopardize her future and the family’s social and political position. With the enforcement of the one-child policy being both unpredictable and possibly far-reaching, the Chens concluded at an early stage of the pregnancy that bringing the baby to the United Kingdom – which both of the parents frequently visited, after all – was the safest option for the baby. In Court from Birth So the Chen saga began. Ramby de Mello recalls the exact moment when Michael Barry called him. ‘“We have to get to work, Ramby,” he said, “we have a baby.” In fact, I saw a picture of young Catherine soon thereafter. She truly was a beautiful baby. At that moment I realized this was not just an interesting citizenship case, it was a hugely significant case for the life of Catherine.’71 Mrs. Chen’s legal team sent a letter to the Secretary of State for the Home Department, requesting a long-term residence right in the United Kingdom for Catherine and Mrs. Chen. A rejection came soon thereafter. On appeal, the case was brought before the Immigration Appellate Authority (IAA). The hearing was held at Hatton Cross on 23 April 2002. It was one of those days on which, according to Ramby de Mello, all the pieces of the puzzle suddenly fell together.72 Moreover, the Adjudicator in charge of the case was a colourful man. His Ruling on a Reference to the Court of Justice is a truly 69 70

Chen and Zhu v. Secretary of State (Immigration Appellate Authority), para. 15. 71 72 Interview with Ramby de Mello, 18 October 2014, London. Ibid. Ibid.

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remarkable read: ‘you absolutely have to see it’, Adrian Berry said, pulling out a copy.73 The referral is filled with indignation at the Secretary of State’s handling of the case – who had even failed to show up at Hatton Cross without stating any reason. In the IAA proceedings, De Mello constructed his plea under three headings. First, he argued that Catherine was receiving services within the meaning of Article 1(1)(b) Council Directive 73/148/EEC: a logical argument given that the ECJ has traditionally used services to move factual constellations within the material scope of EU law74 before EU citizenship got traction of its own.75 The obvious problem with this approach relates to the temporary nature of services, arguably the reason why the ECJ itself switched to EU citizenship after Maastricht. Be that as it may, it was argued that Catherine was receiving full-time childcare and medical services in Cardiff. Moreover, Mrs. Chen would have to qualify as a ‘dependent relative in the ascending line’ within the meaning of Article 1(1)(d) Directive 73/148/EEC. Although Catherine was undisputedly emotionally and financially dependent on her mother, it was argued that Mrs. Chen was also dependent on her child’s citizenship rights and qualified as a ‘dependent’ for the purpose of her own immigration status.76 Second, Catherine fell under the Article 1(1) Directive 90/364/EEC, which read: Member States shall grant the right of residence to nationals of Member States . . . provided that they themselves and the members of their families are covered by sickness insurance in respect of all risks in the host Member State and have sufficient resources to avoid becoming a burden on the social assistance system of the host Member State during their period of residence.

It was clear that Catherine would have sufficient resources not to become a burden on the social assistance system of the United Kingdom: the wealth of the Chen family was undisputed. De Mello emphasized that the fact that Catherine’s resources were not hers but stemmed from her parents was not relevant. As for Mrs. Chen, De Mello also repeated his ‘dependency’ argument, which would grant her a right of residence under Article 1(2) of the Directive.

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Interview with Adrian Berry, 3 March 2014, London (IAA decisions are not readily available and can be difficult to come by). Case 186/87 Cowan [1989] ECR I-195; Case C-348/96 Criminal proceedings against Donatella Calfa [1999] ECR I-11. Case C-85/96 Martínez Sala [1998] ECR I-2691. Chen and Zhu v. Secretary of State (Immigration Appellate Authority), paras. 23 and 25.

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Such an interpretation of ‘dependency’ in the two Directives could be interpreted as rather artificial.77 A third argument was therefore submitted, namely that even if Catherine and Mrs. Chen could not derive a right of residence from secondary law, they could be brought within the material scope of EU law by Article 18 EC (now Art. 20 TFEU) in itself. This would imply that Article 18 would give Catherine and, necessarily, Mrs. Chen a ‘free standing or direct right of free movement’.78 De Mello based this argument on the Opinion of AG Geelhoed in the Baumbast case, which was pending before of the ECJ at the time. In that Opinion, AG Geelhoed suggested that there might be special circumstances in which Article 18 EC would confer a self-standing right.79 In conclusion to his three major pleas, De Mello emphasized that the present case and the arguments he raised were not governed by authority, and should ultimately be brought before the ECJ. ‘Getting the reference was key’, as Berry confirmed.80 He therefore constructed seven preliminary questions for the ECJ to determine the validity of his skeleton argument.

The Bar’s Maverick The case was handled by Adjudicator Michael Shrimpton, expert in intelligence and defense policy and known for advancing several conspiracy theories.81 We managed to interview him before his incarceration: on 6 February 2015, he was sentenced to twelve months imprisonment for communicating false rumors to the UK government about alleged nuclear terrorist attack plans at the 2012 London Olympic Games, organized by the Nazi Continuum Agency Deutsches Verteidigungs Dienst, underground since the end of World War II, using a nuclear warhead stolen from the sunken Russian submarine Kursk.82 Though suffering from a narcissistic personality disorder, as his lawyer alleged,83 Mr. Shrimpton played a crucial role in ensuring that justice in the Chen case prevailed, as he was bold

77 78 79 80 81

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As de Mello admitted in our interview. Chen and Zhu v. Secretary of State (Immigration Appellate Authority), para. 26. Case C-413/99 Baumbast [2002] ECR I-7091, Opinion of AG Geelhoed, para. 126. Interview with Adrian Berry, 3 March 2014, London. Shrimpton sets out his view on the world most elaborately in his recent book Spyhunter (June Press 2014). ‘Michael Shrimpton: Barrister who claimed Nazi spies were planning to attack London Olympics with nuclear bomb is jailed’, The Mirror, 7 February 2015. Ibid.

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enough to go against the highly problematic British practice of not taking EU law seriously in immigration matters.84 At that time, the well-known policy of many British courts was to leave the dialogue with the ECJ to the Court of Appeal and the then House of Lords. It is therefore absolutely unique that the Chen case was referred to the ECJ at first instance, and in that respect Shrimpton played a quintessential role. Recalling the case vividly, Shrimpton felt proud of referring a case to the ECJ for the second time – emphasizing that his first reference was the first ever by an IAA Adjudicator.85 ‘It was fully clear to me that it was not a matter of acte clair’, said Shrimpton, ‘and I was always of the view that cases should be settled at the earliest possible stage. I knew the case would have inevitably had to end up in Luxembourg and saw no reason to refrain from using the preliminary reference procedure immediately.’86 Shrimpton’s referral of the case was reportedly much to the disgust of Henry Hodge, then Chief Immigration Adjudicator and later High Court Judge,87 and did not contribute to his popularity in judicial circles, showing how fragile the position of EU law is on the ground in UK immigration circles. Shrimpton’s peculiar and intractable character was a factor of major significance in bringing the case to the ECJ. Shrimpton’s urge to refer the case was not just a product of his experience and logical reasoning, however (under subtle guidance from De Mello). Another, probably even more crucial reason for Chen’s quick route to Kirchberg was the attitude of the Secretary of State in the IAA proceedings, who had decided not to defend his previous decision at all, and remained completely absent from the hearing. While Mrs. Chen was present with all her legal team, all convinced of the high importance of the case for themselves and for the 84

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For an overview, see J. Shaw, N. Miller and M. Fletcher, Getting to Grips with EU Citizenship: Understanding the Friction between UK Immigration Law and EU Free movement Law (Edinburgh Law School 2013). Interview with Michael Shrimpton, 14 October 2014, London. Shrimpton’s first reference was Case C-416/96 Nour Eddline El-Yassini v. Secretary of State for Home Department [1999] ECR I-1209, in which the ECJ indeed scrutinized whether an Immigration Adjudicator should be regarded as a ‘court or tribunal’ within the meaning of (now) Article 267 TFEU (paras. 16–22). Shrimpton writes about this first reference: ‘I did not get a reputation for being in awe of authority . . . The Home Office once decided that they needn’t send a senior barrister along to resist an application by a German barrister for a reference of questions of European Community law to the European Court of Justice in Luxembourg . . . For some reason they decided that . . . as a Eurosceptic [I] would not be keen to become the first Immigration Adjudicator to refer a point of law to Luxembourg’ at his blog post ‘MH-370 Shoot Down – The Plot Thickens’ (23 March 2014), available at www.veteranstoday.com/2014/03/23/mh-370shoot-down-the-plot-thickens/ 87 Interview with Michael Shrimpton, 14 October 2014, London. Ibid.

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development of EU law, the Secretary of State invested no effort, beyond a rather bland letter refusing residence. According to Shrimpton, not showing up and ignoring the plaintiff’s submitted skeleton argument reflected a common tactic: the Secretary of State hoped the case would be adjourned, to save time and prepare a stronger defense.88 This tactic proved to be a major mistake in this particular case, however. Shrimpton was not pleased with this absence at all. From his referral ruling it is clear that he was quite upset – if not outraged – by the defendant’s attempt to adjourn the case, as he also confirmed at our interview.89 Paragraph 6 of Mr. Shrimpton’s decision reads as follows: ‘Whilst it is a matter of regret that the Secretary of State has gone unrepresented today, it is not a matter for me. I must take the case as I find it and if one party chooses to absent himself from hearing then so be it. I say no more.’ It takes a ‘brave judge’ to write like this.90

‘This isn’t a baby case, it’s a Catherine case’ After the hearing before the IAA on 23 April 2002, it took more than eighteen months for the case to be heard at the ECJ. In November 2003, Mrs. Chen’s legal team – Michael Barry, Ramby de Mello and Adrian Berry – travelled to Luxemburg for the oral hearing of the Full Court. Assignment of the case to the grandest composition unquestionably pointed to its huge legal significance for the development of EU law. Although Mrs. Chen wished to attend the hearing as well, she and Catherine were forced to remain in the United Kingdom because, their case pending, they only possessed a provisional single entry visa:91 another remarkable example of the United Kingdom’s failure to comply with EU law. ‘They were busy doing business’,92 Adrian Berry opined; not going to Luxembourg was not such a tragedy after all. Mrs. Chen stayed in close contact with her lawyers before and after the hearing. Between the proceedings before the IAA and the hearing in Luxemburg, the ECJ’s ruling in the Garcia Avello case had strengthened Mrs. Chen’s position: staying in one Member State with a passport of another could bring a person within the scope of EU law. Nonetheless, De Mello recalls that until the actual hearing, ‘I was wholeheartedly convinced that we would lose the case’.93 Berry, who was the junior member of the team, told us he was more optimistic. 88 91 92 93

89 90 Ibid. Ibid. Interview with Adrian Berry, 3 March 2014, London. Interview with Ramby de Mello, 18 October 2014, London. Interview with Adrian Berry, 3 March 2014, London. Interview with Ramby de Mello, 18 October 2014, London.

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De Mello feared that the Court would qualify the act of travelling to Northern Ireland to give birth as abuse of EU law – a position wholeheartedly endorsed by Sir Richard Plender, representing the British Crown at the ECJ.94 Secondly, he thought that his major point regarding Mrs. Chen’s derivative residence right, namely that she was dependent on Catherine, was artificial. Thirdly, De Mello doubted whether the ECJ would extend the Baumbast case law to a very young baby. ‘The whole idea of bringing this case within the scope of EU law was, at that time, completely out of the box,’ according to De Mello. ‘So, after having called Mrs. Chen on the day before the hearing, we [the legal team] had a bottle of wine in the evening and said to each other: “we’ve done our best, but we will get lynched tomorrow.”’ Yet the Commission also argued in favour of Catherine and Mrs. Chen. According to De Mello, the Commission’s representative contended that ‘we initially thought this was a baby case. But it was not a baby case, it was a Catherine case.’95 The Commission subsequently argued that Catherine would indeed have a right of residence in the United Kingdom under Directive 90/364/EEC, and submitted that Mrs. Chen had a sui generis derivative right of residence along the lines of the Baumbast case. The UK government submitted three arguments against Mrs. Chen and Catherine. It first contended, along with the Irish government, that the action was inadmissible because the case fell outside the material scope of EU law. According to both governments, neither Catherine nor Mrs. Chen had crossed any border and could therefore not benefit from any EU citizenship rights.96 For this qualification as a ‘wholly internal situation’, the United Kingdom specifically relied on the Saunders case,97 which involved a British national invoking free movement law against British measures restricting her free movement rights.98 According to Sir Richard Plender, representing the UK government, bringing the present case within the scope of EU law was an extension of EU citizenship to wholly internal situations, and hence a dramatic extension of the scope of EU law.99 The story of what is ‘crossborder’ and what is not has been at the heart of the EU’s federal balance of

94 95 96

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Conversations with Sir Richard Plender, 2011, Groningen and Sevenoaks. Interview with Ramby de Mello, 18 October 2014, London. Case C-200/02 Zhu and Chen [2004] ECR I-9925, para. 18. Sir Richard later departed from this approach: R. Plender, ‘Nationality Law and Immigration Law’, in R. Prender (ed.), Issues in International Migration Law (Brill Nijhoff 2015) 1. Case C-175/78 R v. Vera Ann Saunders [1979] ECR 1129. R. de Mello, ‘Oral submissions on behalf of the applicants’, 10 November 2003 (unpublished notes, on file with the authors), para. 11. Interview with Ramby de Mello, 18 October 2014, London.

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competences – before the ECJ started turning to citizenship as such and changing, as argued by Sarmiento and Sharpston,100 the whole logic of construing the connection with the material scope of EU law101 – and Chen definitely played a role in this.102 Secondly, the UK government argued, again along with the Irish government, that Catherine could not benefit from Directive 90/364 because Article 1(1) thereof only applies to nationals who have sufficient financial resources. This condition meant, the governments contended, that unlike Catherine, the national concerned must possess such resources personally.103 Finally, the United Kingdom argued that neither Catherine nor Mrs. Chen could rely on EU citizenship law because Mrs. Chen’s move to Northern Ireland with the aim of her child acquiring Irish nationality constituted an attempt to abuse EU law. As the citizenship provisions concerned were neither intended for nor served by attempts to circumvent the immigration and nationality laws of Member States, and Member States are entitled to prevent abuse of provisions of EU law, the claim must be rejected.104 ‘One must prevent the law from working not as intended’, according to Richard Plender.105 Ironically, Sir Richard – profoundly saddened by the case in which the ‘interests of the Crown’106 were violated through making the law ‘work not as it was intended’107 – was the mastermind behind Singh,108 which redefined free movement in the 1990s by seriously limiting the Member States’ discretion in this field by allowing returning Member State nationals with third-country national family members to benefit from EU free movement of persons law, thus disapplying national regulations. If Singh is not ‘abuse’ – and by the time of the hearing it was clear that it was not – than Chen cannot possibly be abuse either. The Irish government additionally advanced an argument based on Catherine’s age. Since Catherine was not factually capable of exercising her right to D. Sarmiento and E. Sharpston, ‘European Citizenship and Its New Union: Time to Move On?’, in D. Kochenov (ed.), EU Citizenship and Federalism: The Role of Rights (Cambridge University Press 2017). 101 K. Lenaerts, ‘“Civis europaeus sum”: From the Cross-Border Link to the Status of Citizen of the Union’ (2011) 3 Online Journal on Free Movement of Workers in the European Community 6, 18. 102 D. Kochenov, ‘Annotation of Case C-135/08, Rottmann’ (2010) 47 CMLRev 1831. 103 104 Case C-200/02 Zhu and Chen [2004] ECR I-9925, para. 29. Ibid., para. 34. 105 106 Conversations with Sir Richard Plender, 2011, Groningen and Sevenoaks. Ibid. 107 Ibid. 108 Case C-370/90 R v. Immigration Appeal Tribunal and Surinder Singh, ex parte Secretary of State for Home Department [1992] ECR I-4265. 100

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move and choose a place to live independently, the government argued, she could not be regarded as a person to which Directive 90/364 granted any rights. More generally, Catherine could not invoke any right of movement or residence under EU law for this reason.109 De Mello made the oral submissions before the Court, which were based on two major points largely in response to the Irish and UK government’s contributions. De Mello first contended that Catherine’s case fell within the personal scope of EU law because all Member State nationals ‘wore the hat of EU citizenship irrespective of chronological age’.110 Whereas in his initial thoughts about the case and during the IAA proceedings De Mello had to construct the material link with EU law intuitively, at the hearing he leaned on Garcia Avello,111 Carpenter112 and Gambelli113 to illustrate that EU law covers situations in which a person resides in another Member State than the one of which he is a national.114 Moreover, it would be unreasonable to expect a national of Member State A born in Member State B to first leave Member State B before exercising his EU rights in Member State B.115 Second, at the hearing De Mello argued robustly against the abuse allegation. He emphasized that the Adjudicator had already found that Mr. Chen’s company had not been set up in connection with Mrs. Chen’s intention to reside in the United Kingdom, that the company actually existed and was commercially successful.116 He also contended that Mrs. Chen’s reason to give birth to Catherine could not, absent fraud, constitute an abuse of EU law in itself. She was lawfully present in the United Kingdom at that time and free to travel to Belfast.117 Finally, Mrs. Chen’s lawyers reiterated the dependency of Mrs. Chen on Catherine, but linked it to the doctrine of derivative rights in Baumbast. During the hearing, De Mello slowly but surely got the impression that the judges were on his side.118 Mrs. Chen’s legal team left the hearing in surprise and with much more confidence than they had had a few hours before. After the hearing, Richard Plender came to De Mello and told him: ‘Well done! 109

Case C-200/02 Zhu and Chen [2004] ECR I-9925, paras 41–42. Interview with Ramby de Mello, 18 October 2014, London. 111 Case C-148/02 Garcia Avello [2003] ECR I-11613, paras 27–28. 112 Case C-60/00 Mary Carpenter v. Secretary of State for the Home Department [2002] ECR I-6279, paras. 29 and 34. 113 Case C-243/01 Criminal proceedings against Piergiorgio Gambelli and Others [2003] ECR I-13031, para. 54. 114 De Mello, ‘Oral submissions on behalf of the applicants’, 10 November 2003 (unpublished notes), para. 8. 115 116 117 Ibid., para. 9. Ibid., para. 15. Ibid., paras. 17–21. 118 119 Interview with Ramby de Mello, 18 October 2014, London. Ibid. 110

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I think you’ve just won the case.’119 Moreover, when the barristers who had represented the Irish government met De Mello, Berry and Barry after the hearing in the robing rooms, they (jokingly, one would assume) told them: ‘Well chaps, when you ever come to fucking Ireland, we’re going to fucking break your legs!’120

AG Tizzano’s Opinion Plender’s prediction proved to be well founded. On 18 May 2004, Advocate General Antonio Tizzano delivered his Opinion. He rephrased the preliminary questions so as to narrow the legal issues down to two main questions of law: first, whether Catherine was entitled to a permanent right of residence under Directive 73/148 on the basis of the childcare and medical services she received in the United Kingdom, under Directive 90/364 on the basis of her economic self-sufficiency, or under Article 18 EC directly.121 Second, the learned AG turned to the possibility of a right of residence for Mrs. Chen herself.122 Finally, he considered the abuse argument raised by the UK government.123 Before these substantive questions, however, Tizzano had little difficulty in rejecting the UK and Irish objection of inadmissibility for lack of jurisdiction. Catherine’s Irish nationality sufficed to establish that the case was not purely internal to UK law.124 Turning to the Irish objection that Catherine’s youth and lack of physical and mental independence allegedly prevented her from relying on EU free movement and citizenship law, Tizzano rejected this argument in its entirety: the Irish standpoint confused the capacity of a person to be the subject of rights (i.e. legal personality) and the capacity of that person to take action which produces legal effects (i.e. legal capacity).125 Moreover, the reception of services would be violated if very young persons, who are likely to be the recipients of various health and childcare services, were not entitled to rely on those provisions.126 As regards the existence of a concrete right of residence for Catherine, Tizzano first rejected De Mello’s reliance on Directive 73/148. Although the childcare and medical services Catherine received brought her within the 120

Ibid. Case C-200/02 Zhu and Chen [2004] ECR I-9925, Opinion of AG Tizzano, paras. 19, 20 and 25. 122 123 124 125 Ibid., para. 25. Ibid., para. 108ff. Ibid., para. 33–34. Ibid., para. 43. 126 Ibid., paras. 47–49. 121

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scope of the Directive, Catherine could only invoke Directive 73/148 to claim a temporary residence right for the duration of her childcare and medical services.127 A permanent right of residence could, however, be conferred on Catherine on the basis of Article 18 which grants her, as a citizen of the EU, the right freely to move and reside throughout the Union within the limitations and conditions of the Treaty and secondary law. These conditions are codified in the aforementioned Directive 90/364, and were, according to the AG, manifestly met in Catherine’s case.128 In response to the UK and Irish government’s submission that Catherine did not actually ‘in her own right’ possess and/or earn sufficient resources, Tizzano rightly contended that the wording of the Directive did not offer any support for this interpretation, as it explicitly speaks of ‘having’ sufficient resources.129 As regards Mrs. Chen’s right to rely on Catherine’s right, Tizzano did find a derivative right for Mrs. Chen along the Baumbast lines, repeating the ECJ’s recognition that ‘where children have the right to reside in a host Member State, EU law entitles the parent who is the primary carer of those children . . . to reside with them in order to facilitate the exercise of that right.’130 Tizzano added that a denial of that right would contravene the principle of respect for the unity of family life as protected by Article 8 European Convention on Human Rights.131 Finally, the Advocate General also persuasively dismissed the UK government’s abuse argument. An abuse of law requires an underlying combination of objective circumstances which indicate that despite formal observance of EU law, the person who invokes the relevant provision of EU law betrays their spirit and scope by relying on them.132 Mrs. Chen took legitimate advantage of the citizenship rules by seeking an objective which EU citizenship upholds, namely a child’s right of residence.133 The UK government’s argument would ultimately entail that the objection of abuse could be raised in virtually all cases of intentional acquisition of nationality, which would subsequently lead to the conclusion that the enjoyment of EU citizenship rights would be dependent on the condition that nationality was acquired involuntarily.134 In itself, this conclusion would manifestly violate the principle that the recognition of the nationality of another Member State may not be subject to additional conditions.135

127

128 129 Ibid., para. 61. Ibid., paras. 65–67. Ibid., paras. 68–70. Ibid., para. 91, referring to Case C-413/99 Baumbast [2002] ECR I-7091, para. 75. 131 132 133 134 Ibid., para. 94. Ibid., para. 114. Ibid., para. 122. Ibid., paras. 124–27. 135 Ibid., para. 128. 130

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The Judgment of the Court On 19 October 2004, more than four years after Catherine’s birth and 2.5 years after Michael Shrimpton’s reference, the ECJ spoke. In a relatively short judgment, the Court followed the AG on all points. Like AG Tizzano, the ECJ rejected the UK and Irish governments’ assertion that the matter was purely internal to UK law, referring to Garcia Avello to conclude that Catherine’s Irish nationality established a sufficient link with EU law.136 Moreover, the Court dismissed Catherine’s youth as irrelevant: it established that the capacity of a person to be the holder of rights cannot be made conditional upon the attainment of the age prescribed to acquire the legal capacity to exercise those rights personally.137 The Court then dismissed De Mello’s reliance on Directive 73/148 as the reception of services can indeed not serve as a basis for a permanent right of residence. The Court specifically referred to Article 4(2) of the Directive which explicitly restricts the application of the Directive in this regard.138 However, again closely following the AG’s reasoning, the Court found that Catherine could rely on her fundamental status as a citizen of the European Union. The conditions for a right of residence on the basis of this status as laid down in Article 1(1) Directive 90/364 were, so the Court reasoned, undisputedly met,139 as Catherine had both health insurance and sufficient resources, provided by her mother, for her not to become a burden on the social assistance system of the United Kingdom.140 For the purposes of Catherine’s right of residence, lastly, the Court dismissed the UK government’s reliance on the doctrine of abuse. The Court briefly stated that it is for the Member States to lay down the conditions for the acquisition of their nationalities and that other Member States may not impose additional conditions for their recognition.141 Having established Catherine’s right of residence, the ECJ quickly dissolved De Mello’s dependency argument along the lines of the Advocate General, repeating that ‘dependency’ for the purpose of the Directive 90/364 must be characterized as a situation in which a family member is dependent on the material support of another family member.142 The Court did, however, grant Mrs. Chen a derivative right of residence based on the Baumbast reasoning. According to the Court, the enjoyment of a

136 138 140 142

137 Case C-200/02 Zhu and Chen [2004] ECR I-9925, para. 19. Ibid., para. 20. 139 Ibid., para. 23. As would be the conditions based on the current Directive 2004/38. 141 Case C-200/02 Zhu and Chen [2004] ECR I-9925, para. 28. Ibid., paras. 34–39. Ibid., paras. 43–44.

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young child’s right of residence necessitates the child’s entitlement to be accompanied by his or her primary carer.143 Leaving no discretion for the IAA to decide the case, the Chen case was effectively ended by the ECJ’s ruling.

conclusion The story retold in this chapter had two winners. First, it is the Chinese family and their Irish baby who managed to escape the humiliating and abusive effects of Chinese one-child policy laws. Secondly, it is the European Union: EU citizenship law became more convincing and coherent as a result. The same story also boasts two losers. The first, mostly symbolic, is the idea of having a common-sense debate about immigration on the basis of facts: the people – the Irish people in this particular case, but they are far from uniquely prejudiced in this respect – do not want to. Immigration policy is about tilting at windmills with Quixotic determination, rather than resolving outstanding issues. To say that the Irish made fools of themselves would be incorrect; the fact that the nation was misled by the unscrupulous media that deployed all the wrong arguments144 in its pretense of a debate leading to the referendum to change the national law does not mean too much – this is how democracies work, after all.145 The second loser is the idea of adhering to the rule of law in the United Kingdom: the case led to the current (informal) practice established in the United Kingdom, which requires the lowest immigration courts to abstain from complying with EU law in making references to the Court of Justice (ECJ) under Article 267 TFEU.146 As a result, we can expect numerous claimants to have been barred from receiving justice in the United Kingdom, left with no access to the ECJ, the only court empowered to clarify the meaning of EU law. Without Adjudicator Shrimpton’s determination (and profound irritation), Mrs. Chen could also have been denied justice by the British system. Finally, the story confirms two well-known facts about lawyers. First, that lawyers take whatever side they are paid to argue for, their previous record notwithstanding: Sir Richard Plender, the counsel for the Crown, de facto argued against a crucial principle of EU law which was partly of his own 143 144

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Ibid., para. 45. This can be checked against Ali Almossawi’s comic book: A. Almossawi (w) and A. Giraldo (i), An Illustrated Book of Bad Arguments (2nd ed., The Experiment 2013). J. Mueller, ‘Democracy and Ralph’s Pretty Good Grocery: Elections, Equality, and the Minimal Human Being’ (1992) 36 American Journal of Political Science 983. Interview with Adrian Berry, 3 March 2014, London.

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making, as established in Singh.147 This truth can be referred to as a ‘wellknown’ truth. Second – and this is probably less well known or at least a less popular truth – not many academic lawyers, most regrettably, care about the facts of the cases they comment on. The Chen case is one of the most popular; it elicited a true avalanche of notes.148 Yet virtually none of those notes reported the facts correctly or in full. We are not arguing that you would have to speak with the Adjudicator, Michael Shrimpton or Ramby De Mello and Adrian Berry, the Chen family’s representatives in Luxembourg, to write a good case note on Chen; not at all, as long as other sources of getting to the facts are available. Nonetheless, the facts are important – and it is worth taking the time to remind oneself of this simple fact constantly.149 Facts make the case, and checking the facts makes all the sense in the world. This simple truth applies as much to academic lawyers as it does to the ECJ, we might add.150

147 148

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Case C-370/90 Singh [1992] ECR I-4265. C. Barnard, ‘Of Students and Babies’ (2005) 64 Cambridge Law Journal 560; M. Gautier in (2003) (4) Revue des affaires européennes 673; E. Bergamini, ‘Il difficile equilibrio fra riconoscimento del diritto alla libera circolazione, rispetto della vita familiare e abuso del diritto’ (2006) Il diritto dell’Unione Europea 347; J.-Y. Carlier in (2005) 42 CMLRev 1121; B. Hofstötter, ‘A Cascade of Rights, or Who Shall Care for Little Catherine? Some Reflections on the Chen Case’ (2005) 30 European Law Review 548; U. Hühn, ‘Unionsbürger aus dem Reich der Mitte’ (2005) European Law Reporter 12; D. H. King, ‘Chen v. Secretary of State: Expanding the Residency Rights of Non-Nationals in the European Community’ (2007) 27 Loyola of Los Angeles International and Comparative Law Review 291; B. Kotschy, ‘Citoyenneté. Arrêt “Bébé Chen”‘ (2004) (3) Revue du droit de l’Union européenne 589; B. Kunoy, ‘A Union of National Citizens: the Origins of the Court’s Lack of Avant-Gardisme in the Chen Case’ (2006) 43 CMLRev 179; M. Luby, ‘La citoyenneté européenne: Quand les mots ont enfin un sens!’ (2005) 94 Petites affiches. La Loi / Le Quotidien juridique 8; P. Robert in (2004) Revue du droit des étrangers 645; G. Perin, ‘In margine alla sentenza Chen: il diritto di circolazione dei familiari di cittadini comunitari’ (2005) Diritto Immigrazione e Cittadinanza 89; A. Tryfonidou, ‘C-200/02, Kunqian Catherine Zhu and Man Lavette Chen v. Secretary of State for the Home Department: Further Cracks in the “Great Wall” of the European Union?’ (2005) 11 European Public Law 527; H. Verschueren, ‘Gezinshereniging met EU-burgers door derdelandsonderdanen. Twee opmerkelijke arresten van het Europese Hof van Justitie in de zaken Akrich en Zhu en Chen’ (2005) Tijdschrift voor vreemdelingenrecht 113; and K. Vanvoorden in (2005) 12 Columbia Journal of European Law 305. See, also, M. Olivas and D. Kochenov, ‘Case C-34/09 Ruiz Zambrano: A Respectful Rejoinder’ (2012) Public Law and Legal Theory Series Paper 2012-W-1 (University of Houston). See, on the facts in Case C-434/09 McCarthy [2011] ECR I-3375 as (mis)reported by the ECJ, N. Nic Shuibhne, ‘(Some of) the Kids Are All Right: Comment on McCarthy and Dereci’ (2012) 49 CMLRev 349.

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12 Ruiz Zambrano’s Quiet Revolution Four Hundred and Sixty-Eight Days That Made the Immigration Case of One Deprived Worker into the Constitutional Case of Two Precarious Citizens

francesca strumia introduction Gerardo Ruiz Zambrano was a diligent worker and social security contributor failed by the rules of the Belgian welfare state. This is an often forgotten detail in accounts of the renowned case, in which the Court of Justice of the European Union (CJEU) found that denying a residence and work permit in Belgium to a Colombian father would impermissibly interfere with the substance of the European citizenship of his Belgian-born children.1 Commentators have characterized Mr. Zambrano as an asylum seeker turned irregular migrant who had to rely on his status as family member of two European citizens to regularize his position in Belgium.2 In fact, when the Tribunal du Travail referred the case to the CJEU, Mr. Zambrano was neither an asylum seeker nor an irregular migrant anymore. He held both a residence and a work permit in Belgium.3 In order to collect the unemployment benefits he had paid for, however, he needed to prove that he had been regularly resident and entitled to work in Belgium for at least 468 days during the time he had worked for a Belgian company between 2001 and 2006.4 It is in this latter respect that the European citizenship of his children was to make a difference. Albeit partly lost in restatements, this social security story has been determinative for both the procedural history and the substantive outcome of the

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Case C-34/09 Gerardo Ruiz Zambrano v Office national de l’emploi (ONEm) EU:C:2011:124. See e.g. Kay Hailbronner, Daniel Thym, ‘Annotation of Case C-34/09’, [2011] 48 CMLRev 1253; Ilyola Solanke, ‘Using the Citizen to bring the Refugee in: Gerardo Ruiz Zambrano v Office National de l’Emploi (ONEM)’ [2012] Modern L. Rev. 75; Michael Olivas, Dimitry Kochenov, ‘Case C-34/09 Ruiz Zambrano: a Respectful Rejoinder’ [2012] University of Houston Public Law and Legal Theory Series, 2012-W-1. 4 Zambrano, supra at n. 2, } 32. Id., } 33.

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case. Recuperating this story is the first result of this chapter’s attempt at uncovering the many narratives that underpin the Zambrano case.5 Two narratives ultimately emerge in the case: an avant-garde constitutional case on the citizenship of two children who just escaped statelessness, and a well-presented immigration case on the claims of a migrant who was as in need as he was deserving. Clarifying the respective roles of these narratives for the outcome of the case allows for important and novel considerations. First, on the role of the Court: an adjudicator perplexed about its own function, which tendered a strong answer to an easy immigration question while providing only a light-touch answer to a hard constitutional question. Second, in legal terms, the case bears relevance for the hundreds of thousands of asylum seekers and refugees who are potentially becoming regular inhabitants of Europe.6 Third, in political terms, the case highlights the role of European citizenship in mounting rights against powers in the context of heightened debates on immigration.7 In these three senses, the chapter goes beyond findings of comments on the case to date, which have focused on the reach of fundamental rights protection and on the boundaries of purely internal situations.8

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The interview with Mr. Pierre Robert, the lawyer from Dayez Avocats Associés who represented Mr. Zambrano, and conversations with Tim Corthaut, auditeur at the Conseil d’État and Sarah Lambrecht, reféréndaire at the Cour Constitutionnelle were crucial for the author to read in between the lines of the documents of the case, and helped set the record straight. Interview with Mr. Pierre Robert, Brussels, 5 June 2015; conversation with Tim Corthaut (speaking in his personal and academic capacity), Brussels, 5 June 2015; conversation with Sarah Lambrecht, Brussels, 5 June 2015. In the EU28 626,710 applications for asylum were submitted, in aggregate, in 2014. The aggregate figure for just the first three months of 2015 is 202,950 (Eurostat Data). See Francesca Strumia, ‘Walking the Blurry Line in EU Immigration: European Citizenship and its Demoicratic Bridge between the Member States’ Power to Exclude and the Third Country Nationals’ Right to Belong’, under submission. In the former sense see Zambrano, supra n. 2, Opinion of Advocate General Sharpston }} 151–177 (inspired by Zambrano’s situation to suggest that fundamental rights protection should be based on EU competence); Koen Lenaerts, ‘Civis Europeus Sum: from the Cross-Border Link to the Status of Citizen of the Union’ (2011) 3 FMW-Online Journal on Free Movement of Workers within the European Union 6; Robert Schütze, ‘Three Bills of Rights for the European Union’ (2011) 30 Yb Eur L 131, 140–141; A. Von Bogdandy, M. Kottmann, C. Antpöhler, J. Dickschen, S. Hentrei, M. Smrkolj, ‘Reverse Solange-Protecting the Essence of EU Fundamental Rights against EU Member States’, [2012] C. Mkt L. Rev. 489; Chiara Raucea, ‘Fundamental Rights: The Missing Pieces of European Citizenship?’ (2013) 14 German Law Journal 2021; Daniel Thym, ‘Towards Real Citizenship? The Judicial Construction of Union Citizenship and Its Limits’ in Judging Europe’s Judges: the Legitimacy of the Case Law of the European Court of Justice, edited by Maurice Adams, Henry De Waele, Johan Meeusen & Gert Straetmans (2013) (suggesting that in the Zambrano case law citizenship is being used as an alternative to fundamental rights); in the latter sense see Kay Hailbronner and Daniel Thym,

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The first section revisits the factual and legal background of the case. The second section considers how the CJEU judgment transformed some of these elements, with the effect of delinking the two main narratives (constitutional and immigration) in the story. It argues that the Court focused explicitly on the constitutional narratives, while relying implicitly on the immigration one. The third section reflects on the implications of this disaggregating strategy for the role of the Court. The final section focuses on implications for the legal and political legacy of the case.

the background: a perfect combination in law and fact The combination of factual and legal elements in this case resulted in an immigration case – Mr. Zambrano was ultimately looking for recognition of his right to reside and work in Belgium – with a constitutional twist; recognition of such a right came to depend on protection of the supranational citizenship of his two Belgian-born children.

In Fact Mr. Zambrano was a Colombian asylum seeker turned irregular migrant after Belgian authorities rejected his application for asylum when he first entered Belgium in 1999. In this respect, he was one of many. Since 1958, Colombia has been ravaged by a civil war that has claimed 220,000 lives and caused the internal displacement of more than five million people.9 Executions of civilians at the hand of the military occurred between 2004 and 2008 under the government of President Uribe, and widespread violence at the hand of guerrilla groups and paramilitaries continues to date.10 Numerous Colombians fled to Europe, escapes which were facilitated until 2000 by the fact that Spain exempted several Latin American countries from visa requirements.11

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supra n. 3; Dimitry Kochenov, ‘A Real European Citizenship: A New Jurisdiction Test: A Novel Chapter in the Development of the Union in Europe’ [2011] 18 Col J Eur L 55. Ever since 1985. See Human Rights Watch, ‘World Report 2014: Colombia’ at www.hrw.org/ world-report/2014/country-chapters/colombia (accessed 3 July 2015). Id. Ever since 2012 peace negotiations have been ongoing between President Santos’ government and the Revolutionary Armed Forces of Colombia (FARC) and National Liberation Front (ENL). Interview with Mr. Pierre Robert, supra n. 6. A visa requirement was reintroduced in 2000, however has been lifted again just recently. See http://elpais.com/elpais/2015/06/08/opinion/ 1433789668_587248.html (accessed 8 July 2015). Mr. Zambrano held a Belgian visa. Zambrano supra n 2, at } 14.

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Several of these fleeing Colombians ended up in Belgium in the late 1990s and up until the early 2000s.12 Ruiz Zambrano was one of them. He and his wife left Colombia after having been subject to extortion demands backed by death threats and after having suffered the abduction of their oldest son.13 While some of the Colombian asylum seekers were granted refugee status, Ruiz Zambrano belonged to the sizable group of those who were denied the latter status but whose removal order nonetheless included a non-refoulement clause.14 He was, as a result, in a legal grey zone: irregularly present in Belgium, but protected from expulsion.15 Despite his several attempts, Belgian authorities would not legalize his residence situation.16 Second, Mr. Zambrano was the father of two European citizen children born in Belgium pending the regularization of his immigration status.17 In this respect, he was one of many immigrants who had Belgian-born, Belgiannational children and who tried to use this to regularize their residence status.18 So common was this situation in Belgium that the Conseil du Contentieux des Étrangeres at one point defined Belgian children as ‘its core business’.19 Immigrant parents of Belgian children often attracted accusations of ‘legal engineering’ – Mr. Robert recalls having defended several Ecuadorean migrants in the 1990s in front of the Conseil d’État in 12

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According to data of the Colombian Ministry of Foreign Affairs, there were about 2,300 Colombians registered with Colombian authorities as living in Belgium in 2003, however 15,000 were estimated to live in Belgium at that date. See Myriam Bérubé, Colombia: in the Cross-Fire, Migration Policy Institute, 1 November 2005, www.migrationpolicy.org/article/ colombia-crossfire (accessed 12 September 2015). Zambrano, supra n. 2, Opinion of Advocate General Sharpston } 19. Zambrano, supra n. 2, at } 15; interview with Mr. Pierre Robert, supra n. 6. Non-refoulement obligations prevent a country from returning an asylum-seeker to a country where his/her life or freedom would be endangered, although they do not automatically translate in an obligation to admit. See Convention Relating to the Status of Refugees, Geneva 28 July 1951, art. 33, https:// treaties.un.org/doc/Publication/UNTS/Volume%20189/volume-189-I-2545-English.pdf (accessed 12 September 2015). Policy would subsequently change to deny any protection to Colombians, however for a short while after implementation of directive 2004/83 (Qualifications Directive), Belgium extended subsidiary protection to Colombian migrants who would have otherwise been covered by a non-refoulement clause. Interview with Mr. Pierre Robert, supra n. 6. Zambrano, supra n. 2, at }} 16, 21, 22. Diego, born in 2003, and Jessica, born in 2005. Zambrano supra n. 2, at }} 19 and 22. Interview with Mr. Pierre Robert, supra n. 6. Id. The Conseil du Contentieux des Étrangeres (Council for Alien Law Litigation) was introduced in 2007 and is an independent administrative jurisdiction competent to hear any appeals against decisions of the Commissariat général aux Réfugiés et aux Apatrides as well as against individual decisions in application of the 1980 Law on Foreigners (see infra n. 40). See www.rvv-cce.be/fr/cce/apropos-conseil (accessed 3 July 2015).

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this respect.20 This was the case also for Zambrano, whose initial application for residence as the parent of a Belgian child was rejected because he would have ‘engineered’ the child’s acquisition of Belgian nationality.21 Third, and most important for the unravelling of the case, Zambrano was a worker who, despite his irregular immigration status, was registered for and had regularly paid for social security contributions from 2001 to 2006.22 In this respect, he was one of a kind, because undocumented migrants cannot register for social security.23 Payment of contributions, however, was not enough to secure fruition of benefits. When Zambrano was dismissed from his post in 2006 due to the irregularity of his residence situation,24 in order to qualify for unemployment benefits, he had to evidence completion of at least 468 workdays in compliance with relevant laws on the residence and work of foreigners. While he had likely accrued close to 1,000 workdays in the five years he had worked for the Plastoria company, none of those technically counted, as he had not held a work permit.25 The Belgian social security administration had gladly taken Zambrano’s social security contributions, but once his job had been taken away, it would not pay the benefits towards which Mr. Zambrano had regularly contributed.26 This gave Zambrano a new legal claim distinct from the ones he had pending for regularization of his status in Belgium.27 This very claim, centring on the argument that Mr. Zambrano did not actually need a work permit in Belgium, would bring Zambrano’s case from the crowded log of the Conseil du Contentieux des Étrangeres to the more welcoming docket of the Tribunal du Travail.28 In Law The latter argument rested on the combination of three areas of law. First, an international law-compliant provision of Belgian nationality law: article 10 of 20 21

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Interview with Mr. Pierre Robert, supra n. 6. Zambrano supra n 2, at } 23. The Tribunal du Travail in its reference to the CJEU strongly opposes the latter characterization. See Tribunal du Travail de Bruxelles, judgment n. 08/ 001851 of 19 December 2008, at } IV. 4.1.1–4.1.3. Interview with Mr. Pierre Robert, supra n. 6. Zambrano supra n. 2, at } 20. This was the result of a glitch in the system whereby Mr. Zambrano’s employer was able to register him regularly for social security purposes. Interview with Mr. Pierre Robert, supra n. 6. 25 Zambrano supra n. 2, at } 27. Id., at } 33. Tribunal du Travail, supra n. 22, at } II.1–2. He was dismissed after an inspection of the Directorate General, Supervision of Social Legislation. Zambrano supra n. 2, at } 27. Interview with Mr. Pierre Robert, supra n. 6. Interview with Mr. Pierre Robert, supra n. 6. Zambrano had more than once appealed against the refusal of the immigration authorities to regularize his residence situation. Zambrano supra n. 2, at }} 29–31. Interview with Mr. Pierre Robert, supra n. 6.

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the Belgian nationality code provides that children born in Belgium acquire Belgian nationality if they would otherwise be stateless at any time before reaching the age of 18.29 Based on this provision, Diego and Jessica Zambrano acquired Belgian nationality, as well as the rights of European citizenship, at their respective births in 2003 and 2005.30 They were born just in time for these purposes: a 2006 amendment excluded from the scope of article 10 children who could acquire another nationality upon the parents undertaking a simple administrative step, such as registering them with the authorities of the country of origin.31 One is tempted to think that the amendment came as a response to the Zambranos’ saga; in fact, the Zambranos omitted to register their children with the Colombian embassy.32 However, the 2006 amendment had little to do with the Zambranos per se,33 but was rather a response to a widespread perception that migrants having children in Belgium were ‘abusing’ Belgian nationality law to regularize their status,34 a perception that the CJEU Chen case35 had only exacerbated.36 It is precisely the Chen case that brings in the second area of law that contributed to ‘make’ the Zambrano case – that is, EU law. Because of their timely births, the Zambrano children were European citizens. Under Chen, caretaking ascendants may derive a right of residence from their EU citizen children in order to protect the effectiveness of the rights of the latter.37 29

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Code de la Nationalité Belge of 28 June 1984 as amended, Justice 1984900065 of 12 July 1984, p 10100, art. 10. The provision is international law-compliant in the sense that an obligation for a state to grant nationality to children born on its territory who would otherwise be stateless exists under international law and is codified in the Convention on the Reduction of Cases of Statelessness, Aug. 30, 1961, available at www.unhcr.org/3bbb286d8.html (accessed 8 July 2015), art. 1, and in the European Convention on Nationality, Nov. 6, 1997, available at http:// conventions.coe.int/Treaty/EN/Treaties/Html/166.htm (accessed 8 July 2015), art. 6(2). Belgium was not however a party to either convention at the time of the Zambrano facts. See infra } IV.1. Zambrano supra n. 2, at }} 19 and 22. Loi du 27 Decembre 2006 portant des dispositions diverses, Moniteur Belge, 28 Decembre 2006, art. 380. Otherwise they may have acquired Colombian nationality; Zambrano supra n. 2, at } 19. Interview with Mr. Pierre Robert, supra n. 12. Conversation with Sarah Lambrecht, référendaire at the Belgian Constitutional Court, Bruxelles, 5 June 2015. Also see Bernadette Renauld, ‘Les Nouvelles Conditions d’Accés à la Nationalité’ [2007] Revue Belge de Droit Constitutionnel 19, 23. Chambre des Représentants de Belgique (Chamber of Representatives of Belgium), Doc. 2760/001 of 21 November 2006, www.lachambre.be/FLWB/PDF/51/2760/51K2760001.pdf (accessed 25 June 2015) at 249. See Dimitry Kochenov and Justin Lindeboom’s chapter in this book. Interview with Mr. Pierre Robert, supra n. 12. Also see case C-200/02 Kunqian Catherine Zhu and Man Lavette Chen v Secretary of State for the Home Department, EU:C:2004:639. Chen, supra n. 37 } 45–46.

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A difficulty remained, however: the right whose effectiveness had to be protected in Chen was the right to reside in a Member State other than the one of nationality.38 The Zambrano children had never moved anywhere and were residing in their country of nationality. In European jargon, theirs was a purely internal situation and thus beyond the scope of EU law. A third area of law could help to turn around the internal situation difficulty: Belgian immigration law. The 1980 Law on Foreigners expressly provided for extension to Belgian nationals of the family reunification rights with third-country national family members that non-Belgian EU nationals enjoyed in Belgium.39 This is another provision that was destined to take a restrictive turn shortly after the Zambrano case. However, once again, Zambrano’s situation was timely enough.40 Several Belgian immigration lawyers had already tried, in the aftermath of Chen, to rely on a combination of the Chen rule and the provisions of the Law on Foreigners to win regularization of status in Belgium for their third-country national clients who had Belgian children. The strategy yielded mixed results. Some municipalities initially accepted the argument, while several others increasingly rejected relevant applications on ‘legal engineering grounds’.41 Relevant cases began to flock to the Conseil du Contentieux des Étrangeres, together with gentle lawyerly nudges towards referring a question to the CJEU.42 Among these cases was Mr. Ruiz Zambrano’s action for annulment lodged in 2005 after his application to take up residence as the ascendant of a Belgian national was rejected.43 None of these cases would go very far as the Conseil du Contentieux des Étrangeres made it clear that it would not refer questions to the CJEU.44 This would be the end of the story for several migrants, including some 15 other Colombians Mr. Robert was assisting at the time, who, like Mr. Zambrano, had been denied asylum, granted a nonrefoulement clause, and in some cases had had Belgian-born, Belgian-national

38 39

40 43 44

Id. Loi du 15 décembre 1980 sur l’accès au territoire, le séjour, l’établissement et l’éloignement des étrangers en ce qui concerne les conditions dont est assorti le regroupement familial, Moniteur Belge of 31 December 1980 (‘Law on Foreigners’), former art. 40(6), current art. 40 bis. 41 42 See infra n. 112. Interview with Mr. Pierre Robert, supra n. 6. Id. Zambrano, supra n. 2, } 22–23 and 30–31. The CCE has indeed decided that it is not a court of last instance as an appeal on points of law is possible before the Conseil d’Etat, and on that ground routinely refuses to refer to the ECJ; conversation with Tim Corthaut supra n 6. Also see in this respect Conseil du Contentieux des Étrangeres, 24 June 2010, nr. 45 395, point 2.2.2.2; see also T. Corthaut, ‘Help! Een prejudiciële vraag? – Een eerstehulpdoos bij prejudiciële vragen aan het Hof van Justitie’, in N. Cariat and J. Nowak (eds.), Le droit de l’Union européenne et le juge belge / Het recht van de Europese Unie en de Belgische rechter, Bruylant, 2015, p. 114.

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children.45 But not for Mr. Zambrano who, thanks to his social security litigation, would find at the Tribunal du Travail another opportunity to push through the combination of international, national and EU law, which could support his case.

The Road Not Taken (by Other Cases): The Tribunal du Travail What made the Zambrano case was that it landed on the table of the Tribunal du Travail. Ironically, had the Belgian authorities simply paid Mr. Zambrano his welldeserved unemployment benefits rather than fretting to change nationality and immigration laws, the Zambrano case would have never happened. Similarly, the Belgian authorities missed the point in their attempts to mute the Zambrano litigation. In April 2009, they extended to Mr. Zambrano a provisional residence permit.46 Later that same year, they granted him definitive regularization in the context of a collective procedure addressed to parents of Belgian nationals.47 However, grant of a residence permit, or even a work permit, could not solve the problem, as, in order to obtain his unemployment benefits, Mr. Zambrano needed retroactive recognition of the regularity of his workdays between 2001 and 2006.48 Such retroactive recognition would have to depend on the fact that as ascendant of a Belgian and EU national, at least since his second child was born in 2003, Zambrano had not needed a residence or work permit in Belgium. This involved a question on the reach of European citizenship: does the latter imply, for the third-country national parent caretaker of a minor citizen, a right to work and reside in the Member State of residence and nationality of the citizen child? On 30 January 2008, the Tribunal du Travail dared to ask the CJEU precisely that question, one that the Conseil du Contentieux des Étrangeres would not. In its analysis, the Tribunal du Travail weaved the factual and legal elements of the case to render a vivid image of Mr. Zambrano as the ‘model’ migrant. He was a vulnerable asylum seeker who both had to flee violence in his country of origin and was covered by a non-refoulement clause in his host country.49 He was also a responsible father, who had suffered severe posttraumatic syndrome when his first child had been abducted in Colombia.50 He had no choice as to where to conduct and further expand his family life,51 45 46 47 49

Interview with Mr. Pierre Robert, supra n. 6. Id. Also see Zambrano, supra n. 2, } 32–33. Interview with Mr. Pierre Robert, supra n. 6. Tribunal du Travail, supra n. 22, } III.2.3.

48 50

Id. Id. } III.2.3.

51

Id. } IV 4.1.1–4.1.3.

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but had always made sure to provide sufficiently for his children.52 Finally, he was a diligent worker, who had managed to obtain an open-ended contract with a Belgian company,53 had regularly paid social security, and had never presented a burden for Belgian public finances.54 At the same time, the Tribunal du Travail de-emphasized the importance of the internal nature of Zambrano’s situation both in terms of the appropriateness of a preliminary reference and in terms of the applicability of EU law. With regard to the former, it relied on CJEU precedents to conclude that a preliminary reference may be needed even in an internal situation, if a Member State has chosen to extend the same rights that EU nationals enjoy on its territory to its own nationals, as was the case in Belgium under article 40 of the Law on Foreigners.55 With regard to the latter, it hinted that the internal nature of the situation did not matter as much if one considered the point of view of European citizenship rather than the point of view of free movement.56 The way the European citizenship question ripened in Zambrano’s complex situation and the way it was presented by the Tribunal du Travail made for a perfect factual and legal storm looming on the CJEU’s horizon. In the eye of that storm one would see a migrant who was both in need and deserving, two vulnerable minor European citizens who had been rescued from statelessness, and a credible European citizenship argument grounded in a smooth combination of national, international and EU law. One could even forget that this was, after all, a purely internal situation.

transformation at the cjeu In the end, the internal situation doctrine was not forgotten. Advocate General Sharpston, in her opinion, closely examined the scope and meaning of European citizenship, concluding that the situation of the Zambrano children was by its nature not purely internal, and that article 21 TFEU encompasses a free-standing right of residence, regardless of the exercise of movement.57 The purely internal nature of the situation was also a central element at the CJEU hearing, where the Member State governments and the European Commission opposed the extension of EU law to cover a situation like 52 55

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53 54 Id. } III.8. Id. } III.7. Id. } III.15–16. Id. } IV 4.2.2–4.2.3. (referring to Government of Communauté française and Gouvernement wallon v Gouvernement flamand C-212/06; reference is also made to Dzodzi C-197/89 and MRAX C-459/99, see } IV 3.2.1.1). Id. } IV 3.2.1.1. Zambrano, supra n. 2, Opinion of Advocate General Sharpston }} 89–101.

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Mr. Zambrano’s, while some of the judges seemed sceptical as to the relevance of the latter’s internal character.58 This did not lead to a bold denunciation of the internal situation, but rather to a dismissive treatment in the judgment. The court reformulated the referred questions in a way that absorbed the purely internal issue into the broader context,59 and proceeded instead on citizenship as a fundamental status. If sidestepping the internal situations doctrine was acclaimed to be the revolution in this case,60 this was a quiet revolution. What is possibly more telling is the way the Court performs two fundamental transformations in its sevenparagraph reasoning on the case.61 A first transformation is in the characters of the story. At the CJEU, the main characters are the two who had been left in a penumbra at the national level – the Zambrano children. This may seem obvious, as the question for the CJEU is one of European citizenship, and the European citizens of this story are the children. However, the Tribunal du Travail was very explicit in that the question of the citizenship and non-discrimination rights of the children was entirely functional to the determination of whether their father could collect his unemployment benefits.62 Regularization of the father’s social security situation would in turn reflect onto the rights of the children in terms of their access to medical insurance and other family benefits.63 The central dilemma that European citizenship had been called to solve was Mr. Zambrano’s social security problem. At the CJEU level, the central concern is rather the Zambrano children’s ability to remain in the EU. This ability would be impaired if their father were not entitled to reside with them and to work in order to provide for their maintenance.64 The second transformation relates to the triggering of a European citizenship question. The focus of the preliminary reference was Mr. Zambrano and whether his children’s European citizenship entitled him to access the Belgian labour market.65 In the CJEU judgment, the focus rather falls on the origin of 58

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Zambrano, supra at 2, hearing notes, } 44–54. Robert recalls that one of the judges asked the Belgian government representative whether it would have made a difference if the Zambranos had brought their children every year to Eurodisney in France or once to see the tulips in the Netherlands. Interview with Pierre Robert, supra at n. 12. Zambrano, supra n. 2 } 36, This is considered one of the most innovative aspects of the judgment. See e.g., Kochenov, ‘A Real European Citizenship’, supra n. 9; Lenaerts, supra n. 9. See Niamh Nic Shuibne, ‘Seven Questions for Seven Paragraphs, [2011] 36 ELR 161. 63 Tribunal du Travail, supra n. 22, } IV.4.2.3. Id. } IV.4.3.5. Zambrano, supra n. 2, } 44. Tribunal du Travail, supra n. 22, } IV, 4.3.5. The Tribunal also refers to the legal engineering argument but only to dismiss it.

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the Zambrano children’s European citizenship. The Court recalls the rule in article 10 of the Belgian Code on Nationality and emphasizes that Colombia would not, per se, have recognized the children as its nationals.66 The threat of statelessness surfaces in the CJEU’s survey of the background facts and implicitly reinforces the Court’s conclusion that the Zambrano children ‘undeniably enjoy’ the status of European citizenship. In an extended syllogism, the Court suggests that the Zambrano children enjoy such status because all EU nationals are EU citizens, the Zambrano children are Belgian nationals, and it is up to Belgium to determine who their nationals are.67 In between the lines, through the implied reference to statelessness, the court also adds that the Zambrano children are Belgian nationals for good reason. The Court’s approach resonates to some extent with that adopted years before in another seminal EU citizenship case. In Trojani,68 the Court eschewed the question of whether Mr. Trojani had a right under EU law to reside in Belgium, despite insufficient resources. Instead, it relied on the fact that he was lawfully resident in Belgium on the basis of Belgian national law.69 The Court was therefore free to unleash its reasoning on non-discrimination of lawfully resident European citizens.70 In Zambrano, the Court similarly downplays the question of whether the Zambrano children have EU law rights in their state of nationality by focusing on the fact that, as a direct consequence of a determination of Belgian law, they undeniably enjoy the status of European citizens.71 In addition, Belgian law, as we learned in Rottmann, cannot have the effect of depriving the children of EU citizenship rights that the same Belgian law has conferred upon them through nationality.72 The European citizenship question becomes a Rottmann-inspired one on what amounts to deprivation of the substance of European citizenship.73 Eventually these two transformations result into the disjoining of two layers that coexisted in the background story of the case: a first layer concerns a needy and deserving migrant deprived of social security; a second layer focuses on two vulnerable minor citizens threatened with deprivation of any citizenship

66 68

69 71

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67 Zambrano, supra n. 2, } 19. Zambrano, supra n. 2, } 40. Case C-456/02 Michel Trojani v Centre public d’aide sociale de Bruxelles (CPAS) EU: C:2004:488. 70 Id., } 37. Id., } 40–44. Sadl and Hink’s network analysis of EU citizenship case law finds that chains of references to nondiscrimination and fundamental status result in circumventing the limits of EU competence in EU citizenship cases. Urska Sadl and Sigrid Hink, ‘Precedent in the Sui Generis Legal Order: a Mine Run Approach’ [2014] 20 European Law Journal 544, 557 and 560. See Niamh Nic Shuibne, ‘(Some of) the Kids are all Right’, [2012] 49 CMLRev 349, at 364–66. Zambrano, supra n. 2, } 42. Also see Nic Shuibne, ‘(Some of) the Kids’ supra n. 73, at 352.

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at first (due to the risk of statelessness), and with deprivation of the enjoyment of the substance of European citizenship then (should their parents be expelled from Belgium). Rejoining these two layers yields some considerations on the role of the Court and the legacy and political implications of the Zambrano case for European citizenship doctrine. It also signals an underacknowledged rationale of the judgment: European citizenship is engaged to avoid deprivation for a class of migrants who are both deserving and particularly deprived. The letter of the judgment suggests that European citizens cannot be deprived of the substance of their rights. The background story suggests that the substance of European citizenship becomes relevant in situation involving vulnerable and yet deserving citizens who have already been deprived at so many levels: of the protection of their country of origin, of security of status, of hard-earned social security for themselves and their families. Exceptional deprivation in other words activates the (exceptional) doctrine of European citizenship’s substance. This may shed novel light on the legal and political relevance of the case.

considerations on the role of the court The mixed migration and citizenship stories in the background of the Zambrano case make for a hard constitutional case disguised as an easy immigration one. This leads to a judgment that mixes different levels of reasoning. While the transformations that occur at the CJEU bring the constitutional questions in the case to the forefront (how far does the European citizenship of the children reach) and leave the immigration ones behind the veil (what does a vulnerable and hard-working migrant as Mr. Zambrano deserve), the judgment ultimately offers a sound response to the latter (Mr. Zambrano deserves to stay and work) while treating the former evasively (as far as its ‘substance’ goes). Sensitivity to the facts seems to drive, in other words, the Court’s interpretation of EU law in the case. This confuses the Court’s role. The Court has reiterated several times in the case law that cooperation with national courts is the thrust of the preliminary reference procedure.74 Yet, in Zambrano, it seems tempted to adjudicate on the facts, thereby stepping to some extent into the shoes of the national court.75 Additionally, it acts in this case as a 74

75

See e.g. case C-140/12, Pensionsversicherungsanstalt v Peter Brey, judgment of 19 September 2013, EU:C:2013:565, } 31. For this it has been criticized in the literature. See Nic Shuibne, ‘(Some of) the Kids’ supra n. 73, at 367–71 and 377.

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fundamental rights adjudicator, not only because in substance it protects individual rights threatened by state action76 but also because it acts as a judge of almost last resort for an individual claim which had been already denied relief in several fora.77 Adjudication on the facts and protection of fundamental rights come at the expense of constitutional interpretation, in whose respect the Court’s approach in the case seems incomplete.78 The Court implicitly transcends some of its key doctrines, without reconciling the new approach with the old one, and ultimately leaving a number of questions pending:79 the relationship between European citizenship and nationality, the destiny of internal situations, the definition of the substance of European citizenship.80 This threatens both the identity of the Court and the legacy of the case.81 In terms of the former, reflecting on the link between underlying stories and ultimate ruling in Zambrano leads to question whether there is a reverse correspondence in the Court’s adjudication approach between the ease of the factual frame it is presented with and the intensity of its engagement with constitutional questions.82 In terms of the legacy of the case, understanding 76

77

78 79

80

81

82

See Lenaertz, supra at n. 9, at 14–15 (the case lends itself to a reformulation of the famous observation by AG Jacobs in case Konstantinidis according to which each European citizen should be entitled to say ‘Civis Europaeus Sum’); also see Gareth Davies ‘The Family Rights of European Children: Expulsion of non-European Parents’ [2012] EUI Working Papers RSCAS 2012/04, at 1 (the backdrop to these recent cases is a period of increased EU attention to fundamental rights and particularly children rights). Mr. Robert emphasized how resort to EU law had become a necessity when the case came to the Tribunal du Travail. He was prepared to bring a claim to the European Court of Human Rights for violation of the right to property had the EU law route not worked. Interview with Mr. Pierre Robert, supra n. 6. Zambrano’s claims for regularization of his residence situation had been rejected by the Conseil d’État, by the Office des Étrangeres and were pending in front of the Conseil du Contentieux des Étrangers. Zambrano, supra n. 2, } 17, 23 and 29. See Nic Shuibne, ‘(Some of) the Kids’ supra n. 73, at 371. In Sadl and Hink’s categorization of claim and legal principle in a number of EU citizenship central cases, Zambrano is interestingly one of a handful in which no explicit legal principle can be detected. Sadl and Hink, supra note 72, at 558. Rottmann (Case C-135/08, Janko Rottmann v Freistaat Bayern, EU:C:2010:104) already raised the question of the relationship between European citizenship and nationality. On purely internal situations, the Court reversed gear in the subsequent cases of McCarthy and Dereci. The question of the substance of EU citizenship remains open. While sensitivity to the factual background results in a judgment inspired by the same rightsdriven approach that has been highlighted in the literature on European citizenship, failure to ground rights-protection in a sound theory of the substance of supranational citizenship risks consolidating the sense of a random approach to individual rights. See Eleanor Spaventa, ‘Seeing the Wood despite the Trees? On the Scope of Union Citizenship and its Constitutional Effects’ [2008] 45 CMLRev 13, at 39. While addressing this question is beyond the scope of this chapter, the same offers a possible hint to the literature on paths of adjudication at the Court. See e.g. Sadl and Hink, supra note

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the mixed stories of desert and deprivation that merged in Zambrano sheds light on its legal relevance.

legacy Legal Relevance Subsequent cases seem to have marginalised the ruling in Zambrano. Several claims of third-country nationals relying on the substance of a family member’s European citizenship have followed.83 None has found clear relief, as the Court’s effort has qualified and restricted the scope of the substance doctrine, particularly in the McCarthy and Dereci rulings.84 Ultimately, as things stand, the substance of European citizenship is only “interfered with” when a dependent child citizen faces a real threat of having to leave the European Union.85 Rejoining the different narratives in the background story and the different levels of reasoning concurring in the Zambrano judgment suggests that the ruling may have specific relevance in situations coupling desert and extreme vulnerability: European citizenship was deployed in Zambrano to protect from deprivation two citizens amongst the most vulnerable and a migrant amongst the most deserving. The flow of asylum seekers escaping to Europe,

83

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72; Nic Shuibne, ‘(Some of) the Kids’ supra n. 73, at 372 (on the court’s use of formulas); Loïc Azoulai, ‘The “Retained Powers” Formula in the Case Law of the European Court of Justice: EU Law as Total Law?’ [2011] 4 European Journal of Legal Studies 192; Mark Dawson, ‘How Does the European Court of Justice Reason? A Review Essay on the Legal Reasoning of the European Court of Justice’, [2014] 20 European Law Journal 423 (interpreting Zambrano as an example of the Court’s reacting to the surrounding legal and political environment); Elise Muir, Mark Dawson, Bruno de Witte eds., ‘Judicial Activism at the European Court of Justice’ [2013]. Case 434/09 Shirley McCarthy v Secretary of State for the Home Department EU:C:2011:277 EU:C:2011:277; case C-256/11 Murat Dereci and Others v Bundesministerium für Inneres EU: C:2011:734; case C-87/12 Kreshnik Ymeraga v Ministre du Travail, de l’Emploi et de l’Immigration EU:C:2013:291; joint cases 356/11 and 357/11 O, S v. Maahanmuuttovirasto and Maahanmuuttovirasto v L, EU:C:2012:776; case C-86/12 Adzo Domenyo Alokpa and Others v Ministre du Travail, de l’Emploi et de l’Immigration, EU:C:2013:645; for an analysis of this line of case law see Francesca Strumia, ‘Looking for Substance at the Boundaries: European Citizenship and Mutual Recognition of Belonging’ [2013] 32 Yb Eur L 432. See Nic Shuibne, ‘(Some of) the Kids’ supra n. 73, at 366–67 (the Court has added confusion in subsequent case law, in part by bringing back the purely internal rule). Also see Eleanor Spaventa, ‘Earned Citizenship – understanding Union Citizenship through its Scope’ in D Kochenov ed., ‘Citizenship and Federalism in Europe: the Role of Rights’ (Cambridge University Press 2016), at 7–8. Zambrano, supra note 2, at } 44. Also see G Davies ‘The Family Rights of European Children’ supra n. 77 (for an analysis of national measures compelling departure from the EU).

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at the time of this writing, in the context of an ongoing humanitarian emergency promises several comparable stories of vulnerability and deprivation.86 While profound divisions among the Member States in the face of such emergency cast shadows on the political foundations of European integration,87 the Zambrano rationale illustrates a way in which European legal categories may be relevant, albeit in a piecemeal fashion, in the context of the refugee crisis.88 It is in this context that the Zambrano ruling may experience a second life in both legal and political terms. From a legal perspective, the question is whether children of recently arrived refugees and asylum seekers who are born on the territory of an EU Member State can acquire, as the Zambrano children did, nationality of the State of birth under rules protecting children from statelessness.89 In other words, how easily could a ‘Zambrano situation’ happen again in Europe? The answer depends on a combination of factors in international and national law. The 1961 Convention for the Reduction of Cases of Statelessness and the 1997 European Convention on Nationality both provide for the contracting parties’ obligation to grant their nationality to children born on their territory who would otherwise be stateless.90 The 1961 Convention allows for contracting parties to subject the grant of nationality to a number of conditions, such as, among others, a requirement of habitual residence, and the absence of a criminal record.91 The UNHCR has emphasized that these conditions must

86

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The European Council at a meeting in June 2015 agreed a plan on resettlement and relocation for up to 60,000 migrants. See European Council, 25–26 June 2015, Conclusions, www .consilium.europa.eu/en/press/press-releases/2015/06/26-euco-conclusions/ (accessed 5 July 2015). See e.g. Patrick Kingsley, ‘This Isn’t Human: Migrants in Limbo on Italian-French Border’, The Guardian, 17 June 2015, www.theguardian.com/world/2015/jun/17/this-isnt-humanmigrants-in-limbo-on-italian-french-border (accessed 7 July, 2015). Subsequent cases involved asylum seekers however their situations never quite matched the Zambrano one. See Ymeraga, supra n. 83 (no minor European citizen children involved); Alokpa supra n. 83 (there were minor European citizen children, but also a European citizen father); also see O, S v. Maahanmuuttovirasto supra n. 83. After Ireland changed its nationality law in 2005, no EU Member State applied a pure ius soli rule whereby nationality is granted for the sole fact of being born on the territory. See Dimitry Kochenov and Justin Lindeboom’s chapter in this book. For an overview of EU Member States nationality laws see EUDO database on National Citizenship Laws, http://eudo-citizenship.eu/ databases/national-citizenship-laws (accessed 5 July 2015). Either at birth or within a certain period thereafter. Convention on the Reduction of Cases of Statelessness, supra n. 30, art. 1. European Convention on Nationality, supra n. 30, art. 6(2). Convention on the Reduction of Cases of Statelessness, supra n. 30, art. 1(2). According to the UNHCR habitual residence is a factual criterion unrelated to lawfulness of residence (which is specifically allowed as a requirement by the European Convention on Nationality). UNHCR Guidelines on Statelessness No. 4: Ensuring Every Child’s Right to Acquire a Nationality

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be interpreted in light of the right of every child to acquire a nationality and the principle of the best interest of the child under the Convention on the Rights of the Child.92 Any rules that contracting parties apply should allow children born on their territory to acquire nationality either at birth or shortly thereafter.93 A particular case is the one of children who – like the Zambranos – could acquire nationality of the state of origin of their parents, provided they are registered with relevant authorities. The UNHCR indicates that in these cases contracting parties are not under an obligation to grant their nationality, if the authorities of the state of origin have no discretion on whether to grant or deny nationality, and provided the parents can be reasonably expected to make contact with the authorities of the state of origin.94 Three situations can therefore be distinguished under international law rules. A first situation is the one of children of recognized refugees who do not automatically acquire nationality of the state of origin at birth. In this case, the authorities of the state of birth are under an obligation to grant their nationality to the child. This is regardless of whether or not the child could acquire nationality of the state of origin through registration, as clearly refugee parents are not in a position to make contact with the authorities of the state of origin.95 A second situation is the one of children of recognized refugees who automatically acquire the nationality of the state of origin at birth. These are de facto stateless children, as they are not in a position to avail themselves of the protection of the state of origin.96 According to the UNHCR, contracting parties should give these children the possibility to acquire their nationality, but preferably through a procedure that allows for voluntary choice.97 Finally, the third situation is the one of children of asylum seekers who, like the Zambranos, are not formally granted refugee status. If these children do not automatically acquire the nationality of the state of origin at birth, they are certainly covered by article 1 of the 1961 Convention. If they could acquire nationality of the state of origin through registration with relevant authorities, as in the Zambrano case, applicability of the article 1 obligation depends on

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through Articles 1–4 of the 1961 Convention on the Reduction of Statelessness, 21 December 2012, } 41. Also see Olivier Willem Vonk, Maarten Peter Vink, Gerard-René de Groot, ‘Protection against Statelessness-Trends and Regulations in Europe’ [2013] 1 EUDO Country Report, at 41. See UNHCR Guidelines on Statelessness supra at 92, } 9–11. Also see Convention on the Rights of the Child, Nov. 20, 1989, available at http://www.ohchr.org/en/professionalinterest/ pages/crc.aspx (accessed 8 July 2015), art. 3 and art. 7(2). 94 95 UNHCR Guidelines on Statelessness, supra n. 92, } 9–11. Id. } 24–26. Id. } 27. 97 Id. } 28. Id.

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whether the parents are in a position to contact relevant authorities, and on whether the latter authorities would have any discretion in the matter.98 International law thus makes for a number of cases that could become ‘Zambrano situations’ in the context of the reception of significant numbers of asylum seekers in Member States. Whether these cases can concretely turn into ‘Zambrano situations’ depends on the extent to which international law is effective at the domestic level. Several Member States are parties to either one or both of the 1961 and 1997 Convention.99 However, their domestic rules on acquisition of nationality for children at risk of statelessness often include additional conditions, such as lawful residence or conditions pertaining to the status and nationality of the parents that are in breach of the Conventions’ rules, and that restrict the number of asylum seekers’ cases that could yield Zambrano situations.100 Based on a recent survey of relevant rules in Member States, it appears that eleven of twenty-eight Member States would allow a Zambrano situation to arise.101 As for Belgium, while the relevant provision of the Code on Nationality was amended in a restrictive sense in 2006,102 several factors suggest that Zambrano could happen again. First, the Belgian Constitutional Court in 2008 interpreted the amended provision in line with international principles, indicating that the exception to the rule of acquisition of nationality must be interpreted narrowly.103 Furthermore, Belgium, which was not a party to the 1961 Convention at the time of the Zambrano, has since acceded to the same Convention in 2014, which suggests at least a willingness to abide by relevant international rules.104 98

99

100 101

102 103

104

Id. } 24–26. Also see Vonk, Vink and de Groot ‘Protection against Statelessness’, supra n. 92, at 46. Nineteen of the 28 EU Member States are parties to the 1961 Convention. The same number are parties to the 1997 Convention. See Vonk, Vink and de Groot ‘Protection against Statelessness’, supra n. 92, at 42–45. Id. at 43–45. The 11 Member States are Belgium, Bulgaria, Greece, Finland, France, Ireland, Italy, Poland, Portugal, Slovakia and Spain. See supra n. 32. Cour Constitutionnelle (Belgian Constitutional Court), Judgment of 24 April 2008, n. 73, www.const-court.be/public/f/2008/2008-073f.pdf (accessed 8 July 2015) (the exception cannot apply to children of refugees and of other people who are in the impossibility of contacting the authorities of the state of origin } B.8.5). This is in line with preparatory works to the amending law, according to which the exception is not meant to apply to children of persons granted refugee status or subsidiary protection. See Chambre des Représentants document 2760/01, supra n. 35. The Zambranos would have qualified for subsidiary protection after the implementation of the Qualifications Directive in Belgium. See supra, n. 16. It seems that the decision to accede to the Convention was the result of lobbying activities on the part of the UNHCR and of the Interfederal Centre for Equal Opportunities and the Federal Centre of Migration, http://diversitybelgium.be. Conversation with Sarah Lambrecht, supra n. 34.

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In addition, in some recent cases, Belgian nationality has been granted to the stateless children of migrant parents who had not been formally recognized as refugees in Belgium without an inquiry into whether they would have been able to obtain the nationality of another state.105 A further set of questions regarding the relevance of the Zambrano ruling for the condition of refugee and asylum seeker families in EU Member States pertains to the kind of rights parents can claim on the basis of the substance of the European citizenship of children. Rejected asylum seekers, like the Zambranos, can probably rely on the ruling to obtain a right to stay and work. Nevertheless, are there rights beyond this? In particular, can the substance of European citizenship offer something in terms of protection to parents recognized as refugees, who will have a right to stay and work, regardless of the citizenship of their children?106 Answers to these questions ultimately hinge not only on the legal significance of the ruling, but also on the way, its underlying rationale penetrates a surrounding public debate on migration and the condition of migrants.107

Political Relevance The Zambrano ruling suggests that when it comes to the situation of the most vulnerable migrants, European citizenship endeavors to speak rights to power.108 It brings a discourse of rights to bear on the power of the Member 105

106

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Tribunal de Premiere Instance seant a Liege, n. 14/1629/B, judgment of 19 December 2014 (the case concerned the Belgian born children of two Roma parents. The parents appeared to not be recognized as nationals by another State. The Tribunal not only did not apply par. 2 of article 10, but gave a generous interpretation of par 1 – acquisition of Belgian nationality is automatic and the judgment as to whether the child would otherwise be stateless requires only a mental exercise rather than a concrete proof.). In the United Kingdom, for instance where a formal right to reside for ‘Zambrano carers’ has been recognized, amendments to social security regulations have been passed to ensure that Zambrano carers have no access to a range of social security benefits. And the courts have gone along. See Social Security (Habitual Residence) (Amendment) Regulations 2012/2587 of 11 October 2012 (effective 8 November 2012) www.legislation.gov.uk/uksi/2012/2587/pdfs/uksi_ 20122587_en.pdf. Also see ‘Zambrano Right to Reside-Amendment to Regulations’, Memo of the Department of Social Development of 8 November 2012, vol 2/37. For an example of the UK Courts’ position, see The Queen on the Application of Sanneh v Secretary of State for Work and Pensions [2013] EWHC 793 (Admin). Debate that, according to Dimitry Kochenov and Justin Lindeboom, raises windmills to fight against immigration policy. See their chapter in this book. But see Daniele Gallo, ‘La Corte di Giustizia rompe il vaso di Pandora della cittadinanza europea’, [2012] Giorn. di Dir. Ammin. 39 at 49 (there is a risk that the case may induce Member States to alter their immigration and nationality laws in a restrictive direction as happened in Chen).

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States to exercise unbridled discretion in managing their borders, and in including and excluding. In this sense, the ruling adds a voice to an ongoing debate on immigration, in which this power is constantly reaffirmed.109 While the effectiveness of this discourse may be debatable, the very case of Belgium offers an example of how hints from the Zambrano judgment had a mitigating effect on some of the harshest outcomes of a hostile political climate towards immigration. The Zambrano case took advantage of a window of legal opportunity in Belgium: the provision on acquisition of nationality by stateless children was about to be amended.110 Likewise, the provisions of the Law on Foreigners extending the same family reunification rights to Belgian nationals as to migrant EU nationals were to change in 2011.111 The change to article 10 of the Code on Nationality, in particular, fits within the context of generalized discontent with a nationality law that, ever since a reform in 2000, was one of the most permissive in Europe and was seen as an element of attraction for migrants.112 In the same spirit, a comprehensive reform in 2012 would radically change Belgian nationality law,113 with the stated intent of making it ‘neutral in respect of immigration pressures’.114 The Zambrano ruling did not have any resonance in the context of the reform of the nationality law.115 However, it did play a role in the discourse 109

See e.g. David Cameron, Immigration Speech, 28 November 2014, www.bbc.co.uk/news/ukpolitics-30250299 (accessed 8 July 2015). 110 See supra n. 32. 111 Loi modifiant la loi du 15 décembre 1980 sur l’accès au territoire, le séjour, l’établissement et l’éloignement des étrangers en ce qui concerne les conditions dont est assorti le regroupement familial, 8 July 2011, Moniteur Belge, 12 September 2011. The family reunification regime applying to Belgian nationals was brought closer to the one applying to TCNs, through the enactment of resources, adequate housing and other preliminary requirements. 112 Marie-Claire Foblets, Zeynep Yanasmayan, Patrick Wautelet, ‘Country Report: Belgium’, RSCAS/EUDO-CIT-CR 2013/27, at 23–26. 113 Id. Also see Loi modifiant le Code de la nationalité belge afin de rendre l’acquisition de la nationalité belge neutre du point de vue de l’immigration, 4 December 2012, Moniteur Belge 393 of 14 December 2012. In the reformed law, three paths to naturalization replace a multitude of pre-existing rules: a short declaration procedure requiring five years of residence, a long declaration procedure requiring ten years of residence and a naturalization procedure for persons of exceptional merit. 114 This is suggested by the very title of the law as well as by the preparatory works. See Chambre des Représentants de Belgique, Compte Rendu Integral, Séance Plénière, CRIV 53 PLEN 108, 24 October 2012, www.lachambre.be/doc/PCRI/PDF/53/ip108.pdf (accessed 8 July 2015), } 05.01. 115 However, another EU citizenship-centered judgment, Rottmann (supra n. 81) did. It inspired an advisory opinion of the Conseil d’État (Council of State) on the provisions of the new nationality law on loss and forfeiture of Belgian nationality. Relevant provisions were amended in the final version of the reform law to make loss of nationality more difficult, in line with the Rottmann ruling, in cases in which this would result into statelessness. See Opinion of the Conseil d’État

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surrounding, and eventually in the substance of, the amendment to the Law on Foreigners. Just a few days after the Zambrano judgment, the Conseil d’État issued an opinion on the proposed amending law,116 highlighting how the very objective of the proposed law, to make family reunification more difficult for Belgian nationals, was in contrast with the Zambrano ruling and with the substance of Belgian citizenship.117 The revival of the internal situation in McCarthy and Dereci weakened the argument of the Conseil d’État and eventually the reform was passed regardless of Zambrano.118 In any case, the only right-enhancing amendment that the reform brought about in the Law on Foreigners was an implementation of the Zambrano rule: family reunification rights were extended to ascendants of Belgian nationals, regardless of whether any relationship of dependency existed or not.119 The Zambrano ruling also triggered claims against the reformed Law on Foreigners, which resulted in three judgments of the Belgian Constitutional Court.120 In all three cases, relevant parties had questioned whether the provisions of the reformed law took into appropriate account the rights of Belgian nationals as EU citizens in light of the Zambrano judgment.121 The Constitutional Court was reluctant to find in the Zambrano ruling any limits to the power of the Belgian legislator and upheld the reformed law in all three instances.122 It did clarify, however, that Zambrano rights would have to be taken into account on a case-by-case basis, possibly disapplying relevant provisions of the Law on Foreigners when the situation called for it.123 The experience of Belgium in this respect shows how European citizenship infiltrates rights-concerns into immigration debates otherwise dominated by the unquestioned discretion of the Member States, informing the views of private parties as well as institutional actors. In particular, European citizenship infiltrates rights-concerns for the most vulnerable among the migrants.

49.941/AG/2/V of 16 and 23 August 2011 www.dekamer.be/FLWB/PDF/53/0476/53K0476011.pdf (accessed 8 July 2015), } 14.1.1–14.4. Also see articles 23 and 23bis of the Code de la nationalité belge of 28 June 1984 as amended, Justice 1984900065 of 12 July 1984, p 10100. 116 Opinion of the Conseil d’État, n 49 356/4 of 4 April 2011 www.lachambre.be/FLWB/PDF/53/ 0443/53K0443015.pdf (accessed 8 July 2015). 117 118 Id., } 45. Interview with Mr. Pierre Robert, supra n. 6. 119 Id. Also see Loi modifiant la loi du 15 décembre 1980, supra n. 56, art. 40 ter. 120 See, respectively, Cour Constitutionnelle, judgment of 26 September 2013, n. 121, www.constcourt.be/public/f/2013/2013-121f.pdf; judgment of 26 September 2013, n. 123, www.const-court .be/public/f/2013/2013-123f.pdf; and judgment of 19 December 2013, n. 167, www.const-court .be/public/f/2013/2013-167f.pdf (all accessed 8 July 2015). 121 Id. Relevant questions focused in particular on art. 40 of the Law on Foreigners, as amended. 122 Id. 123 See Cour Constitutionnelle, judgment of 26 September 2013, supra n. 121, } B.59.5–7.

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conclusion Zambrano’s quiet revolution in the doctrine of European citizenship has been overshadowed by retreating steps in subsequent judgments and by frustrated comments in the literature. Unravelling the layers in the case’s background to distinguish the role of vulnerable citizens, deserving migrants and deprived workers recuperates in part the legacy of that revolution. The Court, which seemed to have mixed its own role of constitutional guardian with the national courts’ one of adjudication on the facts, turned out to demonstrate a measure of sensitivity to the combined instances of desert, vulnerability and need. This in turn illuminates the substance of European citizenship: a legal status that trails along nationality and fades in purely internal situations, but that will come to life to mark an alternative inclusion path in cases involving fragile nationals and vulnerable migrants. Knowing this would perhaps be of comfort to Mr. Zambrano, a serious, polite and introverted man, according to his lawyer, who cared that his story may lay the grounds for others.

acknowledgements I would like to thank the participants at the 2014 EU Law Stories workshop in Washington, DC and the participants at the EU Discussion Group at Sheffield School of Law for their valuable comments on earlier versions of this chapter. Thanks also to Pierre Robert, Tim Corthaut and Sarah Lambrecht for their help and availability, and to Rose Monahan for her research assistance.

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13 Media Pluralism in Centro Europa 7 srl, or When Your Competitor Sets the Rules roberto mastroianni

introduction This is an internal market story but also a true story of free speech and pluralism in the media in a very sensitive political environment. Access of newcomers is obstructed by an unprecedented (at least in the Western world) situation of dominance and open conflict between economic interests in the television and advertising markets on the one side and government functions on the other. Not surprisingly, due to the relevance of the principles and interests at stake, the Centro Europa 7 case has drawn the attention not only, as we will see, of the European Courts but also of many international bodies concerned with the protection of pluralism in the media.1 It is also a true “European” story, for at least two reasons: first, because both of the two supranational Courts that were involved in different stages of the dispute called in a complementary fashion to promote, albeit with different means, the effectiveness of fundamental rights’ protection; second, because it makes clear, in the light of the negative outcome of an unbalanced legal battle between a small undertaking and a giant media mogul owned by a prime minister, that the protection of pluralism in the media is too sensitive an issue

1

See the Parl. Ass. of the Council of Eur., Resolution No. 1387/2001 on Monopolisation of the Electronic Media and Possible Abuse of Power in Italy; the Venice Commission for Democracy through Law, Opinion No. 309/2004 of 13 June 2005; the European Parliament Resolution on the Risks of Violation, in the EU and Especially in Italy, of Freedom of Expression and Information, No. 2237/2003; and the Commissioner for Human Rights in its Issue Discussion Paper on Media Pluralism and Human Rights of 6 December 2011. See also Open Society Foundations, Television Across Europe, Regulation, Policy and Independence (Italy), 2005 and follow-up 2008; Reporters sans frontières, A Media Conflict of Interest: Anomaly in Italy, 2003, www.rsf.org/IMG/pdf/doc-2080.pdf.

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to be left to the competence of a single Member State.2 The unfortunate destiny of Centro Europa 7 highlights that even a European State with deep traditions in the protection of fundamental rights may find it difficult to prevent owners of big media outlets from gaining political advantages from the influence of television programs on public opinion. Recourse to EU law has proved to be extremely useful in finding legal arguments at the advantage of Centro Europa 7, but, for the reasons set out later in this chapter, it was not decisive. Therefore, this story suggests a common continental solution to the question of enhancing effective media pluralism in Europe, either via a new EU legislation or a Council of Europe Convention (or both, as in the case of the regulation of television broadcasting services).3

the complex facts of the case and the national dispute: sorry, your space is already occupied On 28 July 1999, following the first public tender procedure ever put in place in the Italian television broadcasting market, the Italian authorities granted Centro Europa 7 srl (hereinafter: CE7), a newcomer in the market,4 a national terrestrial television broadcasting license, enabling CE7 to set up and operate an analogue television network. The license entitled CE7 to use frequencies covering at least 80 per cent of the national territory. The Italian broadcasting market was and, regrettably, still is5 highly concentrated: two operators – Mediaset, controlled by the Berlusconi family, and the public service broadcaster RAI – hold more than an 80 per cent share of the national audience, and one operator (Mediaset) holds a dominant position, with a market share of about 60 per cent, in the television advertising market.6 No 2

3

4

5 6

For more details on this point, see R. Mastroianni, “Promoting Information Pluralism through EU Law: Regulation or Competition Law in the Audiovisual Sector?” In EU Competition Law between Public and Private Enforcement, edited by Bernardo Cortese, 333. Kluwer Law International, 2013. The “Television without Frontiers” directive, adopted by the EU Council in November 1989, followed a Council of Europe Convention on Transfrontier Television open to signature in May 1989. The two texts are very similar. Since then, the company was engaged only in local transmissions with the brand “Italia 7”. For the details of a very articulated and complicated story, see R. Mastroianni, Sistema radiotelevisivo italiano e diritto europeo, Giappichelli, Torino 2004; A. Pace & M. Manetti. ‘Art. 21: la libertà di manifestazione del proprio pensiero’, in Commentario della Costituzione, edited by G. Branca & A. Pizzorusso, Zanichelli, Bologna, 2006. R. Mastroianni & A. Arena, Media Law (Italy), Kluwer Law International, II ed. 2014, at 16. Italian Competition Authority, Indagine conoscitiva sul settore sul settore televisivo: la raccolta pubblicitaria (2004); Italian Communications authority, Deliberation No. 551/12/CONS, par. 4.4.7, p. 139.

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cable transmissions were in place at the time of the tender, while satellite transmissions were just making their first appearance, therefore the only available means of transmission (analogic frequencies) allowed just a limited space for newcomers. In December 1999, the Ministry of Communications notified CE7 that, despite the positive outcome of the tender, it could not be granted access to the frequencies to broadcast on a national channel because of an “objective impossibility”. In short, the frequencies to be assigned to CE7 were occupied by another broadcaster, Mediaset, which was in principle obliged to dismiss them in result of the tender procedure. More to the point, Mediaset had previously de facto (i.e. without a public tender procedure) occupied frequencies enabling it to broadcast three national channels. However, Italian Law no. 223 of 1990, which had given a formal recognition to this situation, had been declared unconstitutional by the Constitutional Court as adopted in breach of Article 21 of the Italian Constitution, which codifies freedom of information.7 The new statutory rules, adopted in 1997 and applicable at the time of the tender,8 stated that no subject could control frequencies enabling it to operate more than two national channels (20 per cent of the total number of available channels). As Mediaset was broadcasting on three channels, it was operating “over the quota” and therefore obliged by law to relinquish the frequencies. Unfortunately, Law no. 249 of 1997 failed to impose any clear deadline to that effect; it permitted Mediaset to keep using the frequencies for a “transitional” period and asked the Italian Communications Authority (AGCOM) to set a deadline for their handover to CE7. AGCOM, in turn, adopted some very controversial decisions, whose only effect was postponing the deadline to rather far in the future. In November 2002,9 the Italian Constitutional Court unsurprisingly held that Law no. 249 of 1997 was also incompatible with the freedom-of-information principle, insofar as it failed to set a clear deadline for the handover of the “over-the-quota” channels, thus blocking access for newcomers and therefore perpetuating a situation of lack of pluralism in the broadcasting media sector. The Court, however, put its trust in the Parliament one more time: it did not declare the law unconstitutional with immediate effects (so to impose the immediate relinquishment of the frequencies), but it called for a new legislation compatible with the Constitution. The Court also averred that the

7 9

8 Judgment no. 420/94. Legge 31 Luglio 1997, n. 249, art. 2. Cass. 20 Novembre 2002 no. 466.

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“transition” should in no case exceed December 31, 2003, when in the absence of a new law the over-the-quota channels had to be definitively shut off and the frequencies handed over to CE7. The Constitutional Court’s trust in the Parliament, again, was clearly misplaced. A week before expiration of the deadline, on December 24, the Italian government, headed by Silvio Berlusconi, adopted an “emergency” decree, later ratified by the Parliament, postponing one more time the handover deadline for over-the-quota frequencies. The reason provided by the government was the need to obtain an opinion from AGCOM on the economic and technical developments in the broadcasting sector. A new broadcasting law, adopted in May 2004 when the right-wing coalition was still in power,10 formally extended the transition period until the completion of the national switchover process to digital terrestrial television, a process which ended only in 2012. As previously indicated, serious issues of “conflict of interests” arose, since the legislative provisions which permitted the perpetuation of Mediaset’s position of dominance were adopted when the main shareholder of that broadcasting company, i.e. Silvio Berlusconi, was the head of government and the leader of the majority coalition in the Parliament. In his capacity as the head of the government he also had indirect control over the public service broadcaster RAI, and therefore in a position to reach and have influence over about 90 per cent of the Italian audience.11 Returning to the unfortunate situation that is the subject of this story, the result of the legislative interventions was that de facto, CE7 was unable to broadcast, although it had obtained a broadcasting licence through a formal public tender procedure. Unsurprisingly, CE7 challenged all those provisions before Italian administrative courts. It applied for an acknowledgement of its entitlement to have the frequencies allocated and for compensation for the damage incurred in result of its inability to broadcast. CE7 alleged that the Italian authorities had prevented it to enter the broadcasting market in times of high profits (i.e., when the number of available channels was limited because of the natural scarcity of the analogue spectrum and the economy was in very good shape for advertising market). In its view, such denial realized a violation of its fundamental right to impart information, protected in Italian and European law, as

10 11

Legge 3 Maggio 2004 no 112. For various examples of how he took advantage of that position for its political aims, see the detailed report from Reporters sans frontières, A Media Conflict of Interest: Anomaly in Italy, supra, footnote 2.

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well as the requirements imposed on Member States by European Directives concerning electronic communications.12 It was clear to CE7 and its lawyers that these legal actions, if formally conducted against the Italian authorities, in practice challenged the economic interests of a central political figure, the Italian Prime Minister Silvio Berlusconi. This rather bizarre situation arose very clearly during the domestic legal procedures, for instance when, before the Council of State, as CE7 lawyers we noticed that the briefs submitted by Mediaset and the State attorney acting for the Minister of Communications presented many points in common. It appeared that the Italian government and the private broadcaster had previously agreed on how to develop their defense in the course of the legal proceedings, and that the former had totally endorsed the arguments (and, indirectly, the interests) of the latter. After a negative decision by the Regional Administrative Court, CE7 appealed to the Consiglio di Stato. In its Order of 19 April 2005, the Consiglio di Stato recognized that the failure to allocate frequencies to CE7 had been “due to essentially legislative factors”, i.e. the adoption by the Italian Parliament, whose majority was in the hands of Berlusconi, of “transitional” legislation in favour of the incumbent broadcaster Mediaset. This raised before the domestic courts, the international fora and the public opinion deep concerns regarding the violation of fundamental freedoms protected by the Italian Constitution13 and the ECHR (freedom of information14 and protection of the broadcasting license as “property”15). CE7 also submitted before the Consiglio di Stato that the Italian legislative framework was at odds with some EU Directives that were part of the so-called 2012 New Common Regulatory Framework on electronic communication services (NCRF), in particular the “Framework” and the “Authorisation” Directives16 concerning the granting of authorizations to use broadcasting frequencies. In brief, the EU Directives require that the allocation of frequencies should take place in any Member State on the basis of objective, transparent, nondiscriminatory and proportionate criteria. CE7 submitted to the Consiglio di Stato that the Italian authorities (including legislative and judicial authorities) had manifestly failed to respect such principles.

12 14 16

13 See further below. Art. 2 Cost. It. (protecting freedom of information). 15 Euro. Convention on Human Rights, Art. 10 Id. at First Protocol, Article 1. Directive of the European Parliament and of the Council instituting a common regulatory framework for electronic communications networks and service (2002/21/ CE),’Framework Directive’; Directive of the European Parliament and of the Council on the authorization of electronic communications networks and services (2002/20/CE), ‘Authorization Directive’.

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a question of legal strategy: the advantages of direct recourse to eu law in case of incompatible national legislation At that juncture, a delicate question of legal strategy arose for the lawyers defending CE7. In the Italian legal system, courts cannot set aside a law adopted by the Parliament in case of violation of the Constitution or of the European Convention on Human Rights. Only the Constitutional Court, if so requested by a lower domestic court, retains the power to strike down a law if it considers that such a violation occurred.17 Oftentimes, however, by the time the Court could rule on the validity of a law, it had already been replaced by a new law, which enabled the perpetuation of the existing situation of illegality. This is exactly the case of the legislation adopted in Italy in the field of television broadcasting, where the judgments of the Constitutional Court were in substance annulled in their effects by the adoption of new legislation maintaining, although with different provisions, the dominant position of Mediaset.18 In addition, as a general rule of the Italian legal order, a violation of the Constitution, if committed by the legislative power and irrespective of its gravity, cannot give rise to any compensation claim. In contrast, since the landmark judgments in Costa and Simmenthal II, a national Court may – indeed, it must – proceed with the immediate “disapplication” of a national statutory provision inconsistent with directly applicable EU Law (supremacy principle),19 unless it considers it necessary to refer the preliminary question to the ECJ for the correct interpretation of the EU provisions at stake.20 In addition, since 1992, the European Court of Justice has held that in case a violation of EU law causes harm to an individual, the latter may claim compensation from the offending State, even if the author of the violation is the national legislature or a national court.21 Hence, the most effective strategy for a plaintiff to get rid of an unwanted national law is to claim that it is inconsistent with a directly applicable

17

18 19

20 21

Art. 134, Cost. It. As to the ECHR, according to Article 117, as modified by Constitutional Law n. 3 of 2001, international agreements to which Italy is a party acts as parameters of Constitutional legitimacy of statutes adopted by the Parliament. However, it is still the role of the Constitutional Court to assess whether such a violation occurred. See above, para 1 and the authors cited in footnote 5. Costa v. ENEL, Case C-6/64. [1964] E.C.R. 585; Amministrazione delle Finanze dello Stato v. Simmenthal, Case C-107/77 [1978] E.C.R. 629. Article 267 TFEU. Francovich and others v. Italian Republic, Case C-6/90, [1993] E.C.R. I-05357. See the chapter by Bartolini and Guerrieri in this volume.

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provision of EU law, with a view of having the law immediately “set aside” by the court and, if the conditions are met, also secure compensation for the damages caused by the legislature. This is exactly what CE7 asked the Consiglio di Stato to do principaliter: setting aside the Italian legislation that prevented newcomers to receive the frequencies allocated to the “over-thequota” broadcasters. CE7 also suggested, in the alternative, to refer questions of interpretation of the relevant provisions of EU law to the ECJ, as an intermediate step before the “disapplication” of domestic law.

to luxembourg! the reference to the ecj For a civil law system, based on the prominence of written law, setting aside a national legislation in the course of a dispute is not an easy task for national judges. It took years for the Italian Constitutional Court22 to accept the Simmenthal principle that the “national court which is called upon, within the limits of its jurisdiction, to apply provisions of community law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any conflicting provision of national legislation.”23 It is then of no surprise that the Consiglio di Stato, considering that the decision on the incompatibility of national law with EU provisions required a clarification of the scope of the relevant EU rules, decided to make use of the preliminary reference procedure. More precisely, it asked the Luxembourg Court whether the Italian legislation, starting from Law No 249 of 1997, was compatible with the Treaty provisions on freedom to provide services and on competition. It also invoked the NCRF24 and the principle of pluralism of information sources, part of Article 10 of the ECHR, as a general principle of Community law. The CJEU delivered its judgment on 31 January 2008.25 In short, following the Opinion of AG Maduro of 12 September 2007, it found that the legislation adopted by the Italian authorities was in breach of EU law, in particular the freedom to provide services and the New Common Regulatory Framework (NCRF) Directives implementing such fundamental market freedom. By preventing access to the television market, the Italian legislation infringed upon the principles laid down in Article 56 TFEU, as confirmed by the 22 23

24

25

Judgment no 174 of 1984, Granital. Amministrazione delle Finanze dello Stato v. Simmenthal, Case C-107/77. [1978] ECR 629, para 24. More precisely, Articles 8 and 9(1) of the Framework Directive as well as Articles 5, 7 and 17 of the Authorization Directive. Centro Europa 7 Srl v. Ministero dello Comunicazioni, Case C-380/05. [2008] E.C.R. I-349.

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Directives, and favoured the existing TV channels to the detriment of new broadcasters which could not broadcast – despite having licenses – because no frequencies had been allocated to them.26 According to the NCRF, and to Article 56 TFEU with reference to the period of time prior to its adoption, national measures limiting the number of operators in the broadcasting market can be justified by reference to general interest objectives insofar as they are based on objective, transparent, nondiscriminatory and proportionate criteria. The Court pointed out that the Italian law’s favouritism clearly violated the non-discriminatory mandate. The CJEU therefore reached the conclusion that EU rules preclude, in television broadcasting matters, national legislation the application of which makes it impossible for an operator holding rights to broadcast in the absence of broadcasting radio frequencies granted on the basis of objective, transparent, non-discriminatory and proportionate criteria. Given the Court’s answer to the questions concerning the violation of the freedom to provide services and the NCRF, totally in favour of CE7, the Court considered it not necessary to rule on the questions concerting the violation of EU fundamental rights.

the final decision of the domestic courts and its disappointing conclusions: to strasbourg! Unfortunately for CE7, this was not the end of the story. Following the resumption of proceedings, in a judgment of 20 January 2009, the Consiglio di Stato decided to set aside the domestic laws preventing the granting of the broadcasting frequencies and to enjoin the Ministry of Communications to assign frequencies to CE7. It observed that over a period of ten years, the Italian authorities had acted negligently by granting CE7 a license without assigning it any broadcasting frequencies. Domestic laws were no defence for the violation of EU law. The Consiglio di Stato also ruled on the compensation due to CE7. The latter had submitted an expert opinion by a commercial bank assessing the damage sustained at EUR 2,175,213,345.00. That sum was calculated based on the profits achieved as from 1999 (a time span of ten years) by Retequattro, the over-quota channel owned by Mediaset whose frequencies should have been 26

The Court pointed out that the successive application of the transitional arrangements introduced by the legislature had the effect of preventing operators without broadcasting radio frequencies from accessing the market. The general authorization to operate on the digital broadcasting services market, which benefitted only the incumbent networks, consolidated that restrictive effect. Those measures have had the effect of freezing the structures on the national market and protecting the position of those national operators already active on that market.

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handed over to CE7 as a result of the tender. The Consiglio di Stato refused to take into account the expert evaluation and, without consulting any other expert ex officio, decided to award the applicant company the total sum of EUR 1,041,418 in compensation.27 Disappointed by this part of the judgment, and having exhausted all available domestic remedies, CE7 had no choice but to take the case to the European Court of Human Rights in Strasbourg. This Court has jurisdiction for any dispute arising from an alleged infringement committed by a State party to the European Convention on Human Rights. In its application lodged in 2009, CE7 asked for a ruling that Italy had violated its fundamental rights through administrative and jurisdictional action and to have a more adequate compensation of the damage suffered.28 In particular, CE7 complained under Article 10 (freedom of expression)29 that its right to impart information had been breached, and under Article 14 (prohibition of discrimination in the field of application of the ECHR), that it had suffered discrimination relative to the Mediaset group. Specifically, the applicant company submitted that it had been unable to broadcast television programmes (i.e. to impart information) for about ten years despite the formal possession of a licence to do so following a public tendering procedure. This infringement of its rights resulted from various legislative, administrative and judicial measures by the Italian State, acting through different bodies and instruments. The previous case law of the Strasbourg Court was in CE7’s favour. According to earlier decisions, the refusal to grant a broadcasting licence 27

28 29

The Council of State, ordered the Ministry to pay the applicant company EUR 391,418 for the losses sustained. As regards loss of earnings, it found that, from 1 January 2004, the applicant company could have achieved profits but had been unable to do so because of the delay in allocating the frequencies. The amount could be assessed at only EUR 650,000, since it was unlikely that the company would have purchased shares in the market, even in the event that the over-quota channels had relinquished the frequencies. App. no. 38433/09. Art. 10 ECHR is the basic provision imposing States parties to the ECHR to protect freedom of expression and information. Para 1, states that “Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. This Article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises”. Under para. 2 some derogations are allowed: “The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary”.

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amounts to an encroachment upon the applicants’ freedom to impart information, unless such a refusal can be justified by reference to the last sentence of the first paragraph or to the second paragraph of Article 10 ECHR.30 In the CE7 case, however, the Italian government’s conduct went far beyond that of a mere refusal. It formally granted the right to engage in television broadcasting to the applicants following an open and transparent public tender, but subsequently deprived that right of its substance by failing to grant the necessary frequencies, thus making it technically impossible for the applicants to carry out broadcasting activities. Applying these principles to the case of CE7, in its judgment of 7 June 2012 the Grand Chamber of the Strasbourg Court, including the Italian judge Guido Raimondi who had expressly required the case to be heard before the highest formation of the Court, held that the interferences with CE7 right to freedom of expression had been neither justified nor necessary in a democratic society. The enactment of a series of “transitional” laws, which deprived of any effects the judgments of the Constitutional Court in favour of CE7, favoured existing operators, preventing the former from effectively asserting its rights and deprived the public of a richer, pluralistic media market. The Court held that the Italian authorities’ failure to allocate frequencies to it had deprived the license given to the company of all practical purpose, since it had been impossible for it to broadcast for nearly ten years. Therefore, there had been a substantial obstacle, and thus an interference with, CE7’s exercise of its right to impart information and ideas31. As to the second paragraph of Article 10 (admissible derogations), the Court considered that the legislative framework, as applied to the applicant company which was unable to operate in the television broadcasting sector for ten years despite having been granted a license in a public tendering procedure, was not a justifiable interference. It did not satisfy the foreseeability requirement under the ECHR and deprived the company of the measure of protection against arbitrariness required by the rule of law in a democratic society. In particular, the successive adoption of a series of “transitional” laws postponed the allocation of frequencies to the applicant without defining with sufficient precision and clarity the scope and duration of the transitional scheme. Since the interference was not “prescribed by law”, it was not necessary for the Court to scrutinise the “legitimate aim” of the measures adopted.32 This shortcoming had resulted, inter alia, in reduced competition in the audio-visual sector. That amounted, in the opinion of the Court, to a failure 30 31

Appl. 14134/02, Glas Nadezhda Eood and Elenkov v. Bulgaria, decision of 11 October 2007. 32 Centro Europa 7 Srl v. Italy, paras 136–38. Centro Europa 7 Srl v. Italy, para 154.

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by the State to comply with its positive obligation under the Convention to put in place an appropriate legislative and administrative framework to guarantee effective media pluralism (right of the public to be informed).33 In other words, according to the modern interpretation of States’ obligations under Article 10 ECHR, a State is required to foster the highest protection of freedom of information by adopting a legislation which brings about the creation and the maintenance of a pluralistic marketplace of ideas.34 Finally, as regards the demand for just satisfaction (Article 41), put forward by CE7 in its attempt to gain back some of the lost profits of the company, the Court considered insufficient the compensation awarded by the Consiglio di Stato, especially as the latter ordered no expert valuation to quantify the losses sustained and the loss of earnings. Surprisingly, in spite of the CE7 lawyers request and provoking the dissenting opinion of some of its members,35 the Court did not order an expert evaluation to assess the losses and held on an equitable basis that Italy was to pay CE7 a sum ten times higher than that imposed by the Council of State, but still very far from the damages alleged by the company.36

time is not on our side: a sad ending As specified at the outset, the CE7 saga is a true European story, although framed in a national context of manifest violation of the fundamental principles of media pluralism and freedom of expression. The judgments of the two European courts are both relevant, as they introduce some new principles in the interpretation of internal market rules and in the clarification on States’ obligations under the principle of freedom of expression as enshrined in Article 10 ECHR. In terms of judicial strategy, the CE7 story makes clear once again the positive impact that recourse to EU law may have for the effectiveness of judicial protection before domestic Courts, also in disputes which appear 33 34

35

36

Centro Europa 7 Srl v. Italy, para 156. On many occasions the Court has recalled the key importance of freedom of expression as one of the preconditions for a functioning democracy and that States must ensure that private individuals can effectively exercise the right of communication between themselves. See, for instance, Informationsverein Lentia and Others v. Austria, 24 November 1993, para § 38. Judges Sajó, Karakas¸ and Tsotsoria, joined in part by Judge Steiner, argued in their dissenting opinion that “an expert opinion, subject to an appropriate possibility for the parties to challenge it, would have enabled us to calculate at least the approximate amounts capable of redressing the damage. Moreover, this procedure would have opened the way for a friendly settlement which would have satisfied the requirements of fair compensation.” Centro Europa 7 Srl v. Italy, paras 214–21.

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totally “domestic”: CE7 did not claim any “supranational” nature of its activity, but the outcome of the case was still mainly based on European law. Framing the dispute in the context of the NCRF Directives rather than the national constitutional principles had the positive effect of allowing Italian courts to apply the Costa and Simmenthal principles, and therefore to “ignore” (set aside) the legislative provisions adopted by their own Parliament. In short, EU internal market rules and telecom Directives indirectly protected media pluralism in Italy. This story also shows the importance of the Strasbourg Court as a court of last resort for a final attempt to “correct” insufficient protection of fundamental rights before domestic Courts and the same ECJ. Moving beyond a purely legal analysis, the whole picture is much more complex, showing how weak a pure “judicial” response vis-à-vis serious violations of EU law and human rights law can be in situations where your opponent and potential competitor holds control of the legislative as well as of the executive power. Not surprisingly, notwithstanding the positive results “in principle”, the outcome of the story is far from satisfactory. In late 2008,37 after years of litigation, CE7 was finally granted an operating frequency that was squeezed out of the frequencies held by RAI, the public broadcaster (not one of Mediaset’s, as originally contemplated). CE7 complained before the domestic courts that the frequency it finally received was inferior in number and in quality to the one contemplated by the 1999 concession, making it difficult to reach large parts of the national territory. So litigation continued, until in 2013 a national Court handed down a decision in favour of the company, requiring the Ministry to grant the appropriate frequencies to it.38 Nevertheless, due to time lapse and to an incomplete analysis of the financial implications of the case in both the Council of State and the ECtHR, CE7 never really started its business and is currently (October 2016) facing bankruptcy: in the end, what we experienced as attorneys of the company was a Pyrrhic victory! With this unbalanced situation, where your competitor has in effect the power to set and implement the rules, there was little doubt that CE7 was destined to lose. A final lesson from this case is that, as previously mentioned, the CE7 saga makes clear enough that protection of pluralism in the media is too much a sensitive matter to be left to EU Member States individually. The Italian legal rules were insufficient to avoid that media power influenced the election results, and once a media tycoon gets political power, it is quite natural that 37 38

Council of State, Decision n. 2624 of 2008. Tribunale amministrativo per il Lazio, Judgment no. 03516/2013.

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he or she makes use of it to consolidate its dominance in the media markets with all the possible means, including the adoption of “friendly” legislation. The Italian case, after twenty years, is close to a “natural” solution, since Berlusconi has lost the recent elections. New alarms have emerged, however, in other Member States, which require a solid, common response. Despite numerous calls from the European Parliament, the European Commission took an initiative to harmonize national media ownership regulations, but never formally tabled a directive proposal, thus nipping in the bud any legislative initiative.39 To date, the reiterated requests for intervention by the European Parliament, most recently in a Resolution dated 10 March 2011, concerning the delicate case of Hungary, have gone unheeded. The question was revived in September 2012, when the European Commission set up a High Level Group on Media Pluralism, including among its members former AG Maduro, to provide a set of recommendations for the respect, support and promotion of media freedom and pluralism.40 They encompass limitations to media freedoms caused by political interference (state intervention or national legislation); limitations to media independence caused by political and economic interference; the issue of media ownership concentration and its impact on the freedom of media outlets; pluralism in the media; and the role and independence of regulatory authorities. Our wish is that the results reached in the Report presented in January 2013, in which the Group confirmed both that the EU is competent in this matter and that there is a need for legislation at the European level,41 will give a fresh impetus to a legislative solution, overcoming the obstacles (political more than legal) that have, at least so far, prevented its achievement.

39

40

41

It must be recalled that in the EU legislative mechanism the European Commission holds a monopoly in proposing new legislation (Article 17, para 2, Treaty establishing the European Union). On the failed attempt to intervene with a Directive harmonizing European laws governing media ownership, see Alison J. Harcourt, “EU Media Ownership Regulation: Conflict over the Definition of Alternatives.” Journal of Common Market Studies 36.3 (2002): 369–89; David Ward, “The European Union Democratic Deficit and the Public Sphere: An Evaluation of EU Media Policy.” The Public 8.1 (2001): 75–94; R. Craufurd Smith, Rethinking European Union Competence in the Field of Media Ownership: The Internal Market, Fundamental Rights and European Citizenship, European Law Review 652–73 [2004]; Idem, European Community Media Regulation in a Converging Environment, in Regulating the Internal Market, Niamh Nic Shuibhne (ed.), 105 ([Cheltenham], 2006). High-Level Group on Media Freedom and Pluralism. “A Free and Pluralistic Media to Sustain European Democracy.” Jan. 2013,http://ec.europa.eu/information_society/media_taskforce/ pluralism/hlg/index_en.htm Id.

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part iv

Market Integration Competition, Corporate and Private Law

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14 The Difficult Quest to Implement Cartel Control Grundig-Consten (1966) and Philip Morris (1987)

laurent warlouzet

introduction Cartel control has always been at the heart of the implementation of competition policies. In the European Union (EU), this power was enshrined in article 85 of the Treaty of Rome of 1957 creating the European Economic Community (EEC). This article is now article 101 TFEU, and remains the basis of EU cartel control. Article 85 §1 stipulated that some agreements hampering competition and “which are likely to affect trade between the Member States” were prohibited.1 Some examples of prohibited agreements are given in the article, such as price cartels. Authorization could only be granted if the agreement met several requirements listed in article 85 § 3 such as the promotion of technical or economic progress.”2 Article 101 TFEU has similar content. 1

Article 85 § 1 reads: “The following shall be deemed to be incompatible with the Common Market and shall hereby be prohibited: any agreements between enterprises, any decisions by associations of enterprises and any concerted practices which are likely to affect trade between the Member States and which have as their object or result the prevention, restriction or distortion of competition within the Common Market, in particular those consisting in: (a) the direct or indirect fixing of purchase or selling prices or of any other trading conditions; (b) the limitation or control of production, markets, technical development or investment; (c) market-sharing or the sharing of sources of supply; (d) the application to parties to transactions of unequal terms in respect of equivalent supplies, thereby placing them at a competitive disadvantage; or (e) the subjecting of the conclusion of a contract to the acceptance by a party of additional supplies which, either by their nature or according to commercial usage, have no connection with the subject of such contract.

2

Article 85 § 3 reads. Nevertheless, the provisions of paragraph 1 may be declared inapplicable in the case of: – any agreements or classes of agreements between enterprises, – any decisions or classes of decisions by associations of enterprises, and

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Those balanced provisions seemed rather straightforward at first glance. The main objective of the Rome Treaty was to create a common market. As a result, it seemed logical to target the cartels, which were the most detrimental to intraEEC trade. Otherwise, private trade barriers, like market-sharing agreements, would replace national trade barriers, such as custom duties and quotas. The implementation of EEC cartel policy has often been described as a progressive process of assertion by the European Commission, which could count on the support of the Court of Justice and of some pro-competition Member States, like West Germany.3 On the contrary, this article argues that the implementation of article 85 EEC was not a tale of a holy alliance between the Commission, the Court, and Germany to carry out a policy based on a straightforward interpretation of the Rome Treaty. It was rather the product of heated legal debates, as the examination of primary sources dealing with two major cases, Grunding-Consten in 1966 and Philip Morris in 1987, demonstrates.4 There were many divisions on the legal interpretation of article 85 EEC between the Commission, the Court, and national governments. In particular, there were many divisions between as well as within the Commission and the Court of Justice. EEC institutions were not united in their interpretation of the cartel provisions of the Rome Treaty. As a result, this article focusing on the legal debate is a complement to a recent historical examination on the development of EEC Competition policy up to 1991, which has adopted a more institutional angle.5 Thanks to

– any concerted practices or classes of concerted practices which contribute to the improvement of the production or distribution of goods or to the promotion of technical or economic progress while reserving to users an equitable share in the profit resulting therefrom, and which: (a) neither impose on the enterprises concerned any restrictions not indispensable to the attainment of the above objectives; (b) nor enable such enterprises to eliminate competition in respect of a substantial proportion of the goods concerned. 3

4

5

Both of these elements or at least one of them are present in many accounts coming from very different authors. For constrating examples, see: Schröter 1996, p. 149; Gillingham 2003, pp. 127–30, and 249. National archives of France, the FRG, UK, and EU archives have been consulted. These official archives are open after thirty years. On 1988–89, FOIA procedures have been used to get access to archives from the European Commission and national archives in the United Kingdom and in France. In Germany, private archives (‘Archiv des Liberalismus’ in Gummersbach) have been used on 1988–89. For a study based on archives from the 1960s to the 1989 merger regulation, see Warlouzet, 2016. More generally, on the history of EU competition policy, see also: Buch-Hansen and Wigger 2011; Büthe 2007; Cini and McGowan 1998, pp. 11–40; McGowan 2010; Patel and Schweitzer 2013.

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new material from the German archives, it pushes further an argument on the discrepancy between the Commission and the Court that was made earlier.6 Lastly, this paper is a contribution to the burgeoning literature on the history of EU law,7 shedding new light on the pioneering role of competition policy in the process of creating a federal law. The first section examines the basis of the EEC cartel policy: article 85 EEC of 1957 and Regulation 17/62 of 1962. The second section explores the first cartel case, the Gruding-Consten ruling of 1966. It underlines the deep division with the Commission and the Court, but also among French and German officials. The third section explores the Philip Morris case of 1987, not only because it contributed to the widening of the implementation of article 85 from cartels to mergers but also because it triggered deep internal divisions within the Commission.

the basis: the treaty of rome and regulation 17/62 The Treaty of Rome of 1957 was relatively vague on competition policy, as this issue was not one of the main bones of contention of the negotiations among the six founding members of the EEC (Belgium, France, Italy, Luxembourg, the Netherlands and West Germany). As a recent archival-based account of the Rome Treaty negotiation demonstrates, heated debates concentrated on the creation of the Common market, in particular on the exceptions to free trade that France, and to a certain extent Italy, wanted to secure.8 Other important questions included overseas territories (France still had a huge colonial empire) and the delegations of power to supranational institutions. Competition was not just a minor issue; it was not an issue at all. As a matter of fact, this concept did not exist in most EEC countries at the time. When the Treaty of Rome was negotiated, only two of the six founding members implemented what could be called, retrospectively, “competition policy” – France and the Netherlands. In France, it was labeled “the control of restrictive practices,” and was only a subpart of a much larger price policy. An extensive price control remained in place in France until 1986.9 In the Netherlands, a 1956 regulation on “Economic Competition”, which entered into force in 1958, did not prevent the country from being considered a “cartel heaven” throughout the golden age.10 Only in West Germany was competition 6 7 8 9

Warlouzet and Witschke, 2012. On this literature, see inter alia: Davies and Rasmussen, 2012; Vauchez, 2014. Warlouzet 2016, and Warlouzet 2011, pp. 21–100 and 273–76. 10 Künzler and Warlouzet 2013, pp. 99–100. Bouwens and Dankers, 2010, pp. 757–59.

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policy a full-fledged and autonomous public policy, implemented by a strong institution, the Cartel Authority called the Bundeskartellamt. However, the law establishing the modern German competition policy (after the allied decartelization law) dated back only from July 1957, a few months after the signature of the Rome Treaty. The provisions of the Treaty of Rome regarding competition policy contained many uncertainties regarding both substantive and procedural issues. The first problem concerned the economic and legal interpretation of article 85 EEC. Taking into account the list of exemptions in article 85 § 3, it was difficult to assess whether an agreement between several companies was valid or not. This was compounded by the relative lack of expertise with regard to national competition policy. In terms of procedural issues, the implementation of article 85 EEC (article 101 TFEU) regarding cartels and article 86 EEC (article 102 TFEU) on abuse of dominant position was left to article 87 EEC. It stipulated that a regulation to implement both articles was due to be adopted by the Council of Ministers unanimously before 1962, and by qualified majority voting later on. This regulation had to respect numerous criteria laid down in article 87 § 2, including “ensuring effective supervision” and “simplifying administrative control to the greatest possible extent”. Conflicting interpretations of these provisions emerged quickly. The first principle could support the delegation of power to implement the European competition policy at the Commission, without any interference from member states, while the second could imply the full preservation of national competition authorities’ remit. As a result, when the negotiations began about the regulation to implement article 87 EEC, many different schemes were devised. The solution of the centralization on the Commission eventually prevailed with Regulation 17/62, adopted in early 1962 after a compromise struck in December 1961.11 Regulation 17/62 was a milestone in the development of European competition policy. It gave extensive power to the Commission, which received a monopoly of information, via the notification procedure, and of decisions concerning the compatibility of agreement with article 85 EEC. The EEC was competent only if those agreements affected intra-European trade. A committee of Member State experts was set up, but it was only consultative. The Commission alone decided whether agreements between companies had to be banned under article 85 § 1 or could be granted an exemption under article 85 § 3. The European Court of Justice kept the right of judicial review. 11

On this choice of centralisation among many other alternatives, see Warlouzet 2016; Warlouzet 2011, pp. 269–338.

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The West German government was a strong supporter of the Regulation. Archives reveal that the main purpose of the German government was not to support a strong EEC competition policy, but mainly to avoid any contradiction between the EEC and national law.12 It was important to adopt an EEC interpretation that was as close as possible to the German law of 1957, as the latter was adopted only after a long and protracted debate. Bonn secured Regulation 17/62, which followed the principle of prohibition, like the German law, whereas other states defended the principle of abuse. It was also important for Germany to uphold the idea of a strong competition policy, independent from other economic policies. The German legislation was the most important source of inspiration for Regulation 17/62, but the latter did not strictly follow the German law. In particular, competition policy was not implemented by an independent authority, as the Bundeskartellamt was. During the negotiations, some German experts even suggested creating an independent European authority to implement article 85 EEC. This shows how important the German model of competition policy was, but also how flexible the interpretation of the Treaty of Rome was. The outcome of Regulation 17/62 was not the only one possible as article 85 and 87 EEC could have been translated into many other institutional arrangements, such as the creation of an independent authority, an association between EEC and national authority in the decisions-making process, or the solution eventually chosen of a large centralization of the decision-making process on the Commission.13 However, the West German government was not always in favour of a stricter competition policy. For example, the French policy against vertical agreement was more severe than that of its neighbours, including Germany, as the German law targeted horizontal rather than vertical restraints.14 French decision-makers were very keen to modernize the French distribution sector in order to control inflation. The focus of competition policy in France was thus on commercial practices like a ban on refusals to sell (i.e., situations where, for example, a company refuses to sell its product to a distributor). They were severely condemned because they hampered the development of modern forms of stores such as supermarkets. Small retailers put pressure on their suppliers to limit their sales to these new competitors, and the suppliers themselves were keen sometimes to prevent the development of these new

12

13 14

Gerber 1998, p. 346–49; for an account based on new primary sources (archives in three countries and of the European Commission), see Warlouzet 2016. On those institutional alternatives, see Warlouzet 2016. Riesenfeld 1962, p. 473; Gerber 1998, p. 295.

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actors.15 This type of commercial practice can be considered a vertical agreement as they link a producer and a distributor. By contrast, a horizontal agreement concerns companies at the same stage of the production process (for example, two car producers). Thus, French officials adopted a rather strict policy with regard to the distribution agreements. They supported the inclusion in the cartel regulation of a provision allowing a strict EEC competition policy in this field. This Franco-German debate on vertical restraints bounced back when Regulation 17/62 was implemented to a distribution agreement, the Grundig-Consten case.

hesitations over vertical agreements: grundig-consten (1966) After the coming into force of Regulation 17/62, the Commission received many notifications of vertical agreement, in particular exclusive distribution agreement by which a producer in one country granted a monopoly to sell a product in another country to one distributor. Distribution agreements were crucial for the process of European integration, but they were hard to gauge from the competition policy point of view. An exclusive distribution agreement could be beneficial for the integration of national markets if it allows a product to be sold more easily in another country. In particular, exclusive dealing agreements are necessary to sell complex products which require aftersale service, such as cars or electronics products. A monopoly is granted in exchange for an increase in inter-brand competition, and for a better service for the consumer. Members of an exclusive distribution agreement can prosecute distributors which sell the products outside the agreement as they are considered as ‘free-riders’: they sell a product without paying a fee to the producer and without contributing to after-sale service. However, if the exclusive distribution agreement is too tight, competition can be hampered. This is especially the case if the agreement forbids parallel imports by other resellers. The Commission must assess first whether the exclusive distribution agreement falls in the remit of article 85 § 1 banning some international cartels, and second whether the agreement can be cleared thanks to the provisions of article 85 § 3 listing exemptions. More generally, the example of exclusive distribution agreement demonstrates how hard it is to implement competition policy. Some cartels are clearly detrimental, but most of them are in fact classical contracts between companies that are necessary for the day-to-day functioning of a market economy. 15

Adams 1989, pp. 223–28.

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The Commission used Regulation 17/62 for the first time on 23 September 1964. It banned an exclusive distribution agreement between a German producer of television sets, Grundig, and a French distributor, Consten. Consten sold the Grundig products on the French markets. The Commission banned the agreement because the territorial protection of the distributor ‘sales was too strict’.16 In particular, the agreement prohibited parallel imports, thus limiting intra-brand competition within the Common Market. The case originated in France, where Consten sued another distributor, the French company UNEF. It argued in a French court that UNEF resorted to parallel imports to sell Grundig products in France and thus infringed upon the exclusive dealing agreement between Grundig and Consten, which forbade those parallel imports. The context of the early 1960s was quite peculiar: France used to be a relatively protectionist country in the 1940s and the 1950s, but the Rome Treaty of 1957 triggered a lifting of quotas and a reduction of intra-EEC custom duties. Actors such as UNEF seized this opportunity to buy products abroad directly, without the extra-cost of concluding an exclusive dealing agreement. It even went further by using EEC law in French Court, a rarity in the early 1960s. UNEF sent a letter to the Commission invoking article 85 EEC against the Grundig-Consten exclusive distribution agreement. Then, the French Court suspended the trial and requested the Commission to interpret article 85 EEC (today article 101 of TFEU). The Grundig-Consten decision was especially important as it developed a doctrine first on the admissibility of exclusive dealing agreements, and second on the banning of strict clauses about parallel imports. It still figures prominently in most textbooks on EU law, as the basis of a multi-decade jurisprudence.17 Paradoxically, UNEF’s use of the EEC law reversed the French trial. The defendant (UNEF) not only defeated the instigator of the trial (Consten), but also threatened many French exclusive dealing agreements with this EEC jurisprudence. However, the Commission was quite slow in its interpretation of article 85 EEC. The decision in the Grundig-Consten case took two and a half years after the passing of the Regulation 17/62. After this landmark case, the Commission took only a handful of formal decisions. Specifically, only four decisions were formally taken between Grundig-Consten and the completion of the Common Market by the elimination of custom duties in July 1968.18

16 18

17 Decision 64/566/CEE, 23 Sept. 1964. Fox, 2009, 791–99.  DRU-Blondel (n 65/366/CEE, 8 July 1965); Hummel-Isbecque (n 65/426/CEE, 17 September 1965); Maison Jallate-Hans Voss (n 66/5/CEE, 17 December 1965); Transocean Marine Paint Association (n 67/454/CEE, 27 June 1967).

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The difficulty to decide was linked to obvious institutional problems. The implementation of Regulation 17/62 was left to the “Directorate General IV” (now DG Competition), a sectoral unit of the European Commission placed under the responsibility of the Commissioner for Competition Hans von der Groeben. It seems that von der Groeben and the DG IV did not anticipate that they would have received more than 36,000 notifications of agreements in a few months. As a young institution of limited size, the Commission was unable to issue a decision smoothly on such a new and technical subject.19 Most of the notifications concerned vertical agreements. As a result, the focus on vertical agreement can be explained both for economic reasons – as distribution agreement could be an important tool to foster intra-EEC trade – and for institutional reasons, to solve the bulk of the backlog. In the Grundig-Consten case, the urgency was even greater, as the Commission had to answer a national Court request on the interpretation of the Treaty. Another problem was the internal divisions of DG IV. It was largely dominated by people influenced by the German experience. The Dutch Director General verLoren van Themaat sometimes disagreed with some of the German staff as he tried without success to promote a more neo-corporatist system.20 He was influenced by the Dutch national experience, but he did not succeed in promoting it, as the institutional framework of Regulation 17/62 demonstrates. At the same time, von der Groeben was reluctant to make a decision. These divisions were an important factor to explain the delays in the decision-making process. These difficulties were compounded by the fact that Grundig-Consten was contested not only by the companies but also by Germany. The representative of the German government at the advisory committee voted against the proposed decision by the Commission to ban the agreement (but he was outvoted since his opinion was only consultative).21 The German government supported exclusive dealing agreements, as they were useful to penetrate foreign markets. The two condemned companies challenged the Grundig-Consten decision before the Court of Justice. Italy supported them as it contested the power of the Commission in this remit. German officials hesitated before supporting

19 20

21

Mc Gowan 2010, pp. 128–29; Warlouzet 2016. French national archives, Foreign affairs ministry, RPUE 615, note Cuvillier, 11 February 1964; EU archives, HistCom1, interview of Manfred Caspari, 18 February 2004, p. 18; Seidel 2010; Ramirez and van der Scheur, 2013, p. 27–28. German national archives, B 102/259100, note BMWi, 1 June 1965.

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this appeal against the decision Grundig-Consten.22 There was a consensus against the economics of the decision of the Commission, but the political case was more complicated. The German government supported the development of the EEC in general, and of European competition policy in particular, so if the Court overturned the first significant decision taken by the Commission in this remit, it would be a severe blow to the European integration process. In the end, Germany decided to support the appeal against the Commission. A German official from the Minister of Economics, Ulrich Everling (a future judge at the European Court of Justice), consulted with Karl Roemer, the German Advocate General of the European Court of Justice.23 Everling is known as a German official particularly wary of the development of European law as a supranational law with direct effect. He reacted negatively to the Van Gend en Loos ruling of 1963.24 For him, EC law was part of standard international law. The stakes were high for the Commission. Against it were the two big states usually portrayed as pro-integration: West Germany and Italy. The third big state, France, had an ambivalent position. On the one hand, French President Charles de Gaulle directly attacked the Commission at the very same period. During the Empty Chair Crisis, which lasted from July 1965 to January 1966, de Gaulle withdrew French government representatives from EEC institutions to protest against the Commission’s plan to increase its powers.25 On the other hand, recent research by Alexandre Bernier suggests that other French officials, ministers, and lawyers supported the Commission’s interpretation in Grundig-Consten as it buttressed the domestic competition policy, and its severe stance against vertical agreements.26 Parallel imports were useful to lower prices, and hence to limit inflation. More generally, despite de Gaulle’s nationalist rhetoric, the French European policy was hugely supportive of the EEC as it provided direct advantages for France.27 The EEC offered a comfortable framework to progressively open the French economy to free trade, and it provided financial transfers to French farmers and to former French colonies.

22 23

24 26

27

German national archives, B 102/259100, notes BMWi, 1 and 15 June 1965. German national archives, B 102/259100, notes BMWi, Everling, 14 July 1965 and 7 October 1965. 25 Davies 2008, p. 67. On the Empty Chair Crisis, see Ludlow, 2006, pp. 68–123. See chapter 4 of Alexandre Bernier’s Phd, Summer 2017 and entitled: Bernier, A., La France et le droit communautaire Histoire d’une réception et d’une co-production (1958–1981), PhD supervised by Morten Rasmussen, University of Copenhagen, 2015. This is the main argument in Warlouzet, 2011.

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In the end, the ECJ ruling of 1966 broadly supported the Commission’s interpretation.28 The Court contradicted the advice of Advocate General Karl Roemer, who advocated for the reversal of the decision.29 He thought that the economic evidence presented by the Commission was too narrow and that the institutional consequences of the decision were too far-reaching. Roemer was known for his caution in the debate over the assertiveness of the Court.30 This is probably why he was approached by Everling. Born in 1899, Roemer was judge at the Sarrebrück Appeal Court (1947–52) where he defended German authorities in the framework of the specific occupying regime of Saarland, a German region disputed with France. He led special missions on behalf of the federal government abroad before becoming Advocate General at the Court of Justice in 1953.31 However, the support of the Court was not total. The Commission’s decision to cancel the entire exclusive distribution agreement between Grundig and Consten was reversed. The Court confirmed only the condemnation of the agreement’s excesses, in particular the exclusive territorial protection by the banning of parallel imports (Article 3 of the Commission’s decision). The other parts of the contract were still valid. Additionally, the Court recognized that distribution agreements were not harmful as such. It specified that agreements should be condemned for economic reasons only if they ‘distort competition to an appreciable extent.’ However, despite this favourable decision on cartel, the Commission was still held back by the backlog: there were still more than 3,500 cases pending on 31 December 1986.32 When he became Director General for Competition in 1990, Claus-Dieter Ehlermann considered his main task, with regard to cartels, was to alleviate the burden of the remaining 3,000 cases waiting for a decision.33 Ehlermann was a well-known specialist of EEC law, in particular as a former Directorate General of the Legal Service between 1977 and 1987.

28

29

30 31

32 33

Judgment of the Court of 13 July 1966, Consten and Grundig vs. Commission, joined cases 56 and 58–64, ECR 299. ‘Conclusions de l’avocat général M. Karl Roemer, présentées le 27 avril 1966’, In Recueil de jurisprudence de la Cour de Justice des Communautés européennes (Luxembourg: Cour de justice des Communautés Européennes), 1967, pp. 507–56. Davies, 2008, p. 64; Rasmussen, 2008, pp. 92–93; Vauchez, 2007, p. 147. Official biography of Karl Roemer on the EU Court of Justice’s website: http://curia.europa.eu/ jcms/jcms/Jo2_7011/ (accessed 28 September 2015). European Commission, 1987, p. 55. Interview of the author with Claus-Dieter Ehlermann, Brussels, 31 July 2013.

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lasting divisions over philip morris (1987) The Philip Morris judgment of November 198734 is a famous landmark in the history of European Competition Policy. It is considered one of the most important factors that brought about the end to the twenty-six-year-long negotiations in the Council regarding merger control. The Treaty of Rome gave no power to control mergers to EEC authorities. The Commission tried to gain such prerogative by proposing a Merger Regulation to the Council in July 1973. It purported to provide a procedural framework that would have been roughly analogous to Regulation 17/62. The proposal sought to establish a system of notifications to the Commission, which would then have exclusive competence to decide on the compatibility of large mergers with the Treaty of Rome. Nevertheless, the Member States were not interested in granting such an important power to the Commission, so the Merger Regulation became one of many proposed legislations lost in the troubled waters of the Council. However, it resurfaced after the Philip Morris ruling of November 1987. In December 1989, the Member States finally granted the Commission the power to monitor concentrations between companies with Regulation 4064/ 89, twenty-six years after the first proposal.35 In the Philip Morris judgment, the European Court of Justice (ECJ) gave a broad interpretation of the Treaty of Rome that increased the power of the Commission with regard to merger control, while leaving many questions unanswered. As it created strong legal uncertainties for companies, in a context of a rising number of international mergers in the run-up to the completion of the Single Market, much pressure was put on national governments to agree on the long-awaiting merger regulation. The momentum created by the Philip Morris judgment is considered the most important factor leading to the adoption of the merger control regulation by the most convincing accounts of the merger negotiation.36 For Mark Pollack, ‘in the 1989 Merger Control Regulation, the member governments responded to business demands and to the largely unexpected and unwelcomed consequences of the Philip Morris decision by delegating explicit powers and wide discretion to the Commission.’37 For Tim Büthe and Gabriel Swank, ‘by the time the Member States “agreed” that the Commission should

34

35

36

British-American Tobacco Company Ltd and R. J. Reynolds Industries Inc. v Commission of the European Communities, 17 November 1987, cases 142 and 156/84, ECR 4487. Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings. 37 Büthe and Swank, 2007; Pollack, 2003, pp. 284–91. Pollack, 2003, p. 291.

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have the power of merger review (as specified in the 1989 Merger Regulation), the Commission had already acquired this power anyway . . . thanks to private, subnational actors’ which reacted to the Philip Morris ruling.38 Even accounts that put a stronger emphasis on Member State bargaining recognize the importance of the ruling.39 A recent overarching interpretation of the history of EEC competition policy has underlined the role of a long-term historical institutionalist dynamic in the conclusion of the merger regulation, but it has not dismissed the role of the Philip Morris ruling either.40 The Philip Morris case involved three tobacco companies: US company Philip Morris, the South African Rembrandt, and the British Rothmans. Rembrandt had a controlling share in Rothmans. In April 1981, Philip Morris proposed to buy from Rembrandt a large stake in Rothmans. From the competition point of view, the whole issue revolved around the extent to which the operations between Philip Morris and Rothmans were coordinated on the EEC market. Both of these companies were large multinationals. If their operations were too intertwined, the operation could be considered as a cartel, or even as a merger between major players on the market. If this association were too powerful, it would threaten fair competition in the EEC. The proposal was unveiled in 1981, and the British and American competition authorities cleared the deal. The German authority was more critical, but its remit was limited to the German subsidiaries. As a result, two competitors of Philip Morris, BAT (British-American Tobacco) and Reynold, turned to the Commission. They used Regulation 17/62 to complain about this agreement, arguing that it infringed upon EEC competition law. The Commission examined the case in 1982. On the one hand, the Legal Service was against the agreement. John Temple-Lang explained: When, as a result of an agreement, two actual or potential competitors together own a subsidiary which sells its products on the same market, the fact that it is contrary to the economic interests of each of the parent companies to compete with their subsidiary . . . is an effect of the Agreement on competition within the meaning of article 85 (1). For this theory to apply, it is not necessary that there should be any clauses restricting competition in the agreement, or any proof of the likelihood of direct cooperation, or coordination between the three companies or groups (although these arguments can and should be made if appropriate, as in this case). It is enough that it is economically rational for each parent, acting unilaterally in its own interests, to avoid competing with its subsidiary. 38 40

Büthe and Swank, 2007, p. 28. Warlouzet, 2016.

39

Armstrong and Bulmer, 1998, pp. 100–06; Bulmer, 1994.

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Temple-Lang considered that the agreement fell under article 85(1), which bans cartels. His reasoning was more economic than formalistic: even if there was no formal contract that could be considered as a cartel, a cartelization process could occur as he explained above. In February 1983, Claus-Dieter Ehlermann, the then Director General of the Legal Service, accepted this argument. He considered that Philip Morris’s joint-venture agreement triggered a ‘presumption’ that the three companies would ‘coordinate their behavior on the market’.41 In the meantime, Philip Morris negotiated with the Commission to propose a better agreement. On 7 December 1982, the law firm Allen & Overy, representing Reynolds (opposed to the Philip Morris deal), complained that ‘through a well-known political figure, Philip Morris has recently begun to lobby at the highest levels in relation to this case.’42 In his analysis of the letter, the Director General for competition policy (DG IV), the German Manfred Caspari, mentioned a visit by Henri Simonet to Frans Andriessen to defend the case of Philip Morris.43 It is not clear what Simonet’s precise role was. He might have been the ‘well-known political figure’ lobbying in favour of Philip Morris. Henri Simonet was a Belgian socialist politician who was a member of the Commission from 1972 to 1976, who, as a result, probably had easy access to the Commission. In May 1983, an internal note by Philip Morris summarized the extensive lobbying campaign undertaken by the companies. Logically, companies’ representatives met officials from the Commission, as was expected, but also Dutch officials and Henri Simonet, who did not have any official responsibilities in the EEC institutions in those days.44 On 18 July 1983, Temple-Lang sent a new note with three main arguments to ban the deal.45 Besides the aforementioned economic reasoning, he added a legal argument: the agreement was already partly condemned in Germany. This shows that it is contestable, particularly if the Commission does not order any improvements to the arrangements, especially through divestiture. Temple-Lang also added a political argument: ‘In view of the health risks of smoking and the financial condition of the cigarette industry, the industry is not one which the Community needs to encourage or to treat especially favorably.’ For him, the Philip Morris decision should be condemned from the economic, legal and political points of view.

41 42 43 44 45

EU archives, BDT 176/95/809, note from van der Esch to Ehrlermann, 2 February 1983. EU archives, BAC 176/95/808, letter from Allen & Overy to Andriessen, 7 December 1982. EU archives, BAC 176/95/808, note to Caspari, 10 December 1982. Note from Philip Morris, 20 May 1983, available at: http://legacy.library.ucsf.edu/tid/kzj02a00 EU archives, BDT 176/95/ 809, note from Temple-Lang (legal service), 18 July 1983.

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However, Commissioner Andriessen was ready to negotiate with the companies and set his conditions, such as a reduction in Philip Morris’s holding in Rothmans.46 Eventually, Philip Morris made concessions in a new agreement, which would weaken its grip over Rothmans by diminishing its percentage of shareholding. It was completed by undertakings aimed at ensuring that Philip Morris was not represented in the management of Rothmans International, and to limit the transmission of strategic information from the latter to the former.47 DG IV eventually decided to clear the new agreement, but the Legal Service remained hostile.48 After a debate within the College of Commissioners, the European Commission decided on 22 March 1984 to officially clear the deal. In June 1984, the plaintiffs BAT and Reynolds decided to contest the Commission’s decision at the ECJ. In its ruling of 17 November 1987, the ECJ rejected their request. The Commission was right to consider that article 85 and article 86 EEC did not apply. In addition, the Court stated that article 85 could apply to minority shareholders. The ruling was hailed as a success for the Commission as it interpreted article 85 as a tool to control certain types of mergers directly, without the need of any regulations. Nevertheless, from the legal point of view, it was clearly too specific to bring about a revolution. The Commission’s Legal Service considered in its internal opinion on the Philip Morris judgment that it was insufficient to provide a solid basis for a sound European merger policy.49 Grounds 30 and 31 of the case specifically limited the judgment to the case of minority shareholding. Ground 31 stipulated that the agreement involved ‘companies which have remained independent after the entry into force of the agreements’. As a result, it left unanswered questions concerning the acquisition of a majority shareholding, or of total ownership, of a competitor, i.e. full mergers. Lastly, using article 85 EEC on ‘agreements between undertakings’ as a basis to control merger would leave many forms of mergers and acquisitions outside its scope, such as hostile takeovers. In this case, there is no ‘agreement’ by definition. Either future case law or a new regulation was necessary to overcome these uncertainties. After Andriessen left his position in 1985, the new Commissioner for Competition, Peter Sutherland (1985–89), seized the opportunity to prosecute mergers directly in 1988 by unilaterally relying on article 85 EEC.50 His

46 47 48 49 50

EU archives, BDT 176/95/809, note DG IV, 27 July 1983. Ground 9 of the Philip Morris judgment. EU archives, BDT 176/95/809, notes of the Legal Service, 2 December 1983 and 5 March 1984. EU archives, BAC 104/1993/159, note by Dewost, 25 January 1989. Bulmer, 1994, p. 431; Pollack, 2003, p. 286.

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strategy was to put pressure on the companies, which would in turn influence Member States to agree on a regulation in the Council. A regulation was the only way to set up an institutional framework that could provide legal certainty and predictability. However, while Sutherland managed to put the regulation back at the top of the Council of Minister’s agenda, he did not succeed in convincing all Member States to vote on it. Indeed, the unanimity was required at the Council of ministers, as the regulation was not based on articles 85 EEC or 86 EEC, which provided an insufficient basis, but on article 235 EEC (now article 352 TFEU), on new competences given to the EEC. The successful completion of the negotiation fell to the successor of Peter Sutherland as commissioner for competition, Leon Brittan (1989–93). Both of them were deeply committed to the passing of this legislation. The Irishman Peter Sutherland was both a federalist and committed to the development of free markets, whereas the British Leon Brittan was a Thatcherite following an ideological agenda of scaling back dirigiste economic policy.51 Eventually, on 21 December 1989, the Member States adopted Regulation 4064/89 which gave the Commission the power to regulate mergers which could affect intra-EEC trade, including by banning them. Even when the regulation on merger control was passed, the Commission’s authority in this remit still remained to be proved. As early as April 1989, John Temple-Lang, now at the DG IV, underlined that enquiries on mergers were complex and required an extensive economic analysis.52 The Commission authorized most mergers, but it took a handful of spectacular decisions. In 1991, it banned the sale of Canadian aircraft manufacturer De Havilland by the French-Italian company ATR.53 This triggered an outcry in France, as the Commission was seen as preventing the reinforcement of European industrial champion, that is to say companies based in several EEC countries and large enough to compete with the dominant US players. EU competition policy clashed with European industrial policy. In 1997, the Commission banned the merger of two giant US companies, Boeing and McDonnell Douglas.54 Both of these decisions had a huge political impact, and demonstrated the newly acquired powers of the Commission.

51

52 53

54

Cini/Mc Gowan, 1998, p. 31; Joana and Smith, 2002, pp. 129–32; interview by the author with Peter Sutherland (8 September 2011, London) and former officials from DG IV (Jean-Louis Cadieux, 19 November 2010, Paris). EU archives (FOIA), BAC 104/1993/160, note Temple-Lang for Caspari, 6 April 1989. Commission Decision of 2 October 1991 declaring the incompatibility with the common market of a concentration, case No. IV/M053 - Aerospatiale-Alenia/de Havilland. Commission Decision of 30 July 1997 declaring a concentration compatible with the common market, case No IV/M.877 - Boeing/McDonnell Douglas.

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However, the record of the Commission became blurred in the early 2000s when the Court of First Instance overturned two decisions to ban mergers in 2002 for lack of economic evidence.55 These decisions paved the way for the “modernization” of EU competition policy in the early twenty-first century.56 At this point, the twin uncertainties about article 85 EEC, regarding the substantive and the procedural issues, resurfaced. They were reinterpreted in a new direction. On the one hand, a “more economic approach” was implemented to buttress the Commission’s legal judgment with a sounder economic analysis. In a sense, this was a response to the criticism voiced by Temple-Lang as early as the 1980s. On the other hand, the notification procedure of Regulation 17/62 was shelved. More power was delegated to national competition authorities, while the Commission kept an important steering power.

conclusion The implementation of article 85 EEC (now article 101 TFEU) was not straightforward. It was not a mechanical process deriving naturally from the Treaty of Rome. In fact, most of the actors traditionally associated with the development of a strong European competition policy – the Commission, the Court of Justice and the German government – were divided over the first cartel case, Grundig-Consten. The Commission officials were hesitant. The Court broadly confirmed the Commission’s decision but it overturned important parts of it. Moreover, the ruling did not prevent the Commission from being stuck with the backlog for decades. In terms of Member States, the traditional vision of a pro-EEC West Germany opposed to a sceptical France under de Gaulle must be reversed in this case. The German government opposed the severe stance of the Commission against distribution agreements. Paradoxically, while the French President de Gaulle strongly attacked the Commission with the Empty Chair crisis of 1965–66, other French actors were more supportive of a strict policy against vertical agreement such as Grundig-Consten. In the meantime, German officials were using EEC procedures and were consulting the Court of Justice’s Advocate General to contest the ruling. Things changed with Philip Morris, as the case was both a vindication of the Commission’s decision and a great help to obtain the long-awaited merger regulation. However, the detailed study of the negotiation shows that the 55 56

Air Tours/First Choice (6 June 2002) and Schneider/Legrand (22 Oct. 2002). Gerber, 2007.

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Philip Morris case was by no means a straightforward successful strategy from start to finish. To begin with, the Commission was divided on the case, with the Legal Service against the agreement eventually accepted by DG IV and the College of Commissioners. Paradoxically, Philip Morris was a positive decision to clear a cartel, and not a negative decision designed to assert the Commission’s authority. It was the prudent approach of Andriessen in 1983–84 that brought about a major legal breakthrough a couple of years later. Lastly, the debates of the 1980s over this case, and about merger policy in general, revealed many uncertainties in the economic judgement of the Commission when it implemented article 85 EEC. This eventually paved the way for the “modernization” of EU competition policy in the early twenty-first century. The adoption of Regulation 1/2003 on cartels and 139/2004 on mergers materialized the outcome of this process. The issue remains contentious today, as a recent statement by Wolfgang Schaülble demonstrates.57 The influential German Minister of Finance considered that some of the Commission’s prerogatives in competition policy should be handed over to an independent authority, as the Commission was deemed too political to exert its function of umpire in a neutral way. German actors had always been wary that the Commission, which as both a technical and a political body was geared by considerations of economic and social policy rather than by a strict legal interpretation of the Treaty. The context of economic crises since 2008, which triggered the distribution of many direct and indirect aids by public authorities to companies, further compounded this concern. This is why the possibility to create an independent authority to implement the cartel provisions of the Treaty of Rome has resurfaced in 2015. This possibility was previously raised during the negotiations of Regulation 17/62. Despite the passage of more than seventy years, the interpretation of article 85 EEC, now article 101 TFEU, is still open to debate.

57

Manfred Schäfers, Werner Mussler and Philip Plickert, “EU-Politik Schäuble hat Reformplan ohne Gabriel ausgeheckt”, in Frankfurter Allgemeine Zeitung, 30 July 2015, www.faz.net.

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15 The Cassis Legacy Kir, Banks, Plumbers, Drugs, Criminals and Refugees

kalypso nicolaı¨ dis

Who has never tasted Kir Royal, an elixir that combines Champagne and the French liquor Cassis de Dijon? The European law story told in this chapter starts from the shocking fact that until 1979, not a soul had been allowed to experience the joys of Kir on German soil. It is a story that has been told countless times, although differently by lawyers and political scientists. For Euro-Kir not only comes in differently shaped bottles (Court decisions, Council-EP decisions, Commission communication and single country regulations); it also comes in shades of red. Political scientists tend to see the bottles, legal scholars the subtle variation in shades. The former focus on the balance between free movement and local safeguards, market integration and regulation, the European economic constitution and state autonomy – and in between, many degrees of equivalence and subtle assessments of proportionality.1 Political science, on the other hand, asks about the before and after, the role of politics in legal judgments and vice versa – the ‘why’ and the so ‘what’. Of course, the ‘so what’ feeds back into the ‘why’ as the European Court of Justice (ECJ) considers the plausible institutional alternatives to its own decisions, and the ways in which the jurisprudence can be translated into laws. This conversation between lawyers and political scientists is what Miguel Maduro and Loïc Azulai sought to capture in their 2010 book. This current volume in turn brings together historians of law who can best capture the dance between these two worlds as analyzed by Joseph H. Weiler in 1991.2

1

2

Since the first version of this chapter was written, Christine Janssens published an impressive review of the jurisprudence which starts by citing Kir Forever. See C. Janssens, The Principle of Mutual Recognition in EU law, Oxford University Press, 2013. J. H. H. Weiler (1991) ‘The Transformation of Europe’. Yale Law Journal, Vol. 100, No. 8, pp. 2403–83.

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In this chapter I ask: How did a judgment about a liquor end up changing the European constitutional order? And after almost four decades, have the expectations created by the groundbreaking 1979 ECJ ruling been fulfilled? My recounting of the legacy of Cassis de Dijon seen through an impressionist account of its ripple effects in the political sphere puts perhaps more emphasis on the legacy than the genesis of the case.3 But I hope that my use of a personal venture points as a heuristic can provide an interesting variation for legal scholars and historians concerned as the editors of this volume are with the embeddedness of Europe’s jurisprudential saga. I proceed one decade at a time, with my own journey in the landscape of mutual recognition, moving from the Single Market to Justice and refugees, to transatlantic affairs: Cassis in Action (1980s), Cassis Fever (1990s), Cassis on Trial (2000s); Cassis Stress Tests (2010s) and Cassis across the Seas (2015). I conclude with some reflections on European democratic politics.

cassis in action (1980s): founding myth, conspiracy and revolution We are in 1989. Is it too grand to believe that mutual recognition will be the future not only of regional integration but also of multilateralism?4 When I recently asked Lord Cockfield, Commissioner for the internal market, what he considered the greatest achievement of his career, he answered without a beat: to have exported Cassis from the European Court of Justice and goods to the singlemarket Europe 1992 program. Indeed, there are many like him in the Commission who seem to believe that without Cassis and the aura of legitimacy it lent to their ‘new approach’, they would not have been able to pull through the legal coup spelled out in Cockfield’s White Paper as endorsed by Member States through Delors’ Single Act only three years ago. An EU without Cassis may have had to endure a loss of several points of GDP growth, otherwise known as the ‘cost of non-Europe’.5 Well, that might be true, but the Cassis story as it is told in the shadow of the Europe 1992 project rests on a number of widely held myths which end up obscuring the true import of this famous case. . 3 4

5

Case120/78 Rewe Zentral AG v Bundesmonopolverwaltung fur Branntwein [1979] ECR 649. “Mutual Recognition: The Next Frontier of Multilateralism?,” Project Promethee Perspectives, Paris, July 1989. 1988 Checchini Report on the “cost of non-Europe” as an incentive for the completion of the single market.

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First myth, the Cassis judgment itself is not quite what the pan-Cassis rhetoric would lead us to believe. True, the facts of the case seem strikingly straightforward: the blackcurrant liqueur produced in France as Crème de cassis had been banned from Germany because it contained 15 per cent to 20 per cent alcohol by volume, and German law stipulated that products sold as fruit liqueur had to contain at least 25 per cent alcohol by volume – leading the German Ministry of Finance to advise Rewe that it could not market Cassis in Germany. The ECJ not only held that this could be considered “a measure having an effect equivalent to a quantitative restriction on imports” of the type banned by Article 30; it also took it upon itself to spell out its thinking in more general terms, what would come to be referred to as a principle of equivalence: “There is therefore no valid reason why, provided that they have been lawfully produced and marketed in one of the member states, alcoholic beverages should not be introduced into any other member state.” Nowhere in the judgment does it call this a duty of mutual recognition. But the message is clear.6 What the pan-Cassis rhetoric forgets to say, however, is that Cassis was not only about casting the net of Article 34 TFEU more widely (after all, this had been done earlier in Dassonville), but most importantly, it was about widening the Article 36 TFEU holes in the net through which fishy state regulations would be able to escape the rigors of liberalization. Indeed, the judgment started by explaining very clearly that “obstacles to movement within the Community resulting from disparities between the national laws . . . must be accepted in so far as those provisions may be recognized as being necessary in order to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer”. In short, an open-ended list of “mandatory requirements” covering the public interest would have to be examined before considering home rules as equivalent to host rules and therefore host rules as equivalent to quotas. It was only because the (German) requirements relating to the minimum alcohol content of alcoholic beverages did not “serve a purpose which is in the general interest” (lowering alcohol consumption), that it was OK to bypass them. Here is the 6

Clear except for a complication at the outset with regard to the notion of equivalence. As the attentive reader will note, equivalence in the legal lexicon refers to two different things. On the one hand, the “equivalent effect” between a regulatory measure X and a quantitative measure Y (both presumably taken in the host state); on the other, the “(functional) equivalence” between that measure X (in the host state) and measures Y (in the home state) that underpin the “lawfully produced and marketed”. The two equivalences are not, of course, equivalent, but it is a finding of the first that leads to an assessment of the second.

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reasoning: (1) non-discriminatory (or “indistinctly applicable”) measures can favour domestic traders over importers; (2) this does not imply that they are obstacle free movement; (3) they can be justified if they satisfied mandatory requirements; (4) to assess that we need a Rule of Reason whereby the court performs a proportionality exercise to determined whether the effects of the national legislation on the free movement of goods is justified in light of that legislation’s stated goals. This leads us to the second myth. Cockfield’s white paper peddles the myth that Cassis ‘introduced’ mutual recognition in the EC legal landscape. Well, of course lawyers know that the real radical breakthrough came in 1972 with Dassonville, in which the court had to decide once again what was meant by the Treaty of Rome’s summary statement, “Quantitative restrictions on imports and all measures having equivalent effect shall, without prejudice to the following provisions, be prohibited between Member States” (Article 30). At the time, it boldly struck down a Belgian provision (requiring that imported goods bearing a designation of origin be accompanied by a certificate of origin) with a sweeping approach: “all measures with an equivalent effect to quotas” were to be struck down! This was already and much more radical than Cassis in terms of results, an obligation of recognition. But it did not enunciate mutual recognition, and was in fact set aside as too bold. In this sense, Cassis was not a continuation but a break from Dassonville, which sought to impose an obstacles-based approach to national regulation, whereby all national rules are potentially subject to an assessment of illegality. More to the point, mutual recognition can be found in the Treaty of Rome itself, referring to the mutual recognition of diploma, a task finally tackled seriously this year with the general system directive. Indeed, the whole philosophy was defended with great passion by Ralph Dahrendorf, who was able to make limited progress in applying mutual recognition in the professions when he became Commissioner in 1974. The third myth is that the gap is even wider between the pan-Cassis rhetoric and the actual ECJ jurisprudence of the last ten years when reviewing MEQRs (Measures equivalent to a quantitative restriction) under Article 34 and then Article 56 TFEU for services. Take one of my favourites, the Woodworking machines decision.7 French workers will not have the privilege of using those automated German machines built for their better-trained counterparts across the Rhine. Simply put, the characteristics of the machines

7

ECJ, Case 188/84 Type approval for woodworking machines [1986] ECR 419.

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themselves combined with the respective training systems are simply not equivalent. This is wise if the judges do not relish the prospect of receiving a finger in the mail! As for services, not a modicum of liberalization has survived the tests of mandatory requirements and the rule of reason. Even in the insurance decision three years ago,8 the judges felt that recognition could be applied to non-mass risk but shied away from doing it themselves. Of course, they know that even businesses cannot always read the fine print in their insurance contracts. Indeed, the Court has stepped back from the recognition abyss even in the beverage and foods department, as with cheese additives (Nisin) banned by the Dutch.9 No matter that most Europeans, indeed most human beings, while they delight in very different tastes, find the same poisons poisonous. Even then, different publics, consumers and societies might accept different levels of risk. And when the Court did strike with a duty of recognition – it did often enough to ensure the free movement of beer, butter, oil and pasta – not everyone was happy.10 ‘Ah, I cannot recognize as pasta anything which comes so gluey out of the pot,’ a well-loved Italian ECJ judge confided in me the other day. Ultimate recognition lies in the eye of the beholder – or in this case, in his stomach. After all, the ECJ is involved in a continual reshaping of the legal-constitutional landscape to keep the law abreast with social change. Since 1986, the media coverage of the EC and the single market has increased by orders of magnitude, along with the mentions of Cassis in the popular press, but no one seems to have noticed these discrepancies. Why? How did we get here? A first part of the answer lies with the strategic triangular relation between the Commission, the ECJ and the national court that was taking shape in the 1970s.11 Indeed, as the story goes, the 1974 oil crisis led states to resort to various kinds of hidden or regulatory protectionism, and Germany, in particular, had been very resistant to the bypass of its national laws in the name of free trade.12 Thus it was becoming increasingly clear that attempts at Euro-wide harmonization of product and services standards were a losing battle. As a result, the idea of mutual recognition instead of market regulation through Community law was becoming increasingly attractive. By 1978–79, the Commission was fishing around for a case like Cassis, and when it found it, it worked closely

8 9 11 12

Judgment of the Court of 4 December 1986, Commission v Germany, Case 205/84. 10 ECJ Case 53/80, ECR 409. See inter alia the “Beer purity law” case, Case 178/84. See John Temple Lang’s chapter in this volume. See, inter alia, Bill Davies, Resisting the European Court of Justice. West Germany’s Confrontation with European Law, 1949–1979, Cambridge University Press, 2012.

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with the plaintiffs to bring this case forward, with some confidence that the ECJ would oblige when faced with such an egregious German protection.13 No wonder, then, that as soon as the Court issued its verdict, the Commission was ready in turn to issue a communication on its implications beyond alcoholic products, suggesting a detailed game plan that would generalize the judgment to most regulated goods, including through an information and consultation procedure between national regulators and legislators.14 From our 1989 venture point, in the space of ten years, this crucial 1979 Commission communication seems to have been all but forgotten. As a providential single market genius, Lord Cockfield has “(re)discovered” the Cassis judgment. We can legitimately infer that the initial conspiracy worked including as a conspiracy of silence – myths cannot afford to lose their innocence. To be sure, the Court had been engaged since the 1960s in an incremental “constitutionalisation of the treaties” which gave Cassis its full import.15 It is because of direct effect of the Treaties that the Court was able to force the import of the French liquor on German soil without the need to wait for legislation. And the Commission’s legal services had been working hand in hand with the Court to give effect to the principle on the ground. But it is also true that the 1979 communication would not have led to the single-market program without two crucial intervening factors, namely growing lobbying for the “Cassis approach” on the part of the businesses and importers and the push towards market liberalization by the likes of the British government led by Margaret Thatcher. The Court’s cautious jurisprudence, even after Cassis, is not surprising: the Court is in the business of putting forward principles, testing how acceptable they might be politically and passing the buck to the political process when it comes to generalizing them. Its power lies with its blueprints, not with binding pronouncement and judicial fiat. The question then is not why the Court has shied away from extending ‘recognition of equivalence’ to a wide array of cases beyond Cassis, but how were Cockfield and his friends able to use Cassis in

13

14

15

See Kalypso Nicolaidis, “The Emergence of Managed Mutual Recognition: Legal Precedent and Political Innovation in the European Community”, Paper presented at European Community Studies Association, May 1993. Communication from the European Commission concerning the consequences of the judgment given by the Court of Justice on 20 February 1979 in case 120/78 (‘Cassis de Dijon’), OJ 1980 C256/2. For a discussion, see Karen Alter and Sophie Meunier-Aitsahalia (1994), “Judicial Politics in the European Community: European Integration and the Path-Breaking Cassis de Dijon Decision”, Comparative Political Studies, Vol. 26, No. 4, 535–61; see also Kalypso Nicolaidis, 1993, op cit. See Bill Davies and Anne Boerger’s chapter in this volume.

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spite of the subsequent record, as if this was a matter of choosing a new bottle and not of exploring the shades of red. The reason is simple. Like all enterprises calling for individual sacrifice in the name of a collective, the new single-market program required its galvanizing founding myth. Cassis happily obliged. The court provided single-market warriors with a single formula, a motto easy to understand: “all ... products lawfully produced and marketed ... must be recognized as equivalent”. Freedom has always been a good rallying cry, no matter the full story about “mandatory requirements”, “public interest” and “the rule of reason”. Founding myths are about agreeing on what to forget. In short, taken together, the Commission’s 1979 communication and 1986 White Paper simply took the ECJ Cassis decision to its ultimate logic in both scope and depth: 1. Scope: Generalizing it in three directions: from alcoholic products to all products, from underlying standards to the authorities entitled to authorize or stamp them and crucially, from goods to services. 2. Depth: Turning this judicial principle of “recognition of equivalence” into a legislative-political principle of “mutual recognition”. When turned into a political principle, Cassis obviously continues to imply an assessment of equivalence between home and host countries’ rules, but the word “equivalence”, and thus the strictly legal constraint, is removed. Recognition becomes a political judgement, which does not necessarily need to be made on a careful case-by-case basis, but can be predicated on a host of other factors like trust, solidarity, proximity, political mood, linkage politics, paternalism, etc. Brilliant! Why did Member States buy this? Apparently a majority of them did not even like the Cassis judgment in the first place, let alone this dual extension as engineered by the Commission. Whether designed in advance or improvised step by step, strategy there is. More visibly and strategically than Dassonville, Cassis introduces (or “uncovered”, depending on your legal school of thought) constitutional limits to state intervention beyond the bounds of “intended discrimination”. Europe 1992 then sets these limits into legislative stone through majority voting! Political scientists have it all wrong when they say that mutual recognition was one of several options available out there, and that with Cassis the Court provided a new focal point for legislators. In fact, there are no other options. The hype seems warranted, as Cassis has truly proved to spell the start of a revolution in European affairs. Thanks to the supranational conspiracy uniting the Court, the Commission, and big business, it has

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set off a revolution in decision-makers’ thinking about market integration that simply cannot be stopped. And of course, if we move from static to a dynamic analysis, the picture is even starker. How will national regulators, their political master and their market clients react to this new state of affairs? Will such competition between rules rather than products only significantly affect the ways rules are designed in the first place? How will regulators and legislators reconcile the contradictory pulls between competitiveness or cost effects of high standards (which could lead to a race to the bottom) and their reputational effects (which could lead to a race to the top)? My prediction today in 1989, for what it is worth, is that such radical horizontal transfer of sovereignty between states is highly conflictual and will not happen without serious resistance.16

cassis fever (1990s): the era of managed mutual recognition We are in 1999. In the last ten years, old questions have been clarified while new ones have arisen. Clearly, the progress made towards a single market in services through the White Paper directives owes a lot to the adoption of mutual recognition as a guiding core principle. And there has been no blatant “race to the bottom”, and even in some cases a “race to the top”. It has become clear, in other words, that mutual recognition does not necessarily mean deregulation. But resistance there has been! Indeed, when I asked in 1989 why did the Member States buy it, I identified the wrong “it”. What Member States have imported from the Court’s Cassis jurisprudence has had little to do with the mere extension of the Cassis formula (“all products . . . must be recognized as equivalent”) to other products and services, an outcome which we can call “pure recognition” (considering the labelling requirement as de facto not a costly adaptation). Instead, Member States see the costs of pure recognition as simply too high. They have therefore taken in the entire Cassis judgment as well as the rest of the “rule of reason” jurisprudence with all its caveats and “yes, buts” and translated it in law. This process of translation is fascinating. Instead of “pure” recognition, they have adopted a highly politicized version of recognition involving complex sets of rules and procedures that may serve precisely to reduce, if not eliminate, the open-endedness of mutual recognition. This I have called managed mutual recognition. 16

See Kalypso Nicolaidis, Mutual Recognition Among Nations: Trade in Services in the European Union. PhD thesis, Harvard University, 1993.

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I came to the concept of managed mutual recognition from analyzing not only single-market directives in services but also the attempts by the EU to export Cassis beyond its borders. As an outcome, managed mutual recognition can be contrasted with “pure” mutual recognition in the same sense as managed trade can be contrasted with absolute free trade. Pure mutual recognition implies the granting of fully unconditional and openended rights of access (or of action) to private market agents in their dealings with the consumer protected in the host state. This would be considered the result of a free trade contract between states. In contrast, managed mutual recognition introduces conditionality in the contract. Accordingly, the four main dimensions along which mutual recognition can be managed or finetuned are: 1. Prior conditions for equivalence, from de facto convergence, to minimal harmonization to inter-institutional agreements. 2. Varying degrees of automaticity of access (for example, residual host country requirements for lawyers such as entry exams or training period in the host state). 3. Scope of activities or features covered by recognition (say, company risk but not mass risks in insurance). 4. Ex post guarantees or safeguards, including mutual monitoring and ultimately provisions for reversibility. In short, with managed mutual recognition, the burden of co-operation is shifted in time from ex ante to ex post costs, so that liberalization can appear to occur immediately, while it will need to be managed to be sustainable. I have come to believe that a better understanding of these trade-offs and their dynamic adaptation over time is key to reaching agreements on mutual recognition in the first place. Clearly then, “managed” mutual recognition belongs to the political, not the judicial, sphere. Nevertheless, it bears the deep marks of the Court’s footprints. Even when deciding not to strike down a given state regulation as an obstacle to free movement, the Court shapes the alternatives. What are the building blocks of this translation exercise? 1. Prior conditions: First, it is the Court which traces the frontier, or what I call the “equivalence threshold”, beyond which it cannot decree recognition by judicial fiat and beyond which political decisions will be necessary in order to ensure free movement on the basis of a home country rule. The Court also makes clear that such political action might not necessarily be harmonization or centralized regulation.

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2. Automaticity of access: When it finds in favor of recognition, the Court does not necessarily decree unconditional access. Instead it often limits automaticity through its favorite condition; adequate labelling. The commonsensical principle of proportionality leads the judge to strike down the application of some blunt host state standard only to turn around and suggest another “more proportional one”. The legislator in turn has a wider palette at its disposal to limit automaticity and has the luxury to lay out what such “residual host country controls” (or residual national treatment) may look like. 3. Scope of application: The ECJ judges my find that they need to draw the line. For some product or service they can play the game of proportionality and for some they cannot: host country control will have to stay until the legislator intervenes. Such careful delineation of scope can inspire the legislator either through sequencing (we apply mutual recognition first to where the ECJ said it was more warranted) or through outright separating where recognition will apply and where it will not. 4. Ex post safeguards: Even after mutual recognition is imposed through a court judgment, the court can always revisit similar cases and find that home country regulation is no longer satisfactory (“equivalent”) to assuage the concerns of the host country. On this count, the legislator does not have to leave it to chance. Built-in mutual monitoring, or mutual spying, is the name of the game. While it is important to analyze the role of the rulings of the ECJ in the European story of mutual recognition, and how the conversation between the ECJ and domestic Courts played out through preliminary references, it is also true that all the Court could do when it came to designing this more sophisticated understanding of the principle was to provide a road map for politicians and technical experts later crafting legislation. Only by migrating from the judicial to the legislative arena is it possible to spell out the full panoply of instruments for the management of recognition. The Court had not imposed judicial recognition, but pointed to the possibility of using this distinction to reduce the initial scope of recognition and introduce it in a progressive manner. If and when the political arena generates a demand for effective liberalization, the Commission takes the politicians at their word, in fact “upping the ante” by proposing a radical generalization of the Court’s approach to complete the single market, which is after all what the political masters are asking for. When generalized through the legislative process, most of the ECJ jurisprudence post-Cassis translates as managed recognition, not

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pure recognition, whereby recognition is not an alternative to national treatment and harmonization but an overarching principle, which retains residual host country control (e.g. national treatment) and residual harmonization. This political backdrop of the 1990s in turn sheds light on the subsequent Court jurisprudence governing Article 34 TFEU on Measures equivalent to quantitative restrictions (MEQRs). The debate has continued over whether the Court should apply a lenient non-discrimination test or a more constraining balancing test to national measures. Even when apparently restricting decisions to an anti-discrimination test, the Court always weighs costs against benefits and balances between the desirability of centralization versus decentralization, deregulation versus sustained regulation.17 Such balancing tests might lean towards a decentralized approach (as opposed to harmonization) and yet determine that national treatment (or a pure anti-discrimination test) does not suffice to ensure free trade; the judges might point to the need for sustained regulation in a given sector but assess a home country approach to be sufficient, if the necessary safeguards are taken. In both cases, the Court may call for mutual recognition through legislation while stopping short of its judicial imposition. In other words, since negotiators have taken these matters in hand, the ECJ does not set out the limits of mutual recognition, but rather the limits of its own role in bringing it about. Keck and Mithouard, a 1993 judgment duly considered as Cassis’ heir in the vast jurisprudence on MEQRs, is illustrative of such a deferential approach.18 Fourteen years after Cassis and the same year as the alleged “completion” of the single market, the Court felt it necessary to remind everyone that traders were not to abuse Cassis and invoke article 34 of the TFEU on the drop of a hat in order to challenge any national rule whose effect was to limit their commercial freedom. In Keck, the defendant wanted to be exempt from a French law prohibiting resale at a loss, or the resale of unaltered products at prices lower than the actual purchase price. Intent on “clarifying” its position, 17

18

See Maduro, 1998 We the Court, Donald H. Regan, ‘The Supreme Court and State Protectionism: Making Sense of the Dormant Commerce Clause’, 84 Michigan Law Review 1091 (1986); This reasoning is often compared to the US dormant commerce clause but while this one is mainly concerned with protectionism in the proportionality balancing the ECJ managed to insert a multiplicity of other interests and of course mandatory interests. For a fascinating comparative overview See Egan, Michelle. Single Markets: Economic Integration in Europe and the United States. Oxford University Press, 2014. 24 November 1993 judgment in B Keck and D Mithouard, cases C/267 and 268/191. See inter alia Mattias Derlen and Johan Lindholm, Article 28 E.C; and Rules on Use: A Step Towards a Workable Doctrine on Measures Having Equivalent Effect to Quantitative Restrictions, 16 Colum. J. Eur. L. 191, 196. (2010); Felicitas Parapatits, The Influence of the (post) Keck Case Law on the Freedom to Provide Services, p. 15 (Stiftung).

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the Court stated that (non-discriminatory) measures creating an equal burden for nationals from the country in question would not be caught by the wide net of liberalisation through recognition of equivalence – clearly no resale-atloss rules in the home country were not the same as the existence of such rules in the host country! Even if Keck only concerned the marketing of product – the “selling arrangement” exception – the case was critical in narrowing Cassis to “product requirements” and rebalancing it away from the most extreme implications of Dassonville.19 Throughout the 1990s, managed mutual recognition has become the name of the game in the field of services, whether through residual host country control (professions), reduced scope (finance) or ex post monitoring (media). In the field of goods, it has led not only to the new approach and agreement on minimal standards as prior condition but also to the global approach whereby certification bodies throughout Europe can sustain recognition without undue fear of lowered standards thanks to an extensive process of mutual monitoring – mutual spying, as I like to say. In spite of these collaborative networks between certifiers, recognition has been far from automatic in many instances. This is a forciori true when mutual recognition has been exported beyond the EU through mutual recognition agreements (MRAs) signed with countries like Australia, Canada, Japan, New Zealand, Israel, the United States or Switzerland. Even though in this external realm recognition is restricted to certification (through the certification of Conformity Assessment Bodies), rather than recognition of the underlying standards, it has been highly “managed”. It should come as no surprise that the negotiations over the EU-US MRAs, signed in 1999, were particularly tough, for instance stopping short of denying the Federal Drugs Administration its right of residual control over pharmaceuticals even if only at the last stages of the approval process.20 And transatlantic MRAs have simply floundered when it comes to services. At the global (WTO) level, under TBT (technical barriers to trade) and GATS (the services agreement), recognition is optional and conditional, not subject to MFN, and has been cumbersome to apply. Non-discriminatory mutual recognition could appear as an oxymoron to the non-legally trained eye.21 Perhaps in

19

20

21

See Daniela Caruso, “Lochner in Europe: A Comment on Keith Whittington’s ‘Congress Before the Lochner Court’,” 85 Boston University Law Review 867 (2005). See Egan and Nicolaidis, “Regional Policy Externality and Market Governance: Why Recognize Foreign Standards?” in Journal of European Public Policy, August 2001. See Nicolaidis, “Non-Discriminatory Mutual Recognition: An Oxymoron in the New WTO Lexicon?” in Petros Mavroidis and Patrick Blatter, eds, Non Discrimination in the WTO: Past and Present, Journal of World Trade, University of Michigan Press, The World Trade Forum series, 2000.

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order to counter the natural inertia of regulators and their resistance to any trade-induced assault on their autonomy, the OECD trade directorate – which has appointed me as their “mutual recognition expert” – has launched a multi-year program on the promotion of trade-friendly regulatory reform around the world. It is fascinating to see attempts at the liberalization of professional services meet resistance to horizontal approaches, precisely because each believes their particularities require a specific approach to managing recognition, from fiddling with acceptable titles to the need for additional training, adaptation periods and the like. Yet, what is a “tradefriendly” regulatory reform if not one where modes and avenues for recognizing foreign standards and actors are embedded in the very process of drafting law?

cassis on trial (2000s): polish plumbers, italian motorists and swedish jet skiers We are in 2009. This time around Cassis has truly been invoked in vain. If the recourse to mutual recognition has long been wrongly considered by scholars of law and politics as a ‘path of least resistance’, , we can no longer doubt its highly contentious character. Twenty years after Lord Cockfield, another liberal Commissioner, Fritz Bolkestein considered the export of mutual recognition to the realm of all services trade worthy of a personal crusade. But contrast to 20 years ago, mutual recognition has not been hailed as the magic bullet but has been put on trial along with Polish plumbers and Polish butchers seeking temporary work in France and Germany, or Baltic workers in Scandinavian countries. To the extent that they are ‘posted workers’ they do need to comply with host state laws (under the posted workers directive of 1996) but it is not clear what happens if they fall outside this kind of status as with the infamous Laval case enforcing the application of home rules which has given mutual recognition a very bad name with workers.22 The public hysteria and PR disaster spurred by the Commission’s “Frankenstein” directive can be attributed to many factors, including the propensity of some trade unions to play up their members’ fears of globalization and unfair competition in order to resist the perfidious “neo-liberal” recognition principle. Moreover, the radical enlargement of the EU may well have 22

In the Laval judgment, the ECJ states that a Latvian company, Laval, which posted workers to Sweden, is not required to adhere to the collective agreement within the Swedish construction industry.

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lowered the ‘mutual recognition tolerance threshold’ while at the same time increasing the social, economic and regulatory diversity of the Union. The problem of course is that many workers from these new Member States are eager to take advantage of the EU’s free movement rules work under home country state of mind and work habits as well as home rules, leading to face to face social dumping whereby workers operating under different constraints nevertheless interact within the same work environment.23 But given these factors, the Commission made a crucial mistake: to depart from its experience with managed mutual recognition discussed above and to press for a radical form of recognition across the board. It should have been clear by now to Brussels law drafters that a blanket application of home country jurisdiction is not faithful to the Cassis spirit. Under the Court’s jurisprudence, recognition was a conditional process and did not have the either-or character of the country-of-origin principle. In fact, the final draft that emerged from the European Parliament’s negotiations amounts to endorsing the Court’s jurisprudence, prescribing the usual proportionality and necessity tests for host country rules—a glass half full for advocates of a cautious and progressive approach to liberalization, but half empty for those who believed that, 50 years after the Treaty of Rome, political actors could afford to take a bolder step than judges. To a highly disgruntled EU legal community, the simple elimination of the principle of “mutual recognition” by the European Parliament appeared as a public pillorying of Cassis. And yet, and at least, by issuing a clear political endorsement of the Court’s Cassis jurisprudence, the services directive succeeded in bringing EU services consumers closer than ever to the Kir fans of yesteryear. While the ball was in the political court this decade, the ECJ Court continued to scrutinize both services regulations and MEQRs throughout the 2000s. On the services side, it has made clear that the very existence of national restrictions were not in question, only their added value in regulatory terms and the extent to which they create “additional administrative and economic burdens.”24 So for instance, a requirement for social security documents from the home state to be translated into the host state language amounts to a wrongful denial of recognition but not the translation of a promotional text into the languages spoken where the service is sold.

23

24

Kalypso Nicolaidis and Suzanne Schmidt (2007) “Mutual recognition ‘on trial’: the long road to services liberalization”, w/ Susanne Schmidt Journal of European Public Policy, 14:5, 717–34, August. Paid leave fund (C-490/04) [2007] E.C.R. I-6095 at [68].

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On the products side, perhaps most prominently in this decade, the Court dealt with differences in national “rules on use” of certain products which in effect may amount to non recognition of home rules if these rules are left to the host country’s discretion.25 In Commission v. Portugal, a company was allowed to market tinted window film in Portugal but national rules barred consumers from affixing it to the windscreens alongside the passenger seats in motor vehicles, a restriction justified by the aim of combating crime and ensuring road safety. The Court followed the Commission in its view that Portugal had not produced any evidence to show that the measure was either necessary or proportionate to the objectives pursued. And to be fair, Portugal was in the process of relaxing the rule anyway. In contrast, in Italy vs Commission, an Italian highway code came under attack that made it unlawful for motorcycles to tow trailers, essentially prohibiting the use of such types of trailers. This time, the Court came back to Keck and first asked the Member States to give their opinion on whether the same idea (e.g. that host country rules on selling arrangements were in principle outside the scope of the prohibition of MEQRs) should be extended to rules on the actual use of products. Many countries opined: a bit of a ring fencing off regulatory sovereignty was not a bad thing in these difficult political times. The ECJ disagreed. In this particular case, it held that the restriction on the use of motorcycle trailers did fall under the broad net of Article 34 TFEU because consumers, knowing that they are not permitted to use their motorcycle with a trailer specially designed for it, would have no interest in buying such a trailer (just like tinted film in Portugal). But this time around (unlike Portugal), the restriction was justified on the grounds of road safety. A bemused commentator quipped that it might be more effective for safety’s sake to inform motorists in Rome that those pretty red, yellow and green lights are not just decorative but seek to convey some driving instruction! Finally in Mickelsson, Sweden’s rule laying down that jet-skis could only be used on “general navigable waterways” came under scrutiny, since the latter are relatively few and very busy with commercial traffic, thus basically outlawing the actual use of jet-skis. As with the Italian case, the ECJ refused to go against the Swedish coast guard service which had charged the plaintiffs for violating the Swedish Jet Ski regulations, finding the ban could be justified in the light of the aim of protecting the environment. Moreover, it was for the national court to make this determination, a classic deferential move by the ECJ. 25

Case C-265/06 Commission v. Portugal, 2008 E.C.R. I-2245; Case C-110/05, Moped Trailers Commission v. Italy 2 C.M.L.R. 34 (2009). Case C-142/05, Aklagaren v. Mickelsson, 2009 WL 1543966, P 14 (June 4, 2009)).

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So here again – as with the rest of the decade’s decisions – we are back to Cassis’ two-pronged approach: a broad net catches most national measures as liable for Court scrutiny, but a broad allowances are carved out to allow them. In all three cases, the Commission was not asked to prove exactly why and how it was that, as a result of the host state rules, products from other Member States end up with a disadvantage, only that national measures were liable to have this effect. And while the burden of proof is born by the host state which must give an objective justification, it does not seem overly onerous. The Court tends to oblige. Nevertheless, legal scholars do not seem satisfied by the consistency of the Court’s jurisprudence, noting that “in the overwhelming majority of free movement judgments, the Court is working on a legal instinct, on a pragmatic sense of logic, maybe even on something as amorphous as a gut-feeling.”26 In other words, “we are approaching the unhappy position where, just as in the pre-Keck era, national courts are understandably baffled as to exactly what is expected of them when faced by speculative claims that national measures infringe Art [34].”27 And yet, to the (admittedly superficial) political scientist, there seems to be a method to this madness. First, as the Court never tires of explaining, the Treaty aims at an internal market across states in which conditions are similar to those of a single market where operators can move freely, not at a market without any rules at all.28 Second, this implies that “mutual recognition” is always conditional on some protection afforded by the home state’s regulations that can be recognized in the first place. If there is nothing to be recognized in the first place, there is no point in the aim of “avoiding a dual burden”. The regulatory “discount” granted to the exporter can be full or partial depending on the extent to which the aims of the host Member State’s legislation and controls have already been achieved by those applied in the home state. Proportionality assessment is applied to the host states’ measures. Third, in the absence of such home regulation, the requirements of the host State apply without such a “discount”, and we are back to national treatment. With each step, the devil is in the detail, and in particular who bears the burden of proof between the host state justifying its measure or the exporter justifying its complaint. Makes sense.

26 27 28

N. Nic Shuibhne, ann. to C-76/05 in (2008) 45 C.M.L. Rev. 771, 783. S. Weatherill, “Free movement of goods” (2009) 58 I.C.L.Q. 985, 986 Caixa-Bank France v Ministre de l’Economie, des Finances et de l’Industrie (C-442/02) [2004] E.C.R. I-8961; [2005] 1 C.M.L.R. 2, Opinion at [63].

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cassis stress tests (2010s): trust, criminals and refugees We are in 2015. In the summer, European publics were suddenly invited to the very visible and tragic human side of the recognition saga. Refugees from Syria and elsewhere were risking their lives in despair to knock at Europe’s door, but no one seemed to know if this door was the only point of entry or the first of many. If Greek officials grant a refugee stamp to someone in Lesbos or Athens, will this stamp become a “single refugee passport”, recognized everywhere in Europe? What happens to the principle of recognition when dealing with individuals moving around Europe for a purpose other than selling or buying goods and services? Liberal-minded readers might not approve of lumping refugees with alleged criminals, since the point of international laws is precisely that refugees are not criminals! Yet for the purpose of this story, criminals and refugees belong to the same overarching category of non-single-market expressions of Cassis – from criminal justice to asylum law. Both categories raise the same question in terms of “equivalence”: Is your human rights protection as good as mine? And if not, should I care? European police and judicial bodies have long asked their political masters to help them to better deal with the bad guys. Indeed, the principle of ne bis in idem, otherwise known as double jeopardy, contained in the Convention implementing the Schengen Agreement in 1985 and which implies that a person ought not to be prosecuted more than once for the same act, opened the way for mutual recognition in criminal affairs. But it was not until October 1999 that the European Council decided at its Tempere Summit that “the principle of mutual recognition should become the cornerstone of judicial cooperation in both civil and criminal matters within the EU”. Twenty years after Cassis, what was proclaimed a “new” strategy was in reality a complex exercise in translation from the single market to the justice realm.29 As a result, Schengen obligations have been interpreted as a duty of mutual recognition by the ECJ since 2001, whereby criminal authorities have been required to recognize each other’s criminal decisions and in effect each other’s criminal law provisions and prosecutorial policy.30 But it was the state of emergency that followed 9/11 that dramatically imposed recognition upon the transnational extradition regime. Within a few weeks of the Twin Towers’ collapse, EU leaders passed a framework decision on the European Arrest 29 30

For a thorough appraisal, see Janssens, op.cit. Gozuntok and Brugge cases. See Janssens, op.cit., pp. 134–66.

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Warrant (EAW) whereby if a “home country” requests the arrest of someone who happens to be caught in another member state (a kind of involuntary “host country”), the warrant has to be recognized by the host (with caveats, of course). Indeed, an EAW issued in one Member State is valid in all of them. And the warrant needs to be respected by the whole chain of criminal decision – from the police to national courts – involved in criminal matters (including financial matters and money laundering, which were dealt with separately). Unsurprisingly for Cassis-aficionados, the criminal justice world has had to face the same kind of challenges than custom officers in the good old days of Cassis-bans. What happens when the (“host”) state receiving the request is not truly confident in the requester’s criminal procedures? What if that state is asked to pursue or prosecute a criminal for a crime that does not even exist in its own laws? The core problem here is that the EAW was not adopted following a long period of mutual familiarization, convergence of national systems and ultimately trust building between national criminal justice agents. Instead, in the frenzy following 9/11, the rules of recognition pertaining to arrest warrants assumed trust rather then built it over time as had been the case for the single market. What does the EU do in this case? Well, we do know what it has done with goods and services when having to accelerate the completion of the single market in spite of national regulators not being quite “ready”. In the absence of prior convergence, EU lawmakers fine-tuned variants of managed mutual recognition, allowing for safeguards to make up for the wide judicial discrepancies at hand. First, the scope of the EAW has been circumscribed. The EAW allows the issuance of an arrest warrant on the basis of one of thirty-two outlined crimes leading to a dual EU criminal system: one for the bad guys where mutual recognition applies, and one for the even worse guys (e.g. murderers and rapists) where it does not. In addition, we have EU-level cooperation for major crimes affecting all Member States (such as terrorism, drug trafficking, human trafficking and organized crime). Importantly, the host is not obliged to recognize the warrant automatically. Its authorities can assess whether the country requesting extradition truly applies the “same acts” and, if not, invoke mandatory grounds for non-execution. Member States have used this right often; whether they have abused it is, of course, a matter for Court judgment. In light of the inevitable disputes that have ensued, the ECJ has initially been reluctant to give in to the “host state” that refuses to implement mutual recognition. Take, for instance, the Mantello case concerning the German authorities’ refusal to surrender Gaetano Mantello to the Italian judicial

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authorities who issued the arrest warrant.31 Yes, the Germans argued, he was a member of an organized cross-border narcotic-trafficking ring between Italy and Germany, but he could not be sent back on the principle of ne bis in Idem. The ECJ did not agree, stating that it is the Member State in which the judgment is delivered that determines whether or not a person has been finally judged.32 Nevertheless, five years later, the German Constitutional Court forcefully reiterated its right to protect Germany’s constitutional identity guaranteed by the Basic Law, asserting that the principle of individual guilt was simply “not open to European integration”.33 It forcefully refused to comply with an Italian request to extradite an American sentenced in absentia twenty-two years earlier who under Italian law would not be able to provide new evidence in the appeals proceedings. The Court reasserted that “the principle of mutual trust does not apply without limits even according to Union law”, and that “this trust is shaken if there are factual indications that the requirements that are absolutely essential for the protection of human dignity will not be met if the requested person is extradited.” Negotiated extraterritoriality comes with its own challenges.34 Even while functional pressures call for transferring sovereignty away from host states in both realms of the single market and justice, their reluctance to do so may be heightened when protecting human rights rather than consumer rights and when the recognition in question involves the full foregoing of jurisdiction over the freedom of citizens. If a Polish engineer wants to get into Britain (host), Britain must recognize her home rule in order to let her in; if a British citizen has committed a crime in Poland, recognizing “home” rule (the home of the crime) means kicking him out of Britain, although he has not yet be proven guilty. Mutual recognition is liberal in the market realm, illiberal in the justice realm.35 To be sure, the ECJ restated in its Mantello judgment that the national courts are bound by the guarantees of European law and fundamental rights standards when exercising judicial control relating to the EAW.36 But whose standards are we talking about? Should the principle of mutual recognition mean extraterritoriality without a safety net?

31 32

33 34

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Mantello ECLI:EU:C:2010:683. See the Mantello case, for instance. Judge Sinisa Rodin, Useful Effect of the Framework Decision on the European Arrest Warrant, p. 12. 2 BvR 2735/14. Judgment December 2015. For a discussion, see contributions in JEPP special issue on democratization, Journal of European Public Policy 22.1 (2015). Sandra. Lavenex, “Mutual recognition and the monopoly of force: limits of the single market analogy”, Journal of European Public Policy 14.5 (2007): 762–79. Id., p. 13.

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The EAW raises the fundamental question yet again: When are the costs of managing diversity through horizontal transfers of sovereignty and mutual recognition too high? The political answer seems obvious: when gains in integration are too small compared to their costs (in this case, the comfort level of European publics on the human rights front). This in turn rests on a second part of the answer: when socio-political-regulatory differences are too high – in other words, when there is no true equivalence. When the Commission criticizes Member States for their “abuse” of safeguards, their public opinions may ask: What other recourse is there if a judge mistrusts the standards of another EU country for issuing an arrest warrant? We are on even more sensitive ground when it comes to refugees. It is one thing to trust other countries with their standards for healthy cheese, perhaps even for potential criminals, but should the same logic apply for the most vulnerable persons on European soil, namely asylum seekers? It is important to note that under the incomplete Common European Asylum System (CEAS) agreed as part of the 2009 Lisbon Treaty, Member States recognize only negative asylum decisions, not positive ones. The Orban government says no to 90 per cent of applications for asylum, and the rest of Europe must bow. If it says yes, the refugee will not be recognized as such elsewhere in Europe and thus has to stay in Hungary.37 The European Asylum regime goes back to 1990 Dublin Convention (revisited in 2003 and 2013), which dealt with determining the State in Europe responsible for processing asylum application but unfortunately did not consider mutual recognition as part of the system. The 2013 Dublin III Regulation in turn establishes a hierarchy of criteria of responsibility for processing asylum claims, leading to “Dublin returns” when refugees are sent back to their country of entry. As Cathryn Costello aptly concludes, “Member States use mutual recognition as a selective tool, to limit responsibility, rather than to share it.”38 Presumably this would make it more difficult to recognize a positive asylum decision in the future. For example, if a person is denied asylum in one Member State and returns to another, say, two years later and receives asylum, she would not be given asylum recognition in all the other Member States. In the wake of the Syrian refugee crisis, some Member States – Germany and the Czech Republic, specifically – decided to suspend application of the

37

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Council Directive 2001/40/EC of 28 May 2001 on the mutual recognition of decisions on the expulsion of third country nationals. Exceptions were carved out in the provisions amending the Long-Term Residents Directive (Directive 2011/51/EU). Cathryn Costello, Dublin-case NS/ME: Finally, an End to Blind Trust Across the EU?, 2 A&MR 83, 90 (2012).

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regulation in order to process asylum applications themselves. Conversely, Hungary and Poland announced their continued adherence to the Dublin regulation. Italy has called for a full amendment to the Dublin regulation by changing the competence to examine asylum applications from the Member States where the asylum seekers enter to the country where they would eventually like to end up. The Commission has called for a reevaluation of the Dublin system by mid-2016. In the meanwhile, the ECJ has had to pronounce on the current system, including regarding the exercise of what is colloquially known as the sovereignty clause, which allows states to derogate from the point of entry allocation of responsibility system. In the groundbreaking NS/ME case,39 the ECJ was asked whether (under this negative recognition premise) transfers of asylum seekers back to the original country of entrance can nevertheless be barred under the Dublin regulation if the standards for refugee protection in the state in question are not satisfactory. After all, under the Dublin Regulation, all Member States are meant to operate under the assumption that they share the same asylum scheme and enforce similar conditions in their respective processing centres. Nevertheless, in this case and other subsequent ones, the ECJ ruled that Member States and national courts cannot transfer asylum seekers where they “cannot be unaware that systemic deficiencies in the asylum procedure and in the reception conditions of asylum seekers in that Member State amount to substantial grounds for believing that the asylum seeker would face a real risk of being subjected to inhuman and degrading treatment within the meaning of Article 4 of the Charter”.40 While this ruling assumes that mutual recognition is the core basis of the CEAS, we are yet again in the realm of “managed” mutual recognition whereby it is right and proper for the Court not to require blind trust.41 Not only can a host Member State withhold the duty to recognize if the conditions found in the country of return exhibit “systemic deficiencies”, but there is even a “duty not to return” under such conditions. Here again blind trust cannot trump fundamental rights.42 The principle of mutual confidence must remain an aspiration not an assumption. In the absence of a single EU agency administering asylum decisions, something that Member States are not likely to agree to anytime soon, what is a “uniform status . . . valid throughout the Union” if not a system of positive mutual recognition? We are again faced with a fundamental tension between functional need for applying mutual recognition in emergency situations and 39

40

Joined Cases-411/10 NS v. Secretary of State for the Home Department and C-493/10 ME et al v. Refugee Application Commissioner & Minister for Justice, Equality and Law Reform. 41 42 Id. at para. 94. Costello, op.cit. ibid.

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the fear among Member States of relinquishing their sovereign prerogative to control the movement of people across borders.

cassis across the seas (2015): exporting mutual recognition Today. The negotiators involved in the Transatlantic Trade and Investment Partnership (TTIP) discussions, which have taken place since the 2013, seem to have forgotten the lessons of the late 1990s, when the EU and the United States tried to export mutual recognition to the transatlantic realm (see Cassis Fever, 1990s, earlier in the chapter). The lead-up to the MRAs agreed to in 1999 demonstrated how challenging mutual recognition could be between such different regulatory cultures and institutions.43 This time around, mutual recognition is not stated as the core norm of the system, but is implied under the broader umbrella of international regulatory cooperation. The Commission referred to mutual recognition for chemicals (to dismiss it), and in textile labelling (to embrace it). And it defends continued expansion of recognition of inspection in the case of, for example, medical devices, or oysters. It is true that mega regional trade agreements can take stock of the growth of international standard setting over the past couple of decades since the first-generation MRAs. And yet, Europeans do understand that, short of full harmonization, mutual recognition is the name of the game when we speak of “regulatory cooperation”. What else would a “regulatory cooperation body” be for, beyond exchanging information? When considering the trade-hindering effect of regulatory duplication, US negotiators say they want a “negative list” approach (measures not listed are fair game), but being less familiar with the workings of mutual recognition than their EU counterparts are, they seem to also try to impose their own regulatory approach in the process! Other government would do better, US negotiators argue, to adopt a US own style of over-arching regulatory oversight (such as notice-andcomment rulemaking) through the Office of Information and Regulatory Affairs (OIRA).44 There is a lot of talk about selecting best practices, experimental governance, mutual learning, global policy laboratory and the 43

44

See Egan and Nicolaidis, op.cit.; Fernanda Nicola, “The Politization of Legal Expertise in the TTIP Negotiations”; Nicolaidis and Shaffer, “Transnational Mutual Recognition Regimes: Governance without Global Government,” Michigan Review of International Law, Vol 68 (2005), pp. 267–322. See Nicola, op.cit.

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democratic accountability of these processes. But it would be foolish to rely on the convergence between, say, ex ante vs. ex post approaches to regulating markets between EU and US types of capitalism. What else can the parties do but negotiate the contours about “managed mutual recognition”? Isn’t it a sign of the times that, in February 2016, the parties did come to an agreement to apply mutual recognition to clearinghouses for financial derivatives, reckoned to be worth $553 trillion worldwide?

cassis in spirit: europe as a demoi-cratic politics What would EU law have been without Cassis? Indeed, what would the EU be without Cassis? In the late 1970s, at a time when the EC was ripe for a new approach that would deliver the completion of a market promised twenty years earlier, I believe there would have been another similar case, sooner or later. Perhaps the greatest irony today is that while questioned in the single-market area, the spirit of Cassis thrives elsewhere. For one, we are witnessing an extension of the principle of mutual recognition to the realm of justice and home affairs, in other words the acceptance by judges and police forces throughout Europe of each other’s procedures and judgments. To be sure, “wanted in one EU country, wanted everywhere in the EU” does not sound as liberal as its Cassis forbearer, and we do not yet have refugees “admitted here, admitted everywhere”. But the time will come. Meanwhile we must live with the “rejected here, rejected everywhere”. More generally, however, we are increasingly confronted with the democratic ramifications of mutual recognition. I have defined elsewhere the EU as a demoi-cracy in the making – a union of peoples who govern together but not as one.45 The demoi-cratic credentials of recognition depend on the institutional foundations of mutual trust bolstered by mutual monitoring and on the belief that national adjustment is often more sustainable through changed incentive structures rather than bargaining over set preferences. To generalize, the demoi-cratic quality of the EU’s various integration methods hinges not only on their domestic democratic anchoring but also on the capacity of individual demoi to compensate for cross-national asymmetries of power when they decide. In a Union where mutual recognition has been adopted as a core operating principle, we need to continue to ask how its reach and limits are designed and when should judge-made law give way to politics. 45

See Nicolaidis, “We, the Peoples of Europe...”, in Foreign Affairs, November/December 2004, pp. 97–110; Nicolaidis, “European Demoicracy and Its Crisis,” Journal of Common Market Studies March, Vol. 51, no. 2 (2013), pp. 351–69.

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16 The Duty of Sincere Cooperation as a Lawyering Strategy A Personal Account of Commission v. United Kingdom Case 804/79

john temple lang

introduction Case 804/79, Commission v. United Kingdom (sea fisheries)1, was the judgment that laid the foundation for the Common Fisheries Policy of the European Community. It was actually, however, the last in a series of judgments. To understand its significance, the developments and judgments leading up to this case must be explained substantially in the order in which they occurred. This series of judgments was the result of a planned and carefully considered strategy by the Director General of Fisheries in the Commission, Eamonn Gallagher.2 I represented the Commission in all these cases except Kramer3 and van Dam4 and he was a splendid client: highly intelligent, farsighted and objective. He understood from the beginning that with imagination and the right legal tactics the Commission could make it impossible for Member States to operate their own national fisheries policies without taking the interests of conservation, and the interests of other Member States, into account. The Common Fisheries Policy was one of the two or three European policies which were almost entirely designed by a single individual. This story of Case 804/79 begins with the Treaty of Accession of 1972 of the United Kingdom, Ireland and Denmark, which provided that the Council

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2

3 4

Case 804/79, Commission of the European Communities v. United Kingdom of Great Britain and Northern Ireland - Sea fisheries - Conservation measures [1981] E.C.R. 1045. Eamon Gallagher (1926–2009) began his career in the Irish Department of External Affairs, before joining the European Commission as Deputy Director General for External Relations with a special responsibility for fisheries policy in 1976. By 1977, he was appointed the first Director General for Fisheries. He later served as a special advisor to Jacques Delors and was the EU’s representative to the UN. Joined Cases 3, 4 and 6/76, Cornelis Kramer and Others [1976] E.C.R. 1279. Joined Cases 185 to 204/78, J. van Dam en Zonen and Others, [1979] E.C.R. 2345.

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should determine, from the sixth year after accession at the latest, conditions for fishing and fish conservation. The Court confirmed in Kramer and van Dam that during the transitional period and subject to seeking the approval of the Commission, Member States could adopt national fishery conservation measures. The national measures in Kramer were adopted to carry out obligations resulting from an international agreement. The Court confirmed that the Community had capacity to enter into international commitments over the whole field of the objectives listed in the Treaty.5 To establish whether the Community has authority to enter into international commitments in specific cases, regard must be held to the whole scheme of Community law.6 Authority may arise from express conferral, implicitly from other provisions of the Treaty, or from measures adopted by the Community institutions. The Community had already adopted fisheries measures in 1970 so the Community had, on the internal level, power to take fisheries measures. The rule making authority of the Community ratione materiae also extends to fishing on the high seas, insofar as the Member States have similar authority under public international law. Therefore, the Community had the power to enter into international commitments, and the powers of Member States would cease at the end of the transitional period. In the meantime, they were bound by the duty of sincere cooperation Article 5 (now Article 4(3) TEU) to proceed in international organisations of an economic character only by common action. They were also under a duty not to enter into any commitments which could hinder the Community in carrying out its tasks under the Act of Accession. In Van Dam, the Court confirmed that the period referred to in the Act of Accession ended on 31 December 1978, and that until then, Member States had power to adopt national conservation measures. In one of the Resolutions adopted by a Council meeting in The Hague in 1976, and referred to and confirmed several times subsequently, it had been agreed that Member States could adopt national fisheries measures in consultation with the Commission and seeking its approval, until January 1979.7 Eamonn Gallagher and I saw that as Member States adopted national fisheries measures, the Commission would be able to challenge them if they 5

6 7

McNaughton, A. and Furlong, P. ‘Services Trade Reform in the European Union - The EU Services Directive’ in Christopher Findlay (ed.), Priorities and Pathways in Services Reform Part II - Political Economy Studies (World Scientific 2014, Singapore) pp. 307–42. Ibid. Curiously, the Resolution was never officially published, but it is set out in the judgment in Case 61/77, Commission v. Ireland, [1978] E.C.R. 417, at para. 37.

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were discriminatory and protectionist, or if they were inconsistent with scientific advice or insufficient to implement it, in particular when the advice concerned fish stocks fished by fleets of more than one Member State. National measures could also be challenged if they had not been adequately discussed with the Commission. Since fishing cannot wait, we were sure that the Court would order interim measures suspending national legislation that seemed to be clearly illegal. These possibilities enabled the Commission to constrain national legislation, in particular, as the Member States adopted several measures which were inadequately considered and hard to defend legally. The Kramer and Van Dam cases originated in national courts. In separate legal proceedings in the European Court of Justice, the Commission challenged an Irish measure prohibiting fishing by fishing boats over a certain size in a large area of sea under Irish jurisdiction. Though defended as a conservation measure, the argument was rejected. The Court ruled that the measure was discriminatory, because in practice it only prevented fishing by non-Irish boats. Also, the Dutch fishermen involved argued that the measure did not produce conservation effects because smaller boats use purse seine nets, which are in effect wrapped around the shoals of fish and catch them all, while larger boats use other nets, which allow more of the fish to survive. (This is a good example of the value of arguments made by private parties: the Commission had not pointed this out.) The Court rejected the argument that the Community fisheries regulations applied only to the Member States’ maritime waters before they were extended to the 200-mile zone, since Community rules always apply in principle to the same geographical area as the Treaty itself. Ireland was free to adopt conservation measures, provided that they were consistent with Community law. The Court ordered Ireland, as an interim measure, to suspend the operation of the Irish Order, but only when it was clear that adequate conservation measures could be adopted, with the consent of the Commission.8 The interim measure strikingly proved how effective the Commission’s fisheries policy could be, and was a significant victory for the Commission. An amusing fact of this case is that the two principal Commission officials handling the case against Ireland were both Irish. In important and politically sensitive cases, the Commission was always represented by the senior Legal Service lawyer from the Member State concerned. One of the hearings before the Court was broadcast for Dutch television. Ireland was represented by Rory 8

Case 61/77, Commission of the European Communities v. Ireland [1977] E.C.R. 1411, [1978] E.C.R. 417 and Case 88/77, Minister for Fisheries v. Schonenberg [1978] E.C.R. 473

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O’Hanlon S.C., later a High Court Judge, and the Dutch fishermen by Nial Fennelly S.C., later Advocate General in Luxembourg and a Judge of the Irish Supreme Court. The Irish Attorney General, in a brief appearance, made a political speech that did little to advance his case. Judge Pierre Pescatore, a distinguished judge with a great interest in institutional questions, asked whether the Court’s interim measures order was directly effective, without more, to suspend the Irish legislation. The lawyers representing Ireland did not know, but my opinion was that the wording of the Court’s order suggested that the Irish government needed to suspend the legislation, and that this was necessary anyway to clarify the position. In Case 141/78, France v. United Kingdom, [1979] E.C.R. 2923, France challenged the lawfulness of a UK measure increasing the minimum mesh size for certain nets. (This is one of the few cases brought by one Member State against another). France argued that the UK measure had been adopted contrary to the Hague Resolution, essentially on the grounds that it had not been discussed with the Commission, and its consequences for non-UK fishermen had not been considered or minimised. The Commission agreed, arguing that the Resolution was a specific expression of the duty of cooperation expressed in general terms in Article 5. The Court accepted this. In general, Council Resolutions are not legally binding. However, the Commission argued that this Resolution, exceptionally, was legally binding as a result of the general duty of sincere cooperation stated by Article 5, which obliged Member States to take any appropriate measures, general or particular, to ensure fulfilment of the obligations arising from the Treaties or resulting from acts of the institutions. The Article obliges Member States to facilitate the achievement of the Community’s tasks, and it was the second big step forward for the Commission when the Court said that Article 5 made the Hague Resolution legally binding. The Resolution had been necessary because the Council had found it impossible to agree on all of the conservation measures that were needed. The Commission said that in these circumstances, and because the Resolution had been designed to avoid difficulties and controversy over fisheries conservation to reconcile potentially conflicting interests, and to promote an undoubted Community objective, the duty to consult the Commission, and to seek its approval in advance, should be considered legally binding, unlike normal resolutions. The Court accepted that the Resolution was legally binding (and not merely “soft law” like other Council Resolutions), and indeed that had not been seriously contested. The Court said that the Hague Resolution “in the specific field in which it applies, makes specific the duties of cooperation which the Member States assumed under Article 5 of the EEC Treaty when they acceded to the Community”. The

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Court went on to say that “performance of these duties is particularly necessary in a situation in which it has appeared impossible . . . to establish a common policy and in a field such as that of the conservation of the biological resources of the sea in which worthwhile results can only be attained thanks to the cooperation of all the Member States”. It was clear that the United Kingdom had not sought the approval of the Commission for the measure in question, so that the United Kingdom’s position was hard to defend. The next case was Commission v. United Kingdom.9 Again, it was argued that the United Kingdom had acted illegally because it had not complied with the Hague Resolution. The United Kingdom had failed to protect the Mourne herring fishery, a stock in danger of extinction, and had allowed coastal fishing by local fishermen, which was both discriminatory and contrary to conservation needs. There had also been no appropriate consultation on the Isle of Man fishery, and the Norway Pout “Box” (a no-fishing zone) had been extended without justification. In a detailed judgment, the Court found against the United Kingdom on all three measures – the powers of the Member States to adopt conservation measures were subject to their obligations under Article 5. The Mourne measure had been notified to the Commission only the day before it was to come into force. The other measures discriminated against non-UK fishermen. The United Kingdom had not produced scientific evidence showing the need to increase the protection for Norway Pout. This case was important because it showed that the Commission could use its right to be consulted in order to insist on implementation of scientific advice. Controversy arose over the Mourne herring fishery in the Irish Sea, which is essentially in UK waters. The scientific advice, which was accepted by the United Kingdom, was that to avoid the risk that the fish population or “stock” in question would become extinct, all fishing for herring in the area should be stopped at once. However, the United Kingdom was reluctant to close the fishery immediately. The Commission argued that, since the scientific advice was clear and uncontroversial, and since conservation of fishery stocks was undoubtedly a Community objective, the United Kingdom had a legal obligation, again under Article 5, to stop fishing at once. The Court accepted this argument. This was the first time the Court decided that Article 5 imposed a legal duty to protect a natural resource purely on scientific conservation grounds. If Council measures could not be adopted in good time, “the Member States not only have the right but are also under a duty to act in the interests of the Community”10.

9

Case 32/79, Commission v. United Kingdom, [1980] E.C.R. 2403.

10

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Ibid, para. 25.

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The next question was the extent of the legal obligations under the Hague Resolution. The Commission argued in Case 32/79 that it was not enough for Member States merely to inform the Commission of what they proposed to do, or even to discuss it with the Commission, but that it was necessary, if the Resolution was to be effective, for the State to get the agreement of the Commission for whatever measures it was adopting. Again, the Court accepted the Commission’s argument. As Eamonn Gallagher and I had hoped, by these judgments the Commission obtained the tools it needed to influence and regulate national fisheries measures, even when they were said to be for conservation purposes. In Case 804/79, the principal and last judgment discussed here, which involved a series of UK measures, the Court said that the Community law had undergone “a substantial change” as a result of the expiration of the transitional period under the Act of Accession of the United Kingdom, Denmark and Ireland. The power to adopt fisheries conservation measures belonged fully and definitively to the Community; Member States were no longer entitled to exercise any power of their own to adopt conservation measures. The resources to which the fishermen of the Member States all have an equal right of access must in the future be subject to Community law rules. The failure of the Council to act could not restore powers to the Member States, and any conservation measures had to be adopted in accordance with the Hague Resolution. Article 5 imposes special duties of action and abstention when the Commission, to meet urgent conservation needs, has made proposals representing the point of departure for Community action. This is now a field reserved to the Community, in which Member States may act only as trustees of the common interest, and so they may adopt conservation measures only in collaboration with the Commission. They were therefore obliged to undertake detailed consultations with the Commission and to seek its approval in good faith, and a duty not to adopt conservation measures in spite of objections or conditions of the Commission. Surprisingly, neither Ireland nor the United Kingdom had a proper record of the negotiations concerning the Isle of Man fishery. In this case Ireland was represented by Declan Budd S.C., who later became an Irish High Court judge. It was his first case in Luxembourg, and an unusually complicated one. The United Kingdom was represented by the Scottish Lord Advocate, Lord Mackay, who later became Lord Chancellor. We sought his consent to submit some evidence that had been discovered late, and although he could have objected, he agreed immediately and very courteously. We had not been sure that the Court would accept the argument that Member States no longer had any powers to adopt fisheries measures, except

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powers specifically delegated to them, or powers exercised as trustees for the general interest. We therefore made a number of detailed criticisms of the individual UK measures, telling the Court that these criticisms did not need to be considered if the Court accepted that Member States no longer had legislative powers. The consultation carried out by the United Kingdom had again been unsatisfactory, and not in accordance with the Council decisions. The Court also confirmed what it had decided in Case 32/79 that the system of licences applied by the United Kingdom in the Irish Sea and around the Isle of Man had not been subject to a consultation or authorization by the Commission. The detailed rules were wholly within the discretion of the United Kingdom, and it was not possible for the Commission, the other Member States or the fishermen to be certain how the system would be applied. The system therefore infringed upon one of the fundamental rules, requiring clarity of the legal position, because it prevented the fishermen of other Member States from having access to fishing zones on an equal footing with the fishermen of the United Kingdom. In Case 804/79, the Advocate General also considered a number of institutional issues. The Commission, of course, formally has no power to initiate national measures. If national measures are to be adopted in the interests of the Community, the Commission can play its role only if its approval is necessary. The Community interest can only be upheld if the measures enacted by the Member States as representatives of the Community are adopted with the approval of the Community, that is, in the circumstances, with the approval of the Commission, “as guardian of the Community’s interest”.11 It may be said, with hindsight, that the judgment in Case 804/79 was hardly surprising, because the Act of Accession had determined that the Council, from the sixth year after accession, should adopt conditions for fishing to ensure conservation of the biological resources of the sea. However, the United Kingdom argued that this merely imposed obligations on the Council, and did not say what the legal position would be if the Council was unable to act. (This argument was somewhat weakened because it was the United Kingdom’s unwillingness to agree to Community measures that caused the Council’s inability to act.) The Treaties then said nothing about exclusive Community competence in any area, and the exclusive competence for the common commercial policy was the result of judgments of the Court rather than an act of the Council. A reading of the Treaty would have given the impression that all the Community’s powers were concurrent. It was not very 11

See footnote 3, Commission of the European Communities v. United Kingdom of Great Britain and Northern Ireland - Sea fisheries - Conservation measures (p. 1091).

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clearly understood in 1981 that there were two kinds of exclusive Community competence: first, where the Community had adopted measures, Member States had no competence to alter them; and second, in certain areas Member States might have no competence to adopt any measures.12 This second situation could arise even if the Community had not exercised its powers, and there was no question therefore of national measures being inconsistent with Community measures, or interfering with the operation of Community measures. In relation to exclusive competence, the judgment in Case 804/79 created a much clearer situation than that for commercial policy, since the Community’s exclusive competence for new commercial policy measures had not swept away the many trade agreements and other arrangements to which Member States were parties.

conclusion The aforementioned cases are leading cases on the duty of Member States under Article 5 (now Article 4(3) TEU), to cooperate with the Community institutions and objectives, in circumstances in which only cooperation could resolve the difficulties. The Court, in particular in Case 804/79, was willing to envisage and approve a semi-formal arrangement reconciling Community competence with the impossibility of reaching agreement in Council and with the need to allow urgent conservation measures to be adopted. These cases are among the relatively few in which the Commission has relied strongly on the duty of cooperation under Article 5 and are interesting for that reason as well. If, as has been suggested, the duty of cooperation is “the most important General Principle of Community law”,13 these cases are among the clearest examples of its practical consequences. The Court several times said that Member States should act “in the interests of the Community” or “as trustees of the common interest”, where action is urgently needed. This is also an important concept, although it has not been much used. 12

13

Temple Lang, The ERTA Judgment and the Court’s Case-law on Competence and conflict, 6 Yearbook of European Law (1986) 183–218. Temple Lang, Article 10 EC – the most important “General Principle” of Community Law, in Bernitz, Nergelius and Cardner (eds.), General Principles of EC Law in a Process of Development (Wolters Kluwer, 2006), 75–113. See Temple Lang, The Development by the Court of Justice of the Duties of Cooperation of National Authorities and Community Institutions under Article 10 EC, 31 Fordham International Law Journal (2008), 1483–1532: General Report, the Duties of Cooperation of National Authorities and Courts and Community Institutions under Article 10 EC, XIX FIDE Congress Fédération International pour le Droit Européen (2000, Helsinki) vol. 1, 373–426 and vol. iv, 65–72.

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17 Centros, the Freedom of Establishment for Companies and the Court’s Accidental Vision for Corporate Law martin gelter

introduction Around the year 2000, three European Court of Justice (“ECJ”) cases shook the foundations of European corporate law: Centros (1999),1 Überseering (2002)2 and Inspire Art (2003).3 Applying the freedom of establishment to corporations, these cases heralded a new era, as in combination they permit free choice in incorporation, thus permitting an individual seeking to incorporate to choose the law of any country in the European Economic Area. In contrast to the United States, free choice of incorporation was previously not possible in Europe. Traditionally, conflicts of law rules regarding legal persons were divided between the incorporation theory and the real seat theory. Under the incorporation theory, which is analogous to the internal affairs doctrine in the United States, a corporation is governed by the law where it was incorporated.4 Under the real seat theory, a corporation is governed by the law of the country where its head office (the centre of its actual commercial and financial operations) is located. Consequently, if a firm is incorporated in state A, but is actually based in state B, B – as a real seat state – might deny the 1 2

3

4

Case C-212/97 [1999] E.C.R. I-1459. Überseering BV v. Nordic Construction Company Baumanagement GmbH, Case C-208/00 [2002] E.C.R. I-9919. Kamer van Koophandel en Fabrieken voor Amsterdam v. Inspire Art Ltd., Case C-167/01 [2003] E.C.R. I-10155. The real seat theory has traditionally been used in Austria, Belgium, France, Germany, Italy and Luxemburg. Various forms of the incorporation theory have been used in common law jurisdictions as well as the Netherlands, Switzerland, Liechtenstein and the Scandinavian countries. See, e.g. Kilian Baelz & Theresa Baldwin, The End of the Real Seat Theory (Sitztheorie): The European Court of Justice Decision in Ueberseering of 5 November 2002 and its Impact on German and European Company Law, German L. J., vol. 3, no. 12, }9 (2002); Paul J. Omar, Centros, Uberseering and Beyond: A European Recipe for Corporate Migration, Part 1, 15 Int’l. Company & Comm. L. Rev. 398, 398–400 (2004).

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firm’s legal capacity, since it was not incorporated following B’s laws. Alternatively, it might treat it as a partnership or a corporation governed by B law. If state B follows the incorporation theory, it might still find other reasons to refuse the recognition of the company (e.g. circumvention of B’s law), or it might decide to apply some of its own laws to the corporation. In the three cases, a Member State either refused to recognize a firm set up in another Member State or attempted to apply some of its laws to the firm. In each case, the ECJ found the host State to be in violation of the freedom of establishment. Consequently, the real seat theory can no longer be applied to companies from other Member States, and States cannot use special laws to protect their own corporate law policies from circumvention by foreign incorporation. Companies’ founders can, in principle, “pick and choose” the best legal form from all Member States. This result is one that policymakers, lawyers and legal scholars sought to avoid for many decades, given its potential to undermine national corporate law policies that used the real seat theory as a protectionist tool to stop pseudoforeign corporations at the border. This chapter attempts to tell a short, intellectual history of the debate, and how that history is linked to the freedom of establishment for corporations. In the early years of the European Economic Community (ECC), it was thought that company law would be harmonized to such a strong degree that the free movement of corporations would no longer raise any concern. When the harmonization program stalled, Member States felt justified in maintaining protectionist measures impeding free choice of corporate law. Many saw dicta in the Daily Mail case of 19885 as providing a justification for the real seat theory, whereas few observers paid attention to the Segers case of 1986,6 which seemed to be saying the opposite. The triad of Centros, Überseering and Inspire Art thus was a particularly disruptive surprise. The ECJ, which took a more cautious approach only in the Cartesio case of 2008, was seen as opening the door to regulatory competition in European corporate law, and in particular to English Private Limited Companies flooding the continent. In the end, there was little “offensive” regulatory competition, since no Member State had the incentive to capture a large part of the market for incorporation. Member States did, however, engage in “defensive” regulatory competition by eliminating requirements in their laws

5

6

The Queen v. Treasury and Commissioners of Inland Revenue, Ex Parte Daily Mail and General Trust PLC, Case C-81/87 [1988] E.C.R. I-5483. Segers v. Bestuur van de Bedrijfsvereniging voor Bank- en Verzekeringswezen, Groothandel en Vrije Beroepen, Case C-79/85 [1986] E.C.R. I-2375.

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that seemed to drive founders to the United Kingdom. Consequently, the ECJ unwittingly nudged Member States towards a certain vision of corporate law that was never intended by policymakers. This chapter proceeds as follows: the second section discusses the link between the freedom of establishment for companies and the European Community’s company law harmonization program, and how the limitations of harmonization resulted in a greater desire to limit the free choice of incorporation. The third section looks at the Segers and Daily Mail cases of the 1980s and how they were understood in the Member States. The fourth section explores the triad of Centros, Überseering and Inspire Art and its pathbreaking consequences for EU Company Law. The fifth section shows how the Court became more cautious in Cartesio. The sixth section discusses the effects of the Court’s decisions on the European corporate law discourse. The seventh section describes the vision of corporate law towards which the Court is unwittingly pushing the Member States. The final section summarizes and concludes.

the ec company law harmonization program and fears of a european delaware By the late 1960s, the EEC already embarked on its company law harmonization program. While agreement on a supranational legal form – the SE or Societas Europaea – could not be reached until 2001,7 the Community passed a series of directives addressing issues such as the validity of corporations and corporate acts,8 legal capital and creditor protection,9 mergers,10 split-ups11 as well as accounting12 during the first intense period of harmonization from the 7

8

9

10

11

12

Council Regulation 2157/2001/EC on the Statute for a European Company, 2001 O.J. (L) 294/1 [hereinafter SE Regulation]; on the history of the SE project, see Vanessa Edwards, The European Company – Essential Tool or Eviscerated Dream?, 40 Common Mkt. L. Rev. 443–50 (2003). First Council Directive of 9 March 1968 (68/151/EEC), 1968 O.J. (L 65) 8. The Directive has since been recodified as Directive 2009/101/EC, 2009 O.J. (L 258) 11. Second Council Directive of 13 December 1976, 1977 O.J. (L 26) 1. The directive has been recodified as Directive 2012/30/EU, 2012 O.J. (L 315) 74. Third Council Directive 78/855/EEC of 9 October 1978 based on Article 54 (3) (g) of the Treaty concerning mergers of public limited liability companies, 1978 O.J. (L 295) 36. It has now been replaced with Directive 2011/35/EU of the European Parliament and of the Council of 5 April 2011 concerning mergers of public limited liability companies, 2011 O.J. (L 110) 1. Sixth Council Directive 82/891/EEC of 17 December 1982 based on Article 54 (3) (g) of the Treaty, concerning the division of public limited liability companies, 1982 O.J. (L 378) 47. Fourth Council Directive of 25 July 1978 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies (78/660/EEC),1978 O.J. (L 222) 1; Seventh Council

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1960s through the 1980s.13 During this period, the German corporate law model was particularly influential,14 although obviously many compromises between Continental and English ideas had to be made after the United Kingdom joined the EU in 1973.15 Harmonization of company law was considered necessary in the EC for two reasons, both of which are closely linked to the freedom of establishment. First, as is evident from the Treaty itself, to achieve the freedom of establishment in the internal market, it was considered necessary for shareholders as well as third parties interacting with corporations (such as creditors and contracting parties) to be able to rely on a certain level of minimum standards. The Treaty authorized the Council and the Commission to coordinate “to the necessary extent the safeguards which, for the protection of the interests of members and others, are required by Member States of companies or firms . . . to making such safeguards equivalent throughout the Community.”16

13

14

15

16

Directive of 13 June 1983 based on the Article 54 (3) (g) of the Treaty on consolidated accounts (83/349/EEC), 1983 O.J. (L 193) 1. The two directives were consolidated into Directive 2013/34/ EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC, 2013 O.J. (L 182) 19. For an overview of the directives, see, e.g. Jan Wouters, European Company Law: Quo vadis?, 37 Common Mkt. L. Rev. 257, 258–60 (2000); Luca Enriques, EC Company Law Directives and Regulations: How Trivial Are They?, 27 U. Pa. J. Int’l Econ. L. 1, 69–75 (2006); Mads Andenas, EU Company Law and the Company Laws of Europe, 6 Int’l & Comp. Corp. L.J. 7, 21–28 (2008). E.g. Angel Rojo, The Typology of Companies, in European Company Laws (Robert R. Drury & Peter G. Xuereb eds. 1991) 41, 47 (identifying a “Germanization of the EEC member states’ laws” as the result of the directives); Krešimir Piršl, Trends, Developments, and Mutual Influences between United States Corporate Law(s) and European Community Company Law (s), 14 Colum. J. Eur. L. 277, 332–33 (2008) (noting that German law was considered the most modern at that time and also satisfied the Commission’s preference for complexity); HansJürgen Hellwig, Das deutsche Gesellschaftsrecht und Europa – Ein Appell zu mehr Offenheit und Engagement, 2012 Zeitschrift fu¨r Unternehmens- und Gesellschaftsrecht [ZGR] 216, 217–18; see also Eric Stein, Harmonization of European Company Laws 101 (1971) (noting that German law was considered as the principal model); Stefan Grundmann, European Company Law 205 (2nd ed. 2012) (noting the strong influence of German law on the Second Directive). E.g. Hellwig, supra note 14, at 218–19 (noting an increasing influence of English law, in part because of more targeted personnel policies in Brussels by the UK government). Treaty Establishing the European Economic Community, Mar. 25, 1957, art. 54(3)(g) [hereinafter EEC Treaty], and subsequently Consolidated Version of the Treaty Establishing the European Community art. 44(2)(g), 2006 O.J. C 321 E/37 [hereinafter EC Treaty]; Consolidated Version of the Treaty on the Functioning of the European Union art. 50(2)(g), 2008 O.J. C 115/47 [hereinafter TFEU]. E.g. Walter Hallstein, Angleichung des Privat- und Prozessrechts in der Europäischen Wirtschaftsgemeinschaft, 28 Rabels Zeitschrift fu¨r ausla¨ndisches und internationales Privatrecht [RabelsZ] 211, 212 (1964); Andenas, supra

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The First Directive, which applied both to Public Limited Liability Companies17 and Private Limited Liability Companies,18 required that firms disclose, among other things, their statutes, the names of individuals authorized to represent it, as well as accounting information.19 To protect third parties relying on contracts, it ensured that these could not be repudiated on the basis that they were ultra vires,20 and it limited the circumstances of the company’s nullity and stated that it could apply only prospectively.21 For creditors, during this period, it was assumed to be crucial to be able to rely on the firm’s legal capital, a Continental concept that was the centrepiece of the Second Directive. Public – but not private – limited liability companies were required to have a minimum capital (art. 6),22 were subjected to protective and procedural requirements for capital increases (art. 25) and reductions (art. 30), and were subjected to capital maintenance rules and the prohibition against returning the capital to shareholders (art. 15). Moreover, under the Directive, firms must grant preemptive rights to the existing shareholders in the event of a share issue (art. 29). The initial measures were largely uncontroversial at that time and, in part, led to a more modern company law in some countries,23 even though the relatively general statements in the preambles and of EU policymakers did not always make it clear how exactly the various harmonization measures were supposed to contribute to the development of the Common

17 18

19 20

21

22

23

note 13, at 9; Yves Guyon, La coordination communautaire du droit français des sociétés, 26 Revue Trimestrielle de Droit Europe´en [RTDE] 241, 241 (1990); see also Guyon, id., at 247 (finding that contracting parties were the main beneficiaries of harmonization). This includes the Aktiengesellschaft (AG), société anonyme (SA), and società per azioni (spa). This includes the Gesellschaft mit beschränkter Haftung (GmbH), société à responsabilité limitée (SARL), and società à responsabilità limitata (sarl). Directive 2009/101/EC, art. 2. All original Member States besides Germany adhered to the ultra vires doctrine before the enactment of the First Directive. See Stein, supra note 14 at 283–87. Directive 2009/101/EC, art. 9 (regarding ultra vires), art. 10–12 (regarding nullity). In the recodified version of 2009 art. 10 governs ultra vires, and art. 11–13 govern nullity. On the latter, see, e.g., Robert Drury, Nullity of Companies in European Company Laws, supra note 14, at 247, 250–53. See already R. Houin, Le régime juridique des sociétés dans la Communauté Économique Européenne, 1 RTDE 11, 14 (1965) (noting the importance of the harmonization of company disclosure and reasons for nullity of the corporation). The delineation between public and private companies limited by shares in the United Kingdom and Ireland was the source of considerable controversy and became more pronounced because of the directive. See Clive Schmitthoff, The Second EEC Directive on Company Law, 15 Common Mkt. L. Rev. 43, 43–46 (1978). Richard M. Buxbaum, Is There a Place for a European Delaware in the Corporate Conflict of Laws, 74 RabelsZ 1, 12 n.31 (2010).

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Market.24 However, the originally planned harmonization program went far beyond the relatively limited measures that were actually implemented. These included, for example, a draft Fifth Directive that would have harmonized board structure (including employee participation on the board) and detailed shareholder powers.25 Proponents argued that nearly complete harmonization of company laws was necessary to achieve equal conditions of competition between companies from different states.26 Second, a look at contemporary views on harmonization reveals that the applicable conflicts of law rules for corporations and harmonization were linked. Except for the Netherlands, all of the original six Member States applied the real seat rule.27 Yet, some contemporary sources make clear that the prevailing understanding in the 1960s was that, since the freedom of establishment applied to companies, Member States would not be able to maintain restrictions on foreign firms as long as they maintained a registered office, central administration or principal place of business anywhere in the community territory.28 In other words, the real seat theory may have been doomed, even if that understanding was not entirely universal.29

24

25

26

27 28

29

Richard M. Buxbaum & Klaus J. Hopt, Legal Harmonization and the Business Enterprise 196–204 (1988) (summarizing the rationales given for harmonization and critiquing their unstated assumptions). See, e.g. Walter Kolvenbach, EEC Company Law Harmonization and Worker Participation, 11 U. Pa. J. Bus. L. 709, 720–33 (1990). See e.g. Marcus Lutter, Die Entwicklung des Gesellschaftsrechts in Europa, 10 Europarecht [EuR] 44, 48 (1975). Houin, supra note 21, at 22; Stein, supra note 14 at 29–31, 53, 397. TFEU art. 54. The provision at that time was art. 58 of the Treaty of Rome. See Stein, supra note 14, at 28–29 (noting that it is not necessary that a company maintains both a registered office and a real seat in the community); see also Houin, supra note 21, at 24 (noting that Member States could not invoke public policy (“ordre publique”) to refuse the recognition of companies incorporate in other Member States, given that there is a European public policy of higher order); Ulrich Drobnig, Kritische Bemerkungen zum Vorentwurf eines EWGÜbereinkommens über die Anerkennung von Gesellschaften, 129 Zeitschrift fu¨r das gesamte Handels- und Wirtschaftsrecht [ZHR] 92, 101–02 (1966); Bernard Großfeld, Die Anerkennung der Rechtsfähigkeit juristischer Personen, 31 RabelsZ 1, 18 (1967) (noting that the EEC has decided in favor of the incorporation theory for all practical purposes); Peter Doralt, Anerkennung ausländischer Gesellschaften, 91 Juristische Bla¨tter [JBl] 181, 196 (1969) (noting that Austria would have to abandon the real seat theory if it were to join the EEC with respect to other Member States); Alfred F. Conard, Company Laws of the European Communities from an American Viewpoint, in The Harmonisation of European Company Law 44, 56, 58 (Clive M. Schmitthoff ed. 1973) (explaining that the treaty endorses the incorporation theory). E.g. P. Leleux, Corporation Law in the United States and in the E.E.C., 5 Common Mkt. L. Rev. 133, 149 (1967) (“There is nothing in the Treaty of Rome that would require continental legal traditions on this point to be altered”).

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The spectre of corporate law arbitrage haunted European Company Law from its inception and was evident to early commentators. For example, Houin, writing in 1965, was concerned that companies might be able to opt out of protections for third parties by choosing lax laws.30 During the EEC Treaty negotiations, the French delegation in particular feared that the Netherlands might become the Delaware of Europe, given that its corporate law was the most permissive at that time.31 As Timmermans (who served on the ECJ from 2000 to 2010) put it, some saw harmonization as a quid pro quo in the negotiation of the EEC Treaty for granting the freedom of establishment also to companies.32 Even if the Treaty did not formalize this by making harmonization a prerequisite for the full exercise of the freedom, it was often thought that it could – at least for the time being – be interpreted in a way that would permit restrictions until harmonization was achieved. For example, Everling (on the court from 1980 to 1988) suggested in his 1964 book on the freedom of establishment that the Member States could – in spite of the Treaty – refuse the recognition of companies whose registered office and real seat were in different states on grounds of public policy “until the provisions for protection of creditors have been coordinated.”33 The original assumption was that company law would largely be quite extensively harmonized by the end of the transition period for the common market in 1969.34 It was thought that harmonization would cover “all provisions concerning structure and organs of companies, formation and maintenance of its capital, the composition of the profit and loss account, the issue of securities, mergers, conversions, liquidations, guarantees required in cases of

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Houin, supra note 21, at 16. Christiaan W. A. Timmermans, Die europäische Rechtsangleichung im Gesellschaftsrecht, 48 RabelsZ 1, 13 (1984); Christian Timmermans, Methods and Tools for Integration. Report, in European Business Law: Legal and Economic Analyses on Integration and Harmonization 129, 132 (Richard M. Buxbaum, Alain Hirsch & Klaus J. Hopt eds. 1991). Timmermans, Rechtsangleichung, supra note 31, at 12–14; Timmermans, Methods, supra note 31, at 132; see also Alfred F. Conard, The European Alternative to Uniformity in Corporation Laws, 89 Mich. L. Rev. 2150, 2190 (1991) (noting that France and Germany required “equivalent safeguards” to open their markets to corporations from other member states); Piršl, supra note 14, at 326 (describing harmonization as “price” or “necessary compensation” required by some member states to accept freedom of establishment). Ulrich Everling, The Right of Establishment in the Common Market } 312 (1964). Houin, supra note 21, at 13–14 (noting that the directives were supposed to come into being by December 31, 1964); Stein, supra note 14, at 36–37; see also Stein, supra note 14, at 37–41 (discussing a two-year standoff between the Commission and Germany regarding the elimination of a ministerial authorization requirement to do business required of foreign companies).

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company concentrations, etc.”35 Some authors even questioned whether an independent and comprehensive national reform of corporate law (which happened in both France and Germany in the 1960s) was still permissible in light of the EEC’s plans,36 and some suggested that a full unification of company law would be desirable.37 Großfeld wrote in 1967 that it cannot be assumed that the existing restrictions on foreign corporations would cease to apply if the laws of the Member States have not been sufficiently approximated.38 By the end of the transition period, however, only one directive was promulgated, and the subsequent directives required more compromise after the entry of the United Kingdom and Ireland into the community. The Member States were thus confronted with only marginal harmonization, while the freedom of establishment began to apply. A “Convention on the Mutual Recognition of Companies and Bodies Corporate” was signed in 1968, but it never came into force because the Netherlands never ratified it.39 This convention would have permitted Member States to apply their own mandatory laws to corporations whose registered office was elsewhere,40 and would thus have obviated the need for the real seat theory.41 Most Member States thus continued to adhere to the real seat theory even though the harmonization was not a legal quid pro quo for the freedom of establishment of companies in the treaties. The fact that harmonization was still an ongoing project seemed to support the argument that a “flexible” view of the relationship between the Treaty and the recognition of foreign companies was acceptable. The US model of competing jurisdictions and Delaware’s dominant role among large public corporations was known in Europe in the 1960s, as well as

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Wouters, supra note 13, at 268 (quoting from the Berkhouwer report of 1966). 37 Stein, supra note 14, at 162–63 (summarizing the debate). Houin, supra note 21 at 12. Großfeld, supra note 28, at 20–21. Convention on the Mutual Recognition of Companies and Bodies Corporate, February 29, 1968, E.C. Bull. Supp. 2-1969, at 7. Regarding ratification, see Timmermans, Methods, supra note 31, at 149, 151; Werner F. Ebke, Centros – Some Realities and Some Mysteries, 48 Am. J. Comp. L. 623, 636 n.83 (2000); Helen Xanthaki, Centros: Is this really the end for the theory of the siege real?, 22 Comp. Law. 2, 3 (2001). Convention on the Mutual Recognition of Companies and Bodies Corporate, E.C. Bull. Supp. no. 2-1969 art. 4; See Leleux, supra note 29, at 148; Conard, European Alternative, supra note 32, at 2161. Apparently this is the reason for the Dutch disapproval of the convention. Brigitte Knobbe-Keuk, Umzug von Gesellschaften in Europa, 154 ZHR 325, 330 (1990). See also Timmermans, Rechtsangleichung, supra note 31, at 39 (doubting the legality of such a convention in light of the EC competence to harmonize company law to further the freedom of establishment).

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the argument that its preeminent position had lead to a “liberalization” of corporate law.42 Writing in 1973, Clive Schmitthoff opined: “The Community cannot tolerate the establishment of a Delaware in its territory.”43 In the meantime, across the Atlantic, William Cary’s famous 1974 article44 launched the debate about the “race to the bottom” in the United States.45 While in the United States a counterview that posited a “race to the top” emerged in the following years,46 Continental European corporate law scholars and policymakers remained sceptical about the purifying powers of the market, which, according to that view, ultimately results in better laws because of member state competition and the pressure of market forces.47 Thus, corporate conflict of law rules remained protectionist.48 Allowing a free choice of corporate law (as in the United States) would have enabled individuals to circumvent the respective national schemes purporting to protect shareholders and third parties interacting with the firm. The fact that the early harmonization program of the EC remained a patchwork helped to justify the continued use of the real seat theory, which was not put to the test of the ECJ’s stringent scrutiny for several decades. The effect was not just that local stakeholders

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See e.g. Y. Scholten, Company Law in Europe, 4 Common Mkt. L. Rev. 377, 390 (1967); Großfeld, supra note 28, at 39–42; Leleux, supra note 29, at 138, 150–52. Clive M. Schmitthoff, The Future of the European Company Law Scene, in The Harmonisation of European Company Law, supra note 28, at 3, 9. See e.g. William L. Cary, Federalism and Corporate Law: Reflections Upon Delaware, 83 Yale L.J. 663 (1974). A modified “race to the bottom” perspective is today most identified with Lucian A. Bebchuk, Federalism and the Corporation: The Desirable Limits on State Competition in Corporate Law, 105 Harv. L. Rev. 1435 (1992). Ralph K. Winter, State Law, Shareholder Protection, and the Theory of the Corporation, 6 J. Leg. Stud. 251 (1977); Roberta Romano, Law as a Product: Some Pieces of the Incorporation Puzzle, 1 J. L. Econ. & Org. 225 (1985); Frank H. Easterbrook & Daniel R. Fischel, The Economic Structure of Corporate Law 212–15 (1991); Roberta Romano, The Genius of American Corporate Law (1992). E.g. Werner F. Ebke, Die “ausländische Kapitalgesellschaft & Co. KG” und das europäische Gemeinschaftsrecht, 16 ZGR 245, 259–63 (1987) (comparing the situation in Europe with regulatory competition in the US, in particularly criticizing the argument that investors are adequately protected by market forces); Harm-Jan de Kluiver, European and American Company Law. A Comparison after 25 Years of EC Harmonization, 1 Maastricht J. Eur. & Comp. L. 139, 152 (1994) (noting that the literature on harmonization sometimes points out a “Delaware effect.”) Arguably, in an environment with less developed capital markets such as most in Continental Europe, the likelihood of a race to the top may be smaller anyway, even competition would likely be less intense in Europe due to smaller incentives to compete. E.g. Martin Gelter, The Structure of Regulatory Competition in European Corporate Law, 5 J. Corp. L. Stud. 247, 274 (2005). Peter Behrens, Niederlassungsfreiheit und internationales Gesellschaftsrecht, 52 RabelsZ 498, 512 (1988) (discussing the real seat theory as a protective theory).

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were shielded from arguably problematic foreign law but also that national laws were protected from competition by other legal systems. While the incorporation theory was arguably on the rise until the 1960s,49 the spectre of regulatory competition may subsequently have had the opposite effect and seems to have helped the hitherto controversial and uncodified real seat theory to solidify in the German literature and case law from the 1970s. In the absence of meaningful harmonization, the real seat theory was considered necessary to protect shareholders, employees and creditors, and therefore a justifiable limitation of the freedom of establishment.50 Halbhuber provocatively indicted German legal scholars for rewriting legal history, specifically focusing on shifts in the published views of the influential scholar Bernhard Großfeld. While in 1967 Großfeld stated that the Treaty implicitly endorsed the incorporation theory, in 1981 the same author wrote that the Treaty did not deal with the recognition of companies, presumably (according to Halbhuber) because the ECJ had, in the meantime, found that the freedom of establishment had direct legal effect.51

clinging to daily mail The 1980s saw two important cases potentially relating to the issue at hand, with seemingly conflicting outcomes. The first was the Segers case of 1986.52 Mr. Segers incorporated in England and was now the director of an English company that did business only in the Netherlands. According to the Dutch authorities, he was not eligible for health benefits provided by the national Dutch health care systems. The ECJ found that the freedom of establishment prohibited Member States from excluding a director “from a national sickness insurance benefit scheme solely on the ground that the company in 49

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Großfeld, supra note 28, at 14–22; but see Ernst Rabel, 2 The Conflict of Laws 52 (1960) (suggesting that the real seat theory dominated in Germany at that time). Ebke, Realities, supra note 39, at 649 (citing Bernhard Großfeld for the proposition that the real seat theory is condition on the absence of meaningful harmonization); Carsten Thomas Ebenroth & Uwe Eyles, Die Beteiligung ausländischer Gesellschaften an einer inländischen Kommanditgesellschaft, 41 Der Betrieb [DB], Beilage 1, 12, 19, 20 (1988). Harald Halbhuber, Limited statt GmbH? Europarechtlicher Rahmen und deutscher Widerstand 118–23 (2001); Harald Halbhuber, National Doctrinal Structures and European Company Law, 38 Common Mkt. L. Rev. 1385, 1402 (2001). This was established in Reyners v. Belgium, Case C-2/74, (1974) E.C.R. 631, where the Court dealt with a Dutch national born and raised in Belgium seeking admission to the Belgian bar. Contrary to the argument of the Belgian government, according to which the freedom of establishment required implemented through national or EC legislation, the Court found that Mr. Reyners could request admission based directly on the freedom of establishment. Segers, C-79/85.

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question was formed in accordance with the law of another Member State, where it also has its registered office, even though it does not conduct any business there.” Just two years later, the court decided Daily Mail.53 An English company had intended to establish its central management in the Netherlands while staying incorporated in the United Kingdom, apparently to save taxes. British tax authorities imposed an “exit tax” on the corporation and refused their consent to the transfer until the exit tax had been paid. The ECJ did not object to the exit tax. More importantly, it explicitly discussed that some Member States require that “not only the registered office but also the real head office . . . should be situated in its territory,” while others, such as the United Kingdom, make the right to transfer its head office subject to conditions, particularly regarding taxation.54 In the court’s view, the Treaty regarded these differences as problems that would have to be resolved by future legislation or a convention.55 Consequently, the Court held that companies had no right, under the present state of EC law, “to transfer their central administration from their state of incorporation to another Member State while retaining their status as companies incorporated under the legislation of the first Member State.”56 At least superficially, the two cases seemed to contradict each other, and it is most telling of how they were received in the literature. Two Dutch commentators – namely the lawyer who had represented Mr. Segers and the future ECJ judge Timmermans – opined that the case implied the end of the real seat theory within the community.57 The view was, apparently, not shared within the legal service of the Commission, which read the case as limited to government benefits.58 Others argued that the decision was limited to cases where a firm created a secondary establishment in another Member State59 – which was somewhat at odds with the facts of the case since Mr. Segers had simply incorporated his Dutch business in the United Kingdom.60 Even many

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54 55 56 Daily Mail, C-81/87. Id. at } 20. Id. at } 23. Id. at } 24. Inne G.F. Cath, Freedom of Establishment of Companies: A New Step Towards Completion of the Internal Market, 6 Y.B. Eur. L. 246, 261 (1986); Timmermans, Methods, supra note 31, at 134–141; similarly, see Takis Tridimas, The Case-Law of the European Court of Justice on Corporate Entities, 13 Y.B. Eur. L. 335, 344 (1993) (suggesting that there is only a secondary, but no primary right of establishment, meaning that the state of origin can impose restrictions, while the host state cannot). Geoffrey Fitchew, Discussion, in European Business Law, supra note 31, at 154. Ebenroth & Eyles, Die Beteiligung, supra note 50, at 11; see also Halbhuber, National Doctrinal Structures, supra note 51 at 1388 (suggesting that German analysts may not have had the full text of the case available). E.g. Alexandros Roussos, Realising the Free Movement of Companies, 2001 Eur. Bus. L. Rev. 7, 12 (“The case is normally regarded as one of secondary establishment but perhaps incorrectly so”).

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scholars contesting the compatibility of the real seat theory with the Treaty paid surprisingly little attention to the decision.61 Daily Mail, however, in the summary response to the first question asked to the court, clearly stated that “in the present state of Community law, Articles 52 and 58 of the Treaty, properly construed, confer no right on a company incorporated under the legislation of a Member State and having its registered office there to transfer its central management and control to another Member State.” On its face, this key sentence seemed to confirm the compatibility of the real seat theory with the Treaty. Many adhered to the idea that “the freedom of establishment was directly applicable only with respect to secondary establishment,”62 which in retrospect seems implausible in light of the much more cursory discussion in Segers. Without a deliberate attempt to construe Daily Mail narrowly in the light of its facts – namely the capability of a Member State to prevent a company from moving its head office to another State while retaining its legal form63 – or to

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E.g. Behrens, Niederlassungsfreiheit, supra note 48, at 504, 520 (considering the theory incompatible with the Treaty, but not considering the implications of Segers while citing that decision); Knobbe-Keuk, supra note 40 (arguing against the real seat theory but not mentioning Segers); Marco Gestri, Mutuo Riconoscimento delle società comunitarie, norme di conflitto nazionali e frode alla legge: Il case Centros, 83 Rivista di diritto internazionale 71, 80 (2000) (noting that the majority of scholars considered the real seat theory to be permissible in light of Daily Mail); Andrea Perrone, Dalla libertà di stabilimento alla competizione fra gli ordinamenti? Riflessioni sul “caso Centros,” 46 Rivista delle Societa` 1292, 1297 (2001) (describing Segers as a decision receiving little attention); but see Carsten Thomas Ebenroth & Uwe Eyles, Die innereuropäische Sitzverlegung des Gesellschaftssitzes als Ausfluß der Niederlassungsfreiheit? (Teil I), 42 DB 363, 371 (1989) (arguing that the Court misinterpreted the Treaty); Ebke, ausländische, supra note 47, at 250 (describing Segers as problematic). Grundmann, supra note 14, § 25 }22 (summarizing this point of view); see also Robert R. Drury, Migrating Companies, 24 Eur. L. Rev. 354, 360 (1999); Alessandro della Chà, Companies, Right of Establishment and the Centros Judgment of the European Court of Justice, 2000 Diritto del commercio internazionale 925, 933–36; Omar, supra note 4, at 403; Francisco Garcimartín Alférez, La Sentencia “Centros”: el status quaestionis un año después, 195 Noticias de la Unio´n Europea 79, 84 (2000) (noting that the majority of authors considered the Treaty not to affect the recognition of companies). But see Tridimas, supra note 57, at 343 (noting the contradiction between the two cases and criticizing the Court for not applying the freedom of establishment more proactively); Massimo V. Benedettelli, Libertà comunitarie di circolazione e diretto internazionale private delle società, 2001 Rivista di diritto internazionale privato e processuale 569, 582 (summarizing criticism of Daily Mail, while probably overstating its prevalence as a prevailing opinion among scholars). But see Knobbe-Keuk, supra note 40, at 332–33 (opposing the real seat theory and criticizing the ECJ for making unnecessary statements not necessary for the case); Andreas Reindl, Companies in the European Community: Are the Conflict-of-Law Rules Ready for 1992? 11 Mich. J. Int’l L. 1270, 1281–85 (1990) (suggesting a narrower reading of Daily Mail would be possible); Benedettelli, supra note 64, at 582–83 (suggesting that the key sentences in Daily Mail were basically obiter dicta written because of judicial self-restraint).

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distinguish the two cases, Daily Mail thus came as a godsend for those cherishing the role of the real seat theory as a protective mechanism against regulatory arbitrage in corporate law. For the coming decade, the Continental, particularly German, scholarship64 could thus cling to this case as a justification of the real seat theory. In spite of possible objections to this broad reading, such as the fact that Daily Mail dealt with two incorporation theory countries, with the situation of a firm “exiting” the Member State in question as opposed to entering it, and even though the United Kingdom’s fiscal interests were at stake, Segers’ could be safely set aside. While Daily Mail did not distinguish or overrule Segers, or even mention it, those analysts aware of Segers considered it irrelevant or implicitly overruled.65 For example, Merkt, writing about the prospects for regulatory competition in Europe in 1995, saw the Daily Mail doctrine as firmly entrenched and considered it implausible that the court would soon abandon it.66 As documented by Halbhuber, Daily Mail was widely cited in the German academia, while Segers remained apocryphal.67 The passage of the case dealing explicitly with the circumvention of national corporate law was omitted in German law journals,68 and that the court had met in a chamber of three judges and not in a plenary session as in Daily Mail, may also have played a role. Quite tellingly, in a 1998 case, a German Court of Appeals rejected the registration of a branch office of a pseudo-English company and refused to submit the question to the ECJ. Citing Daily Mail, the court argued that nothing had changed since 1988. Implicitly elevating the quid pro quo theory to an element of the EC Treaty, the Court said that the harmonization of Member State

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Halbhuber, supra note 51, at 50–52 (arguing that most of the non-German literature did not share this understanding of the case). See e.g. Peter v. Wilmowsky, Gesellschafts- und Kapitalmarktrecht in einem gemeinsamen Markt, 56 RabelsZ 521, 536 (1992) (discussing Timmermans’argument that the real seat theory was incompatible with the Treaty in light of Segers, but considering it outdated in light of Daily Mail); Ebenroth & Eyles, Die innereuropäische, supra note 61, at 372 (suggesting that Daily Mail made it clear that the Treaty does not override national rules of conflict of laws relating to incorporations). E.g. Hanno Merkt, Das europäische Gesellschaftsrecht und die Idee des “Wettbewerbs der Gesetzgeber, 59 RabelsZ 545, 563 (1995) (considering it implausible that the Court would abandon Daily Mail soon in light of the recently established principle of subsidiarity). The view that the real seat theory was compatible with the Treaty was not limited to Germany, as other Member States continued to apply it. See, e.g. Francisco J. Garcimartín Alférez, El Tratado CE y la Sitztheorie: El TJCE considera – por fin – que son incompatibles, 51 Revista Espan˜ola de Derecho Internacional Privado 295, 296 (1999). Halbhuber, National Doctrinal Structures, supra note 51 at 1390–95; for references, see supra note 59. Halbhuber, National Doctrinal Structures, supra note 51 at 1388.

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company law was not yet complete, and that the arguments brought for the incorporation theory could not substitute community legislation or international agreements between the Member States.69

“three strikes and you’re out” for the real seat theory The Centros case70 in 1999 thus came as a surprise to the Continent, particularly the German corporate law world. A Danish couple formed a Private Limited Company (“Limited”) in the United Kingdom – with the full intention of using it only for business purposes in Denmark – and requested that the Danish authorities register a branch office. After the registration was denied and a preliminary reference submitted to the ECJ, the Court found that the Danish company register violated the freedom of establishment. Legal scholars on the Continent subsequently began to discuss the implications, particularly in the context of private international law doctrine.71 Many saw the end of the real seat theory coming,72 particularly because the court explicitly stated that setting up a firm in one Member State and branches in other states in itself does not constitute an abuse of the treaty provisions.73 Many commentators – most of them German – tried to find ways around the case. Some suggested that the case did not apply in real seat theory countries, given that Denmark applied the incorporation theory as a matter of principle and only corrected its results by requiring proof of a genuine link

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Bayerisches Oberstes Landesgericht, August 26, 1998, 1 Neue Zeitschrift fu¨r Gesellschaftsrecht [NZG] 936 (1998). Centros, C-212/97. See Wulf-Henning Roth, From Centros to Ueberseering: Free Movement of Companies, Private International Law, and Community Law, 52 Int’l & Comp. L.Q. 177, 178 (2003); Omar, supra note 4, at 406 (both explaining that Centros received little attention in the United Kingdom, but stirred much discussion in Germany). E.g. Ulrich Forsthoff, Niederlassungsrecht für Gesellschaften nach dem Centros-Urteil des EuGH: Eine Bilanz, 2000 EuR 167, 182; Ilan Rappaport, Freedom of Establishment – a new perspective, 2000 J. Bus. L. 628, 633 (2000); Roussos, supra note 60, at 13–14; Gestri, supra note 61, at 86 (noting that the case blew a breach in the real seat theory); Thomas Bachner & Martin Winner, Das österreichische international Gesellschaftsrecht nach Centros (Teil I), 2000 Der Gesellschafter [GesRZ] 73; Garcimartín Alférez, La Sentencia, supra note 63, at 83; Peter Behrens, International Company Law in View of the Centros Decision of the ECJ, 1 Eur. Bus. Org. L. Rev. 125, 145 (2000); but see Eddy Wymeersch, Centros: A landmark decision in European Company Law, in Corporations, Capital Markets, and Business in the Law: Liber Amicorum Richard Buxbaum 629, 642–44 (noting that the real seat theory can no longer be used to deny the recognition of a company, but may serve other purposes). Centros, C-212/97, at }27.

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to the home country before registering a branch office.74 Since the court said, “the Treaty regards the differences in national legislation concerning the required connecting factor . . . as problems which are not resolved by the rules concerning the right of establishment,”75 it was argued that the case, like Daily Mail, left the conflict-of-law rules regarding the recognition of foreign companies intact.76 In other words, Centros was understood not to apply to real seat theory countries because – other than Denmark – they did not recognize the existence of firms such as Centros Ltd at all. Just four months later, the Austrian Supreme Court found that the real seat theory, which was enshrined in an explicit statute, could no longer apply to EU firms in light of Centros.77 Many proponents of the real seat theory criticized the court, which had apparently misunderstood Denmark to be a real seat country.78 Given that the ECJ did not engage with private international law theories at all,79 the academic position that the freedom of

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Erik Werlauff, The Main Seat Criterion in New Disguise – An Acceptable Version of the Classic Main Seat Criterion, 2001 Eur. Bus. L. Rev. 2, 3 (explaining that Danish law applies the incorporation theory with a “genuine link” criterion). Centros, C-212/97, at }23. Peter Kindler, Niederlassungsfreiheit für Scheinauslandsgesellschaften? Die“Centros”– Entscheidung des EuGH und das internationale Privatrecht, 1999 Neue Juristische Wochenschrift [NJW] 1993, 1996–99; Knut Werner Lange, Note, 1999 Deutsche Notariatszeitung [DNotZ] 599, 605; Hans Jürgen Sonnenberger & Helge Großerichter, Konfliktlinien zwischen internationalem Gesellschaftsrecht und Niederlassungsfreiheit, 45 Recht der internationalen Wirtschaft [RIW] 721, 726–27 (1999); Wulf-Henning Roth, Case note, 37 Common Mkt. L. Rev. 147, 153–54 (2000); Ebke, Realities, supra note 39, at 633, 660; Xanthaki, supra note 39, at 7; see also Marc Lauterfeld, “Centros” and the EC Regulation on Insolvency Proceedings: The End of the “Real Seat” Approach towards Pseudo-foreign Companies in German International Company and Insolvency Law?, 2001 Eur. Bus. L. Rev. 79, 80 (summarizing this line of reasoning); similarly, Diana Sancho Villa, La dudosa compatibilidad con el derecho comunitario de la construcción del tribunal de justicia de la Comunidad Europea en el sentencia Centros Ltd., 1999 La Ley 1851, 1857 (arguing that the Centros decision is generally incompatible with EU law, but that it could be read narrowly by leaving the real seat theory permissible following Daily Mail). Oberster Gerichtshof, July 15, 1999, 6 Ob 123/99b. E.g. Ebke, Realities, supra note 39, at 657 (suggesting that the Austrian court misunderstood the ECJ); Jörg Zehetner, Niederlassungsfreiheit und Sitztheorie, 1999 ecolex 771; Stefan Korn, Sitztheorie contra Niederlassungsfreiheit: Die Private Limited Company mit Hauptverwaltung in Österreich, 2000 Wirtschaftsrechtliche Bla¨tter [wbl] 56; Kristin Nemeth, Case Law, 37 Common Mkt. L. Rev. 1277, 1281–84 (2000); Norbert Kuehrer, Crossborder company establishment between the United Kingdom and Austria, 12 Eur. Bus. L. Rev. 110, 117 (2001); but see Werlauff, supra note 74, at 3 (explaining the Danish law, but suggesting that the Austrian court had correctly applied EU law). E.g. Ulrich Forsthoff, Niederlassungsfreiheit für Gesellschaften nach dem Centros-Urteil des EuGH: Eine Bilanz, 2000 EuR 167 (noting that the ECJ is only interested in the effects of national law and does not address the theories as such).

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establishment would somehow only apply to incorporation theory countries was untenable even then, but it illustrates how real seat theory proponents clung to their turf. Given the discussion whether Centros applied only in incorporation theory countries or only to secondary establishments,80 the death knell for the real seat theory only came with the Überseering case of 2002,81 which concerned Germany, the real seat country par excellence.82 Two Germans bought all the shares of a Dutch BV (Besloten vennootschap, i.e. a private limited liability company) and led it to conduct all of its business in Germany. Following the radical German interpretation of the real seat theory, German courts would have denied the existence of Überseering BV as a legal entity. Yet, in a preliminary reference ruling, the ECJ held that German courts could not do so when a Member State company simply exercised its freedom of establishment. The Court, in particular, addressed how the new judgment was to be reconciled with Daily Mail, which served as support for the real seat theory, but – to the surprise of many observers – was not even mentioned in Centros. To the Überseering court, Daily Mail concerned the relationship between companies and their state of incorporation, while Centros and Überseering dealt with restrictions on the company’s right of establishment imposed by other states.83 While the case was pending, the German Bundesgerichtshof (Federal Supreme Court) decided that a non-EU pseudo-foreign corporation could be accorded legal capacity as a partnership.84 Inconveniently, this rendered its members personally liable.85 This may have been a last-minute attempt to save the real seat theory, but it came too late, and the damage was done. For most intents and purposes, for the establishment of companies

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E.g. Jean-Matthieu Jonet, La théorie du siège réel a l’épreuve de la liberté d’établissement, 11 Journal des tribunaux droit Europeen 33, 34 (2002) (discussing doubts about the scope of Centros). Überseering BV, C-208/00. E.g. Thomas Bachner, Freedom of Establishment for Companies: A Great Leap Forward, 62 Cambridge L.J. 47, 49 (2003) (“this is the end of the theory of the real seat”). Überseering BV, C-208/00, at }62. See, e.g. Eva Micheler, 2003 Int’l & Comp. L.Q. 521, 524; Paul J. Omar, Centros, Uberseering and Beyond, A European Recipe for Corporate Migration, Part 2, 16 Int’l Comp. & Com. L. Rev. 18, 21 (2005). Bundesgerichtshof [BGH] [Federal Court of Justice] July 1, 2002, II ZR 380/00, NJW 2002, 3539. See, e.g. Roth, supra note 71, at 207; but see Hellwig, supra note 14, at 227–28 (interpreting the decision as part of a struggle between the Court’s 2nd senate, which is normally responsible for corporate law, and the 7th senate, which is responsible for construction contracts and had submitted the preliminary reference to the ECJ in Überseering). See Baelz & Baldwin, supra note 4, }23 (noting that this approach is likewise incompatible with the freedom of establishment).

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within the EU, the real seat theory was dead.86 After Überseering, the zombie idea that the freedom of establishment did not apply in real seat countries quickly disappeared from the pages of legal journals.87 The third strike, Inspire Art, came a year later, paradoxically in the Netherlands, a country that has long (at least since the 1960s) applied the incorporation theory.88 The Dutch law on “formally foreign companies” at that time imposed a number of restrictions against those companies from whose intrusion the real seat theory was intended to provide protection.89 Most importantly, directors of such a company were jointly and severally liable if the company did not have the minimum capital required by Dutch law.90 Interestingly, some US states, notably New York and California, have statutes of this type called pseudo-foreign incorporation laws and apply them to other states in the union.91 These laws’ compatibility with the US Constitution is debatable,92 but it has never been tested in the federal courts. The ECJ, however, found that the Dutch law violated the freedom of establishment. As in Centros, the Court applied the Gebhard criteria, according to which restrictions on the freedom of establishment “must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the public interest; they must be suitable for securing the attainment of the objective which they pursue, and they must not go beyond what is necessary in order to attain it.”93 The Court also repeated that the Member States could implement measures against fraud.94 Blanket measures applying to all “formally foreign corporations,” such as imposing

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See also Paul Lagarde, Note, 92 Revue Critique de Droit international Prive´ [RCDIP] 524, 531–32 (2003) (noting that this reintroduction in a decision of the German Supreme Court also violates the freedom of establishment). For an overview of opinions, see Grundmann, supra note 14, § 25 } 26. Großfeld, supra note 28, at 15 (citing a 1959 law following the incorporation theory). Interestingly, the Dutch law came into force only in 1998 and reflected an increasingly protective attitude toward company law in the Netherlands, which had applied the incorporation theory for several decades and became now concerned with an increasing number of companies incorporated abroad deliberately to avoid Dutch law. See Timmermans, supra note 31, at 151; Harm-Jan de Kluiver, Inspiring a New European Company Law?, 1 Eur. Company & Fin. L. Rev. 121, 123–25 (2004). For further details, see Inspire Art Ltd., C-167/01, at }} 22–33. Cal. Corp. Code § 2115; N.Y. Bus. Corp. L. §§ 1317–20. See, e.g. Franklin A. Gevurtz, Corporation Law 36–37 (2nd ed. 2010); Buxbaum, supra note 23, at 19–21. Gebhard v. Consiglio dell’Ordine degli Avvocati e Procuratori di Milano, Case C-55/94 [1995] E.C.R. I-4165, } 37; Centros Ltd., Case C-212/97 [1999] E.C.R. I-1459. }34; Inspire Art Ltd., C-167/01, at }133. Inspire Art Ltd., C-167/01, at }136.

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domestic capitalization requirements, however, are off limits as they are regarded as a restriction of the freedom of establishment. Over the decades, scholars (including those favouring the incorporation theory) often thought that the Member States could, similar to the Dutch law, apply at least some of their domestic corporate laws to mitigate the effects of the incorporation theory.95 Some continued to hold this view after Centros.96 Ironically, the Netherlands, whose government in fact argued against the restrictions on the recognition of legal personality in its submissions to the Überseering court,97 ended up being called out by the Court for employing a less restrictive measure. The peculiar consequence is now that the freedom to apply their corporate law policies to such companies is more curtailed for EU Member States than the component states of the United States. The Member States seemed to have slid into this situation, which likely was not intended when the Treaty was drafted. As empirical research a few years later showed, after Inspire Art, the number of incorporations of private limited liability companies in the United Kingdom with the apparent objective of doing business in Continental European countries skyrocketed.98 In Germany, where the demand for English limited companies was particularly strong, it was met by a number of private agencies that took care of formalities for the creation of English limited companies for customers in Germany, offering their services over the Internet, thus providing a stark contrast to the typical necessity of seeking the expensive certification by a civil law notary to set up a domestic company. This opportunity did not immediately present itself in all countries equally. Becht, Enriques and Korom performed an experimental study in which they asked correspondents

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E.g. Houin, supra note 21, at 23; Großfeld, supra note 28, at 20–21; Conard, Company Laws, supra note 28 at 58; Behrens, Niederlassungsfreiheit, supra note 48, at 515–16; Knobbe-Keuk, supra note 40, at 345–50; Alain Hirsch, Discussion, in European Business Law, supra note 31 at 155. Gestri, supra note 61, at 102; Roth, supra note 71, at 200, 201; Werner F. Ebke, The “Real Seat” Doctrine in the Conflict of Corporate Laws, 36 Int’l Law. 1015, 1031 (2003); Tito Ballarino, Les règles de conflit sur les sociétés commerciales à l’épreuve du droit communautaire d’établissement, 92 RCDIP 373, 401 (2003); Michel Menjucq, Liberté d’établissement et rattachement des sociétés: du nouveau dans la continuité de l’arrêt Centros, 2003 La Semaine Juridique [JCP] Ed. Ge´n. II 10032; Lagarde, supra note 86, at 532–33; Jonet, supra note 80, at 36; but see Werlauff, supra note 74, at 4 (discussing a Danish law introduced after Centros). Überseering, C-208/00, at } 36. John Armour, Who Should Make Corporate Law? EC Legislation versus Regulatory Competition, 58 Curr. Leg. Probs. 369, 386 (2005); André O. Westhoff, Verbreitung der Limited mit Sitz in Deutschland, 2006 GmbH-Rundschau [GmbHR] 525; Marco Becht, Colin Mayer & Hannes F. Wagner, Where Do Firms Incorporate? Deregulation and the Cost of Entry, 14 J. Corp. Fin. 241, 248 (2008).

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in a number of countries to attempt to set up an English limited company (with the help of an agent if available) and register a branch office in the host state.99 In some countries, there were nearly insurmountable hurdles. In Greece, the authorities would have required founders to comply with the Greek minimum capital requirement, apparently in ignorance of Inspire Art.100 In Italy, notaries were so concerned about professional responsibility and the consequences of what might be construed as malpractice that they refused their necessary cooperation.101 Nevertheless, English limited companies became more common across the Continent, even if no country matched their popularity in Germany.102 Regulatory competition consequently became a big topic in the growing pan-European body of legal scholarship. A number of articles analyzed the prospects, particularly whether regulatory competition might lead to a destructive race to the bottom by eliminating important protections in corporate law or to a race to the top by eliminating unnecessary paternalism.103 Most authors concluded that the pressures in either direction were not likely to be particularly strong in the European context.104 99

Marco Becht, Luca Enriques & Veronika Korom, Centros and the Cost of Branching, 9 J. Corp. L. Stud. 171 (2009). 100 Id., at 179; but see Ioanna Thoma, ECJ, 5 November 2002, Case C-208/00 Überseering BV v. NCC Nordic Construction Company Baumanagement GmbH, 11 Eur. Rev. Priv. L. 545, 551 (2003) (noting that a pseudo-foreign firm would be treated as a partnership in Greece). 101 Becht et al., Cost of Branching, supra note 99, at 190. 102 Id. at 248 (providing numbers of Limiteds where most director reside outside the United Kingdom). 103 Klaus Heine & Wolfgang Kerber, European Corporate Laws, Regulatory Competition and Path Dependence, 13 Eur. J.L. & Econ. 47 (2002); Eva-Maria Kieninger, The Legal Framework of Regulatory Competition Based on Corporate Mobility: EU and US Compared, 6 German L.J. 741, 765–70 (2004); Luca Enriques, EC Company Law and the Fears of a European Delaware, 15 Eur. Bus. L. Rev. 1259 (2004); Jens C. Dammann, Freedom of Choice in European Corporate Law, 29 Yale J. Int’l L. 477 (2004); Tobias H. Tröger, Choice of Jurisdiction in European Corporate Law – Perspectives of European Corporate Governance, 6 Eur. Bus. Org. L. Rev. 3 (2005); Armour, Who Should Make, supra note 98; Gelter, supra note 47; Christian Kirchner, Richard W. Painter & Wulf A. Kaal, Regulatory Competition in EU Corporate Law after Inspire Art: Unbundling Delaware’s Product for Europe, 2 Eur. Comp. & Fin. L. Rev. 159 (2005); Simon Deakin, Legal Diversity and Regulatory Competition: Which Model for Europe? 4 Eur. L.J. 440 (2006); Marco Ventoruzzo, “CostBased” and “Rules-Based” Regulatory Competition: Markets for Corporate Charters in the U.S. and the E.U., 3 NYU J. L.& Bus.91 (2006); Hanne Søndergaard Birkmose, A ‘Race to the Bottom’ in the EU?, 13 Maastricht J. Eur. & Comp. L. 35 (2006); Seth Chertok, Jurisdictional Competition in the European Community, 27 U. Pa. J. Int’l Econ. L. 465, 506–13 (2006). 104 E.g. Enriques, supra note 103, at 1266–73; Gelter, supra note 47, at 259–64; Tröger, supra note 145, at 23–24; but see Armour, Who Should Make, supra note 98, at 395 (noting that the legal services industry might provided the necessary incentives).

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However, after some reflection, a nuanced discussion on “defensive regulatory competition”105 developed: Member States were not actively competing for incorporations, but trying to discourage their own national entrepreneurs from incorporating abroad, particularly in the United Kingdom. The poster child issue for this is legal capital, or more precisely minimum capital. While the Second Directive requires a minimum capital of €25,000 for public corporations, the minimum capital for private limited liability companies varied widely amongst the Member States, since the Directive does not apply to them.106 The United Kingdom did not require one at all. For, say, a German prospective entrepreneur, this eliminated the necessity to raise €25,000 for a GmbH.107 As early as 2003, France and Spain amended their laws to permit “speedy” incorporations that required fewer formalities and, in the French case, only a nominal minimum capital.108 These reforms may have helped to avoid a migration of incorporations into the English limited company, even though it is not clear whether these legislative innovations were actually motivated by the ECJ case law.109 A 2004 Dutch reform, however, clearly mentioned the ECJ case law as a motivation.110 The most obvious case in point was the German MoMiG of 2008,111 which created the Unternehmergesellschaft (haftungsbeschränkt), a special form of GmbH that does not require a minimum capital, but which must retain all of its profits until the regular minimum capital is reached.112 The same law also addressed some questions of whether creditor protection mechanisms should be formulated as corporate law or insolvency law doctrines, a debate that had been triggered by Inspire Art. The duty to file for insolvency113 – and 105

Armour, Who Should Make, supra note 98, at 394; Luca Enriques & Martin Gelter, Regulatory Competition in European Company Law and Creditor Protection, 7 Eur. Bus. Org. L. Rev. 417, 424 (2006); Luca Enriques & Martin Gelter, How the Old World Encountered the New One: Regulatory Competition and Cooperation in European Corporate and Bankruptcy Law, 81 Tul. L. Rev. 577, 589 (2007); William W. Bratton, Joseph A. McCahery & Erik P.M. Vermeulen, How Does Corporate Mobility Affect Lawmaking? A Comparative Analysis, 57 Am. J. Comp. L. 347, 380–84 (2009); Wolf-Georg Ringe, Corporate Mobility in the European Union – a Flash in the Pan? An Empirical Study on the Success of Lawmaking and Regulatory Competition, 2013 Eur. Comp. & Fin. L. Rev. 230, 243 (2013). 106 107 Supra note 22 and accompanying text. GmbHG § 5(1) (Germany). 108 Kieninger, supra note 103, at 768 (discussing the possibility introduced in 2003 of forming an SARL in France within 24 hours and with a capital of only € 1, as well as the Spanish Sociedad Limitada Nueva Empresa, which was also introduced in 2003). 109 Id. (noting “there is not the slightest hint that the Spanish legislator passed the new legislation in order to take part in charter competition”, and making a similar point for France). 110 Ringe, supra note 105, at 240. 111 Gesetz zur Modernisierung des GmbH-Rechts und zur Bekämpfung von Missbräuchen, 23. Oktober 2008, BGBl. I S. 2026. 112 113 GmbHG § 5a (Germany). InsO § 15a (Germany).

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consequently the liability following from the failure to do so – and the subordination of shareholder loans114 were moved into insolvency law, thus enabling their application to pseudo-foreign firms whose “Center of Main Interest” under the European Insolvency Regulation115 is situated in Germany. “Relabeling” or “insolvencification” of creditor protection doctrines resulted from the ECJ cases as an attempt to apply domestic doctrines to pseudo-foreign firms.116 While it was concluded early on that “offensive” regulatory competition attempting to capture a share of the market for incorporations abroad was unlikely to happen, “defensive” regulatory competition clearly occurred. However, it is less clear whether the known examples have much to do with the reduction of the number of English limited companies rolling over the Continent.117 A recent study by Wolf-Georg Ringe compares the development of the number of “German” and “Austrian” limited company incorporations in the United Kingdom. Interestingly, while Germany reformed its corporate law in reaction to that wave in 2008, Austria did not until 2013 (and even that reform was more cautious). In particular, Austria retained a minimum capital of €35,000, more than in any other jurisdiction.118 One would therefore expect only the number of “German” limited companies to have gone down. However, as Ringe’s data show, they went down in both countries concurrently, namely starting in early 2006. It therefore is very unlikely that the 2008 reform in Germany played much of a role. Ringe mentions a number of other changes in German law, namely case law in the German courts applying German veil-piercing doctrine to English firms, as well as the enforcement of German directors’ disqualification rules.119 These factors seem to better coincide with the timing shown in the data.

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InsO § 39 (Germany). Council Regulation 1346/2000/EC on Insolvency Proceedings, art. 3, 2000 O.J. L. 160/1 implements a version of the real seat theory for bankruptcy law, under which the courts of the country where a debtor’s Center of Main Interests (COMI) is competent to open the main insolvency proceedings. In interpreting whether e.g. the duty to file for insolvency or the liability for failure to do so falls under the EIR, the CJEU would obviously have to apply a supranational functional approach. On “relabeling,” see generally Enriques & Gelter, Old World, supra note 149, at 640–44. See, e.g. Hellwig, supra note 14, at 227 (noting that the MoMiG stopped the English Limited Company in Germany, but it is still in the process of becoming the dominant legal form in the rest of Europe). GmbHG § 6(1) (Austria). This very high amount was somewhat mitigated by the requirement that only €17,500 of cash contributions had to be paid in at the time of registration. GmbHG § 10(1) (Austria). Ringe, supra note 105, at 258; see also Hellwig, supra note 14, at 229 (suggesting that a new doctrinal explanation of veil piercing in Germany as a tort claim allowed the courts to apply it to pseudo-foreign firms).

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Ringe further looks for changes on the supply side (i.e. UK law), which appears to provide the most persuasive explanation. On the other side of the English Channel, he notes an extension of the English directors’ disqualification scheme in the Companies Act 2006 to directors disqualified under foreign law. Additionally, a requirement that at least one director would have to be a natural person (as opposed to another company) was introduced at the same time.120 Most of all, the hidden cost of incorporation in the United Kingdom became apparent during this period, particularly with regard to the annual filing of financial statements.121 The Companies House began to strike many pseudo-English firms from the register as they failed to submit their first mandatory set of accounts, which led to the elimination of a wave of firms set up following Inspire Art in 2006.122 Thus, the English private limited company did not fail as the marketdominant legal form for private companies because of successful defensive regulatory competition, but rather because England was not willing to establish itself as a provider of throwaway entities. The real world thus seems to bear out the prediction that the United Kingdom – a real country with a real economy – would not have the incentives to establish itself as a European Delaware.123 The political clout of the legal profession did not lead to UK Company Law becoming “competitive” in this sense.124

a cautious turn in cartesio Arguably, the approach taken by the Court toward the free movement of corporations became more cautious during the following years.125 In Cartesio (2008), a Hungarian entity wanted to transfer its real seat to Italy while retaining its Hungarian status.126 The Hungarian authorities refused the registration of the transfer, finding that the firm would have to reconstitute itself under Italian law. The ECJ did not consider the problem of what kind of connecting factor to its territory the state of incorporation requires, which is 120 123 124 125

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121 122 Ringe, supra note 105, at 259–60. Companies Act s. 155(1). Id., at 260. Id., at 263. E.g. Tröger, supra note 103, at 47; Gelter, supra note 47, at 263. See Armour, Who Should Make, supra note 98, at 395. Cadbury Schweppes (Cadbury Schweppes plc, Cadbury Schweppes Overseas Ltd v Commissioners of Inland Revenue Case C-196/04, [2006] E.C.R. I-7995) has also been cited as an example. See Ringe, supra note 105, at 233. Cartesio Oktató és Szolgáltató bt., Case C-210/06, [2008] E.C.R. I-9641; but see Veronika Korom & Peter Metzinger, Freedom of Establishment for Companies: the European Court of Justice confirms and refines its Daily Mail decision in the Cartesio Case C-210/06, 2009 Eur. Comp. & Fin. L. Rev. 125, 132–39 (discussing possible misunderstandings resulting from different understandings of “seat”).

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not harmonized by EU law.127 The court returned to its formula that “companies are creatures of national law and exist only by virtue of the national legislation which determines its incorporation and functioning.”128 Contrary to the view of the advocate general, from this it deduced that “a Member State has the power to define both the connecting factor required of a company if it is to be regarded as incorporated under the law of that Member State and, as such, capable of enjoying the right of establishment, and that required if the company is to be able subsequently to maintain that status.”129 However, a Member State must allow its entities to move its real seat away, at least provided they convert to the legal form of another Member State,130 and the new State is, as the VALE case of 2012 states, required to accept corporations that want to come under the fold of its law by way of a conversion into a company registered in the host state.131 But as long as a specific State’s law applies, that State can limit where a company can set up its real seat. As a matter case law development, Cartesio can clearly be reconciled with the Centros trilogy, but as a matter of policy, it is an interesting shift. Prior to the case, many observers thought that the court would abandon the distinction between “immigration cases” such as Centros, Überseering and Inspire Art and “emigration cases” such as Daily Mail, which surprisingly remains good law after the court’s move in Cartesio.132 Many observers expected a different outcome given the court’s trajectory.133 Moreover, Advocate General Maduro recommended in his opinion that the court should find “Articles 43 EC and 48 EC preclude national rules which make it impossible for a company constituted under national law to transfer its operational headquarters to 128 129 130 Cartesio, at }} 58, 108, 109. Id. at } 104. Id. at } 110. Id. at }} 111, 112. VALE Építési kft, Case C-378/10, [2012]. 132 See e.g. Oliver Gutman, Cartesio Oktató és Szolgáltató bt: the ECJ gives its blessings to corporate exit taxes, 2009 Brit. Tax J. 385, 388 (explaining that Centros, Überseering and Inspire Art would not change the outcome of Daily Mail if a similar case came forward today); Vittoria Petronella, The Cross-Border Transfer of the Seat after Cartesio and the Non-Portable Nationality of the Company, 2010 Eur. Bus. L. Rev. 245, 250 (“it confirms the Daily Mail ruling”); Korom & Metzinger, supra note 126, at 147–48. 133 In Lasteyrie de Saillaint, the Court had restricted the exit taxation Member States could impose on individuals. Case C-9/02, Hughes de Lasteyrie du Saillant v Ministère de l’Économie, des Finances et de l’Industrie, 2004 E.C.R. I-2409. Moreover, in SEVIC, the Court had found that Member States had to allow outward-bound mergers with corporations from other Member States. Case C-411/03, SEVIC Systems AG, 2005 E.C.R. I-10805. On this discussion, see Grundmann, supra note 14, § 25 } 35; Carsten Gerner-Beuerle & Michael Schillig, The Mysteries of Freedom of Establishment after Cartesio, 59 Int’l & Comp. L.Q. 303, 306 (2010) (noting that Lasteyrie raised doubts, but was not a clear departure from Daily Mail as it concerned individual taxation). 127 131

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another Member State.”134 The court, led by reporting Judge Christiaan Timmermans – who twenty years earlier announced the death of the real seat theory shortly after Segers135 – managed to reconcile the lines of cases started with Segers and Daily Mail in a very thorough opinion. If the case law on corporations applied to natural persons, the law would now be as if Member States were permitted to decree that its citizens could not take up residence in another EU country while retaining their national citizenship. To move to another state, one would have to renounce one’s citizenship and take up that of the host state, which would be required to grant it, and which the state of origin could not prevent. Contrariwise, Member States would be required to permit citizens of Member States to take residence, irrespective of whether they wish to retain their original citizenship. While such a policy may seem absurd for human beings,136 it may be explicable in the corporate context with the difficulty for a country to police its corporations across the entire Union in ways that are not necessary for natural persons. However, it might be advantageous for a Member State to make its own law available also for activities abroad: for example, a French firm setting up a subsidiary in Romania might want to use a French SARL137 for that purpose, with whose laws the French parent will no doubt be familiar. Nevertheless, not all countries seem to be willing to provide that option.138

the new european discourse in corporate law More than a decade after the Centros triad, and six years after the last important case in that matter, what can we take away from this development? Has the ECJ fundamentally transformed corporate law in Europe? At least one thing is certain: it seems safe to say that Member States have to consider the possibility of flight to other Member States when they attempt to impose a specific policy on newly founded firms. 134 135 136

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Opinion of Advocate General Maduro, Cartesio, Case C-210/06, } 36(4). Supra note 57 and accompanying text. See Gutman, supra note 132, at 390 (explaining that individuals and corporations are different in that the latter first need to satisfy conditions to be regarded as established under national law). Supra note 18. An example would be Austria. See GmbHG § 5(2) [Austria] (requiring that the seat most be identical to the place of the firm’s central office or place of business, and that deviations are only permissible for exceptional reasons). This provision was interestingly introduced with this wording only in 2005, apparently because of concerns of differing regional sets of practices within Austria that the enabled some forum shopping within the country. By contrast, Germany abolished this requirement with the MoMiG of 2008. See GmbHG § 4a (Germany).

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In part as a consequence of a generally stronger international orientation in legal scholarship combined with the effects of the internationalization of capital markets and corporate governance practices,139 corporate law has become a much more international field, both in terms of practice and academic discourse. Today there are a number of journals that specifically deal with European and comparative corporate law,140 and academic books on corporate law with a pan-European readership are published on a regular basis. The transnational discussion, infused with a healthy dose of law and economics, has become more sophisticated compared to the 1990s, when comparative research tended to be more descriptive and was typically limited to country reports on specific legal issues. While not the main cause, the development of corporate law may have contributed to this development At the height of the discussion about Centros, Halbhuber provocatively suggested that the German legal profession as well as German law professors were defending the real seat theory to protect their home turf, namely their prerogative to consult on German corporate law, in the case of academics, in the form of lucrative legal opinions.141 Clearly, that business has not moved to UK law firms or English academics, and it would not have gone away if the most marginal of firms had continued to flock to the Companies House in Cardiff. To the contrary, Continental Europeans have colonized the United Kingdom: almost every law school in the United Kingdom has at least one German and one Italian on their faculty, which adds to a smattering of other Continental Europeans.142 Of course not all, but a number of them work in corporate law. Moreover, a group of Continental European academics and lawyers (some of them based at UK faculties) has published a German-style

139

On convergence in corporate governance, see e.g. Henry Hansmann & Reinier Kraakman, The End of History for Corporate Law, 89 Geo. L.J. 439 (2001); Jeffrey N. Gordon & Mark J. Roe (eds.), Convergence and Persistence in Corporate Governance (2004); Mathias M. Siems, Convergence in Shareholder Law (2008). 140 This includes the European Business Organization Law Review (started in 2000), the Journal of Corporate Law Studies (2001), the European Company and Financial Law Review (2004) and European Company Law (2004). 141 Halbhuber, supra note 51, at 1412–14; but see Wienand Meilicke, Die Niederlassungsfreiheit nach “Überseering,” 94 GmbH-Rundschau 793, 798 (2003) (suggesting that the introduction of parity codetermination in 1976 as the reason for the popularity on the real seat theory); see also Enriques, supra note 13, at 58–64 (explaining the interest of legal academics and lawyers in harmonizing company law on the EU level). 142 See the list of German academics at UK law faculties compiled by Mathias Siems, at https:// web.archive.org/web/20130611053408/http:/siemslegal.blogspot.com/2013/06/germans-in-uklaw-schools-updated.html (accessed December 6, 2016).

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commentary on the Companies Act of 2006 in the German language, thus establishing UK Company Law within the turf of German academia.143

the ecj’s accidental vision for corporate law With respect to the actual subject matter, the entire line of cases exposes the inherently political character of the ECJ’s mandate in corporate law, but particularly Centros and Inspire Art. In both cases, the core issue was clearly capital regulation. Continental European countries traditionally relied on an intricate doctrinal system based on minimum capital and capital maintenance provisions that was enforced with a varying degree of seriousness. In both cases, the national legislation was intended to prevent a circumvention of minimum capital by using an English type of business organization that was not subject to the Second Directive. In both cases, the intention was to shield an ex ante creditor protection system from circumvention. While there are many, maybe overwhelming, arguments against legal capital, the court avoided a deep policy discussion and, in a rather simplistic manner, applied its Gebhardt144 test. Thus, national measures hindering or making less attractive the exercise of the freedoms “must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the public interest; they must be suitable for securing the attainment of the objective which they pursue, and they must not go beyond what is necessary in order to attain it.”145 In applying these criteria, the Court inevitably engaged in a superficial policy analysis, most of all with respect to the suitability of national measures for attaining the objective, and whether it is possible to find a less restrictive mechanism. First, as to suitability, the Court found that creditors are on notice that they are dealing with a company governed by the law of England and Wales instead of Danish law.146 Second, regarding restrictiveness, the Centros court states that other mechanisms could be implemented, e.g. by “making it possible for public creditors to obtain the necessary guarantees”.147 In other words, the Court assumes that creditors are informed and capable of selfprotection. In policy debates on creditor protection, it is usually pointed out 143

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Alexander Schall (ed), Companies Act Kommentar (2014), with contributions by Walter Doralt, David Günther, Veronika Korom, Michael Lamsa, Wolf-Georg Ringe, Mathias Siems, Michael Stöber, Christoph Thole and Christoph Wiegand. Reinhard Gebhard v Consiglio dell’Ordine degli Avvocati e Procuratori di Milano, Case C-55/ 94, [1995] E.C.R. 4165. Centros, C-212/97, at } 34; Inspire Art, C-167/01, at } 133. 147 Id., } 36; Inspire Art, id., } 135. Centros, id., } 37.

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that only so-called “adjusting” creditors have this capability and can e.g. withhold credit, ask for securities, or adjust interest rates to risk.148 While the Court seems to be somewhat concerned with public creditors, such as tax authorities, which typically have strong enforcement capabilities, it overlooks other creditors, such as tort creditors, as well as potential unsophisticated contract creditors. While it is debatable the extent to which creditor protection is desirable, the court, in the guise of doctrinal analysis, takes a clear position against paternalism. Ultimately, it refers Member States to “appropriate measures for preventing or penalizing fraud, either in relation to the company itself . . . or in relation to its members, where it has been established that they are in fact attempting, by means of the formation of the company, to evade their obligation toward private or public creditors”.149 So far, no case has clarified what kind of mechanisms would pass muster under this test. However, it appears that the vision toward which the court has thus nudged the Member States is characterized by two elements. First, creditors (and possibly other parties) interacting with a firm cannot, as a first approximation, expect uniform protection that applies to an entire set of companies, such as legal capital or the liability provisions in the Dutch law scrutinized in Inspire Art. They are thus expected to rely on information they receive and to process it accordingly. To what extent creditors in fact have this capability is widely debated in the literature, which the ECJ conveniently ignores. This self-protection model is certainly a change in culture for paternalistic Continental European models that tend to rely on an assumption of bounded rationality.150 Second, the court is pushing Member States from an ex ante to an ex post approach that largely corresponds to the distinction between rules and standards.151 It is thought that the court would not object to measures imposed ex post in an individualized fashion, such as criminal penalties or veil piercing, or possibly bankruptcy doctrines holding directors liable by continuing to operate a company putting creditors further at risk.152 148

See e.g. John Armour, Legal Capital: An Outdated Concept?, 7 Eur. Bus. Org. L. Rev. 5, 11 (2006). 149 Centros, C-212/97, at } 38. 150 Günter H. Roth & Peter Kindler, The Spirit of Corporate Law 30–31 (2013). 151 On the distinction see generally Louis Kaplow, Rules Versus Standards: An Economic Analysis, 42 Duke L.J. 557 (1992). 152 See, e.g. Erik Werlauff, The Consequences of the Centros Decision: Ends and Means in the Protection of Public Interests, 2000 Eur. Tax. 542, 545; de Kluiver, supra note 89, at 131–32. For the distinction between ex ante and ex post strategies, see e.g. Federico M. Mucciarelli, The Function of Corporate Law and the Effects of Reincorporations in the U.S. and the EU, 20 Tul. J, Int’l & Comp. L. 421, 447–48 (2012). “Relabeled” corporate law doctrines that were

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Whatever one thinks about the questionable benefits of legal capital as a creditor protection mechanism,153 ex ante mechanisms are not ineffective by necessity. A Member State might abolish legal capital and instead require Private Limited Companies to take out insurance to satisfy tort creditors in insolvency. Yet, it is very unlikely that the court would permit Member States to apply such a requirement to pseudo-foreign corporations. It is true, of course, that the legal capital system cannot be entirely characterized as standard-based.154 However, veil piercing – the ultimate private law strategy that would likely survive the ECJ’s scrutiny, as it applies on an individualized basis – relies entirely on an ex post assessment by the Court about whether it would be equitable for limited liability to be respected. This is not to say that veil piercing doctrine has developed on the Continent as a result of Centros and Inspire Art, but the Court has done its best to push Member States toward greater reliance on mechanisms such as this one. Again, the Court does not consider the advantages and disadvantages of either legal strategy, each of which may be more or less desirable depending on the circumstances.

conclusion: corporate law visionaries and the court’s accidental vision for corporate law In the end, the impact of Centros has been relatively small. Full-scale regulatory competition has not arrived in Europe, in part – as several scholars predicted in the early 2000s – because no Member State developed strong

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transferred to insolvency law would, however, still likely be considered impermissible restrictions of the freedom of establishment by the Court, at least if they do not fall under the European Insolvency Regulation. See Enriques & Gelter, supra note 105, at 640–44. For criticism see, e.g. John Armour, Share Capital and Creditor Protection: Efficient Rules for a Modern Company Law, 63 Mod. L. Rev. 355, 371–72 (2000); Luca Enriques & Jonathan R. Macey, Creditors versus Capital Formation: The Case Against the European Legal Capital Rules, 86 Cornell L. Rev. 1165 (2001); Peter O. Mülbert & Max Birke, Legal Capital – Is There a Case against the European Legal Capital Rules?, 3 Eur. Bus. Org. L. Rev. 695, 732 (2002); Jonathan Rickford (ed.), Reforming Capital: Report of the Interdisciplinary Group on Capital Maintenance, 2004 Eur. Bus. L. Rev. 919; Bayless Manning & James J. Hanks, Legal Capital (4th ed. 2013) The “concealed distributions” doctrine, which is an important element of legal capital in the German-speaking countries, is largely standard-based, since it requires an ex post assessment about whether a transaction’s terms were at arm’s length. See, e.g. Holger Fleischer, Disguised Distributions and Capital Maintenance in European Company Law, in Legal Capital in Europe 94, 95–98 (2006); Roth & Kindler, supra note 150 at 58–61. The United Kingdom has developed a similar doctrine in some cases. See Thomas Bachner, Creditor Protection in Private Companies 97–115 (2009) (comparing UK and German law).

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incentives to provide a “popular” legal form for the entire union. The main accomplishment of regulatory competition at this point is the erosion of legal capital, or more precisely minimum capital, as other elements of the legal capital system have remained largely in place. While this is an important issue for small, typically newly founded firms, it is largely irrelevant for the large firms that are the primary subject of the convergence debate. However, it is indeed an element of a larger trend in corporate law as well as in other fields that reflects Anglo-Saxon modes of business regulation more than Continental European ones. Did the Court intend this result? It is unlikely, given its relatively limited understanding of business law policies. However, we can see the outline of an interesting story that spans five decades, beginning with European visionaries hoping to open up a market for corporations while taming it with harmonization. It continues with a failed harmonization project that results in the retrenchment of corporate law policymakers and academics on their home turfs, seeking to protect national corporate laws from a Delaware effect with the real seat theory. A fluke case poses a mild threat in 1986, as it is interpreted by a future ECJ judge as overruling the real seat theory, but it is swiftly repudiated by the mainstream when a plenary decision seemingly reaffirms the theory’s compatibility with the Treaty less than two years later. From 1999 to 2003, the Court uses a move out of the internal market playbook to put its largely accidental vision for corporate law in place. Finally, under the leadership of the same judge, in 2008 the Court reconciles the case law by putting a distinction between “incoming” and “outgoing” cases in place that seems to perfectly explain the conflicting cases of the 1980s. Even if the Court’s vision for corporate law was accidental, a certain vision for the freedom of establishment of companies has been put into place.

acknowledgements For helpful comments I thank Georg Eckert and Roger Goebel as well as participants of the EU Law Stories conference.

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18 The Pyrrhic Victory of Mr. Francovich and the Principle of State Liability in the Italian Context antonio bartolini and angela guerrieri 1

introduction More than twenty years have passed since Francovich made its mark on the European legal scene. This case was comparable in importance to landmark decisions of the European Court of Justice (ECJ) such as Van Gend en Loos2 or Simmenthal3 given its implications in terms of jurisprudence for the European system as a whole. Since judgment C 6–90 on 19 November 1991, the principle of “state liability” has become a preeminent part of the substrate of acquis communautaire, marking an important milestone not only on the path toward individuals’ effective protection but also European integration in general. The enforcement of European legislation in the Member States, as well as the protection of private parties according to the rights conferred on them by EU treaties, achieved a definitive breakthrough in Francovich, which, although foreshadowed by precedents referred to by the parties and the Court, has still brought with it a considerable acceleration of the process. One of our goals is to try to answer whether the principles we are going to present have been the base for an “objective”4 safeguarding of the EU legal order, and the upholding of the law tout court or, conversely, the base for the 1

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The paper is the result of the combined studies and reflections of Professor Bartolini, full Professor of Administrative Law at the University of Perugia- and Angela Guerrieri, PhD candidate at the University of Perugia; Prof. Bartolini has contributed sections 1 and 6; Angela Guerrieri sections 2 to 5. Judgment of the Court of 5 February 1963. - NV Algemene Transport - en Expeditie Onderneming van Gend & Loos v. Netherlands Inland Revenue Administration. Case 26–62 [1963] ECR 3. Judgment of the Court of 5 March 1980. - Simmenthal S.p.A. v. Commission of the European Communities. Case C-243/78. [1980] ECR 593. By “objective” safeguarding we mean the will to protect, first of all, the European legal system in itself rather than (“subjective” perspective) the rights of single citizens.

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protection of individuals.5 In doing this, however, the chapter takes a different viewpoint from previous studies. In going deeper on the narration of facts and showing the general “atmosphere” of Italian legal context at the time, the authors examine the path taken to reach the affirmation of the principles that have been promoted since Francovich and the consequences that have resulted on a practical level. In going beyond the issue of the current application of the state liability doctrine, we question the effectiveness of the protection of individuals’ rights offered today in the European context. To this end, our chapter uses a factual methodology and relies on the analysis of the Italian legal context, both among scholars of the legal bar and the judges at the time of Francovich, and the juridical basis on which the protagonists in this European case operated.

the origins of the case: how mr. francovich arrived at the ecj These important developments can be traced back to 31 January 1985, when Mr. Francovich, a former employee at an electronics company based in Vicenza (in the industrialized region of Veneto, in the north of Italy), obtained a decision against his employer from the industrial tribunal in Vicenza (Labour section) for the compensation of amounts payable to the applicant – that had only partly been paid – by reason of the employment relationship that ended in April 1984. The company, however, did not settle the sum due to Mr. Francovich. Therefore, in 1989, he contacted attorneys Claudio Mondin, Aldo Campesan and Alberto Dal Ferro to represent him before the civil courts for an appeal.6 The attorneys employed by Mr. Francovich were well aware of the details, given that the case – far from being just a domestic question – involved the European institutions, namely the Court of Justice. Based on this knowledge,7 they immediately decided on the defensive line for their client. In our interview with Campesan and Dal Ferro in Vicenza, the attorneys told us that this defensive line was designed to involve EU principles from the very beginning, and they immediately noted that “there are times when 5

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Indeed, private parties are entities that today, in the EU legal system, have (more so than in the past) an autonomous relevance. As is known, the original and primary purpose, which aimed to create the European Union (beginning with the Coal and Steel Community established by the Treaty of Paris in 1951 and then CEE with the Treaty of Rome in 1957), was to safeguard and expand the internal market. Interview with Mr. A. Campesan and Mr. A. Dal Ferro, attorneys for Mr. Francovich, in Vicenza, Italy (March 2014). We focus in the following paragraphs on their knowledge of EU principles and how they acquired it.

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European judges limit themselves to being ‘notaries’, and take note of certain events; yet there are also others, in which they feel a deep urge towards the development of new principles: we were well aware that the latter was the case at that juncture, and that it could be turned to our favour.”8 So, starting from this awareness, Francovich’s attorneys brought the case before the national civil court with an application lodged on 19 April 1989 at the District Court of Vicenza with the stated goal, as declared by the attorneys, of launching a preliminary ruling proceeding before the ECJ. In other words, this was a sort of “fictio litis”9 for the recurrent to immediately remand the case to the European Court, having to first pass through the Italian domestic judicial system. The legal basis upon which the lawyers planned to reach the Court will be dealt with later in this chapter. Despite the apparent openness toward EU law and its judiciary, as confirmed by the lawyers involved in the litigation, the Italian judicial system of the early 1990s10 was less accustomed to the modus operandi of the preliminary ruling. In fact, the industrial tribunal responsible for the case appeared rather reluctant to sign the order for reference,11 revealing an 8

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Similarly, also G. F. Mancini, one of the ECJ judges in the Francovich case, wrote: “The Cassis de Dijon sentence, in 1979, probably constituted the swan song of the old activist Court, which had produced sentences such as Van Gend en Loos and Costa. The eighties did not produce any judgment of comparable calibre. In the early nineties however, the Court appeared to recover. Some controversial judgments (Chernobyl, Factortame, Francovich) led many observers to believe that a new phase of activism was beginning,” in Mancini, G. F., Democrazia E Costituzionalismo Nell’Unione Europea. Bologna: Il Mulino, 2004. 282. See also D. Tamm, The History of the Court of justice of the European Union since its Origin, in The Court of Justice and the construction of Europe: Analyses and Perspectives on Sixty years of case-law, Published by the Court of Justice of the European Union on the occasion of its 60th anniversary, 2013, p. 31. In the Italian doctrine, fictio litis can be considered as a claim before an internal judge that is predestined to reach the Constitutional Court and, as this case, the ECJ. Data, which can be consulted in the EU Official Journal, show that the number of references for a preliminary ruling to ECJ from Italian judges has always been very high numerically (especially since 1990). However, there has been a high percentage (almost one-third of the total) of decisions of inadmissibility by the ECJ, probably due to an inadequate knowledge of information that must be provided in the reference for the preliminary ruling (see, for example, the EU Official Journal referred to the number of references in the years 1989–90 at: http:// curia.europa.eu/jcms/upload/docs/application/pdf/2008-12/1990_2008-12–23_14-21–40_211.pdf). At this end, the recent study of R. Daniel Kelemen and Tommaso Pavone, “Mapping EU Law” (paper presented at the Biennial Meeting of the European Union Studies Association, Boston, MA, 5–7 March 2015), shows the spatial distribution of Preliminary references among Italian tribunals since 1964. Moreover, the attorneys recounted how they had drawn up the ordinance in question in draft form, and handed it over to the industrial tribunal of Vicenza, to offer a template from which to “draw inspiration.” Indeed, on viewing both the draft prepared by the lawyers and the subsequent order of remission at the Court of Justice, it is clear that they are almost identical.

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unconcealed “skepticism” towards the European remedy. Additionally, the system of communication between the Courts appeared somewhat lacking. For example, the Italian Tribunal initially sent the preliminary reference to Strasbourg12 from Rome (where it arrived from Vicenza) and was only redirected to the correct recipient, based in Luxembourg, thanks to the initiative of an astute postman.13 This particular trait of the Italian tribunals at the time,14 which seemed more reluctant to accept the European legal order as a new judicial system than their European equivalents, emerges also in the appendix to the “first training course on EU Law for judges” (held in Urbino, Italy, in September 1993), where Giovanni Conso15 underlined a clear cultural gap in this field. In particular, Conso stated that “Italian judges have committed an error of perspective and they have revealed resistance towards the communitarian phenomenon, caused by a sort of judiciary chauvinism and by a lack of education in EU law: then by a narrow vision.”16 The awareness among Italian scholars and lawyers that their judicial system was not fully aware of the revolution created by the European law resulted in fundamental changes in the Italian legal training. For instance, by 1997, European Community (EC) law became part of the examination program to become an “ordinary” judge in Italy.17

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This illustrates, once again, that certain Italian courts were not in the habit of dealing with the legal instrument of reference at the time of Francovich. Where, as is well known, the European Court of Human Rights is based! Interview with Mr. A. Campesan and Mr. A. Dal Ferro, attorneys for Mr. Francovich, in Vicenza, Italy (March 2014). For a major study about the use of preliminary reference procedure among Italian tribunals, see Reale, Maria Cristina and Marco Borraccetti, Da Giudice a Giudice: Il Dialogo Tra Giudice Italiano E Corte Di Giustizia Delle Comunità Europee. Milano: Giuffrè, 2008. Italian Professor of Criminal Procedure, former Minister of Justice and Head of Italian Constitutional Court. Giovanni Conso, Introduzione, in Jacopini, Bianca. Diritto Comunitario E Diritto Interno: Il Ruolo Del Giudice Europeo: Urbino 19–21 Settembre 1993: 1. Corso Di Formazione in Diritto Comunitario per Magistrati. S.l.: S.n., 1994. In the same study he adds: “[T]he (Italian) judge perceives the Community law as extraneous and, because of this, the entrance of Community legislation into national law is not seen as a factor of integration but as a factor of conflict between two legal systems. The judge tends, therefore, to reject, almost instinctively, the Community rules, seeing them as extraneous to his world, even threatening to his consolidated, but restricted legal preparation.” Id. at 13. Also of interest from this perspective is a paper by the Italian CSM (Consiglio Superiore della Magistratura) that gathers the works of a seminar held in Chianciano (Tuscany) on the topic of “Community law and national law,” in 1987, available at www.csm.it/quaderni/quad_11.pdf. Otherwise, since 1983 we have had the same exam subjects become judges of the Consiglio di Stato, the Supreme Court in the administrative jurisdiction.

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the facts and the case The appeal n. 1186/89 before the industrial tribunal of Vicenza was based on directive 80/987,18 which guarantees the coverage of pay claims for employees in the event of the insolvency of their employer.19 Mr. Francovich was owed 6 million Lire20 from his employer, and while the Directive should have been implemented by 1983, five years later he had still been paid nothing, as the company liquidators informed him there was no money left after the bankruptcy distribution. Thus, because the Directive was not implemented in Italian legislation, Mr. Francovich could not enjoy the protection that Community law, and the particular Directive, was intended to provide for him. Mr. Francovich’s lawyers’ legal strategy was to sue the Italian State, claiming that it was liable to pay him the sum he would have obtained had the Directive been in force. On this question, the Italian Court of Vicenza sought a preliminary ruling before the ECJ under Article 234 [177] EC. Questioning primarily if the Directive can be implemented, even in the absence of transposing provisions in the Italian legal system, one may request to have a case heard at the ECJ, which will operate as the interpreter of EU principles on the subject, and answer the questions raised in this case. The attorneys then decided to present their case, having already decided from the outset that the goal was to reach the EU Court of Justice. They knew from their own knowledge of EU principles – built both during university years spent in Padova and during their practice as lawyers – that the basic question to put before the Court of Justice regarded, above all, the system of community enforcement as a whole: namely, “can continuous and prolonged non-compliance by a Member State with regard to EU directives be left free from any effect against private parties or conversely, can they hope to enforce their claims, even when a directive is not in itself self-executing and, therefore, directly be claimed?”21 On the one hand, Mr. Francovich’s lawyers leveraged the need for Member State compliance with Community obligations in a moment in history when 18

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Directive 2008/94/EC of the European Parliament and of the Council on the Protection of Employees in the Event of the Insolvency of their Employer. EU Member States were expected to enact provisions in their national law to give a minimum level insurance for employees who had outstanding unpaid wages, if their employers were insolvent. The equivalent of which is about €3,100. Interview with Mr. A. Campesan and Mr. A. Dal Ferro, attorneys for Mr. Francovich, in Vicenza, Italy (March 2014).

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non-implementation of EC directives was particularly pressing and urgent;22 on the other hand, they focused on the scope of the institution – the Court of Justice – which would perhaps risk losing relevance if it failed to enforce any measures in favour of private individuals, given the prolonged lack of compliance of the States. Both legal strategies emerged from the lawyers’ interview. The question posed by attorney Campesan, and to which he referred us,23 reflects such approach: Is there a limit within which the arbitrariness of a Member State, which in any case is not permissible, can be contained? Can community legal order remain indifferent when faced with actions brought by those who, without proper reason, have suffered prejudice because of the default of member State? . . . Can the community legal order allow and justify a situation, an unlawful situation, to crystalize in time, forbearing to restore legality, without by so doing placing in doubt the very binding nature of the directive?

The Italian attorneys focused their closing statement on the role of Community jurisprudence and its absolute importance in guaranteeing the effectiveness of Community law: only the ECJ – by recognizing the direct or indirect liability of a Member State – they said, is in position to ensure, albeit a posteriori, the Directive’s intended result. Inside the words of the lawyers we can notice a sort of “challenge”24 brought from them to the Court in order to firmly affirm its importance and its power to “punish” Member States; one may be led to believe that the final decision is also an answer given by the judges in this perspective, with a will to restate their importance. In brief, as is well known, the European Court of Justice decided that the Italian government breached its obligations, and was liable to compensate the workers for any losses resulting from the breach. At a general level, the Court further held that the damages for such breaches should be available before national courts. To establish state liability for failure to 22

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In particular, Italy has always been one of the worst EU countries in implementing and transposing EU Directives (especially before “La Pergola” law, n. 89/1989, which has introduced the “Annual Community Law”, to transpose annually EU Directives in the Italian legal system). Still, nowadays the number of infringement procedures for Italy, due to delays in transposing Directives, is one of the highest in Europe. For an exact vision of this, see http:// eurinfra.politichecomunitarie.it/ElencoAreaLibera.aspx. This information was included in the draft copy of the lawyers’ closing statement, which was expressed before the Court of Justice. The lawyers graciously shared the draft copy of their closing statement with us. The lawyers used this exact expression.

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implement a directive, claimants must prove first that the Directive conferred specific rights on them (identifiable in its wording), and second a causal link between the State’s failure to implement the directive and the loss suffered.25 These requirements for claimants have been the starting point for a subsequent, important debate, both among European jurisprudence26 and national legal scholars. To fully understand the reasons that led to this judgment, it is also important to consider the Court that made the decision, approaching the judges who composed it. These proceedings were heard in front of a bench composed of eleven judges from different States – a lively group that (looking at the principles then expressed with Francovich) was particularly open to innovation. These judges undoubtedly had the protection of the private individual in mind where the individual was devoid of any form of relief, but even more so, the judges probably wished to create a new form of enforcement of Community obligations while simultaneously reaffirming the potency of European judges, even in such cases. Of particular note among the Court of Justice judges that heard the Francovich case was the Italian judge Giuseppe Federico Mancini, who had been a member of the ECJ since 1982, first as attorney general and then, from 1988, for seven years, as a judge.27 Mancini was also an internationally renowned expert in labour law,28 and in his books dedicated to labour law and social rights in Europe he established his will to promote a vision of Europe in the direction of a Community more focused on the safeguards of workers social rights.29

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Attention should be paid, however, to a precedent case in the ECJ jurisprudence in which the judges affirmed for the first time the principle of Member State liability. The judgment of the Court of 16 December 1960 – Humblet v. Belgian State. Case C-6/60. [1960] ECR 1125, } 37 (stating that “Community law imposes the principle according to which Member States are obliged to pay damages caused to individuals by breaches of Community law attributable to the States”). The debate among the Court of Justice has resulted in important judgments, already quoted, such as Brasserie du Pêcheur, Köbler and more. Among the ECJ judgments issued when Mancini was a judge of the Court, we can remember: Seymour-Smith e Perez C-167/97, Europièces C-399/96 and Dethier Équipement C-319/94; Dietz, C-435/93, to name a few. Often, as in the cases just quoted, he was judge-rapporteur in questions related to social politics, rights of workers and labour law in a European domain. Mancini has been a renowned Professor of Labour Law in the University of Urbino, Bologna and Roma La Sapienza. See G. F. Mancini, Principi fondamentali di diritto del lavoro nell’ordinamento delle Comunità europee, in Aa.Vv., Il lavoro nel diritto comunitario e l’ordinamento italiano, Padova, 1988. In this work we can read Mancini’s well-known expression “social frigidity” with reference to EU at that time and its welfare politics.

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More generally, this was also another way to promote European integration and democratization: he was a committed pro-Europe judge, well aware of being in a moment of big transformations inside European institutions and the European Community as a whole.30 Neither in EU documents currently available nor in previous Francovich studies does Mancini appear to have been particularly dominant. In addition, the accounts of the time do not attest to him having any great participation in the case. In reality, in the opinion of Mr. Francovich’s attorneys, Mancini definitely played an active role “behind the scenes,” and was a driving force in the affair. This should hardly have been surprising. It is enough to read some of his best-known writings31 on the law and the rights of the European Union to realize how Francovich is also the expression of his vision of Europe and his will of integration. Mancini considered the Court of Justice as a means of promoting democracy in the EU, ensuring, as much as possible, respect for the position of the individual. In one of his many papers Mancini asked: “What European citizen has not been touched in some way by some positive ruling by the European Court in Luxembourg? As long as the Court continues to issue rulings that allow men and women to enjoy the fruits of integration, it will continue to demonstrate its worth.” Reading Mancini’s studies dedicated to labour law, social rights in Europe and so on, one notes the same spirit: his will to promote, especially in a case such as Francovich involving workers and a Directive for their protection, a vision of Europe in the direction of a welfare community that established safeguards for social rights.

the gap between the italian scholarly and legal education in the reception of ec law at the time of francovich As we noted in this chapter, at the time of Francovich, less than a majority of Italian judges were accustomed to the ECJ and effectively used the remedies provided by European Treaties.32 Such lack of legal skills went hand in hand 30

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In this sense, and to understand his whole opinion concerning EU law, one can read his interview reported in RIDL (Italian Review of Labour Law), I, 1993, p. 184. Those works related to EU law have been collected into: Giuseppe Federico Mancini’s book, Democrazia E Costituzionalismo Nell’Unione Europea. Bologna: Il Mulino, 2004, 245 (English version: Democracy and Constitutionalism in the European Union – Collected Essays, Oxford & Portland, OR, 2000). See the R. D. Kelemen and T. Pavone work (footnote n. 10), which compares the tribunals in different Italian provinces (local government subdivision), showing where the references for preliminary ruling were a more widespread tool and where it was substantially unknown.

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with legal education and the training for lawyers offered as undergraduate legal education in public universities throughout Italy. This perspective helps to illustrate how important principles were laid down in the Francovich trial, and the general “atmosphere” in Italy regarding EU law and its study. First, both Mr. Francovich’s attorneys,33 Campesan and Dal Ferro, graduated in Padua in the mid-1980s and owed their knowledge of European Union Law to their progressive education. In particular, their professor of EU law at the University of Padua was Paolo Gori, who for years was a referendaire34 to the ECJ with Judge Alberto Trabucchi, another well-known Italian professor of civil law also at the University of Padua. Moreover, Gori was referendaire at the time of historical judgments, such as Van Gend en Loos, and he followed step by step (as we can read in many documents and academic works he wrote)35 the path towards the affirmation of European integration, so we can suppose a great knowledge of EU principles and passion in his academic teaching. We must emphasize that the study of European Law was far from common in Italian law faculties at the time, and it was not necessary to study European institutions, how they operate, the fundamental principles involved and so on prior to graduation. In the case of Campesan and Dal Ferro, they frequented a complementary course in European Law, provided by the University of Padua,36 and presented

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As stated at the beginning of the chapter, Francovich actually had three attorneys: C. Mondin, A. Campesan and A. Dal Ferro. We had the opportunity to interview Campesan and Dal Ferro, so the information reported refers to them. He was referendaire of Alberto Trabucchi, a judge of the ECJ and renowned Professor of Private Law in Italy, University of Padua. Moreover, the name of Alberto Trabucchi, as judge of Court of Justice, is linked to one of the most important leading cases in EU jurisprudence: Van Gend en Loos, which has introduced the principle of direct effect of EU law. We can imagine a sort of “continuation” in this path of enforcement of EU law between those different-periods protagonists. For a general discussion of the life and legal scholarship of Alberto Trabucchi, see P. Gori, Quindici anni insieme ad Alberto Trabucchi alla Corte de Guistizia delle CE, in La formazione del diritto europeo. Giornata di studio per Alberto Trabucchi nel centenario della nascita, Padova, 2008, p. 71–83; id Perini G., Alberto Trabucchi giurista europeo. Alle radici del diritto in Europa: una testimonianza inedita, p.145. For a review of Van Gend en Loos judgment, written by P. Gori himself, see P. Gori, Una pietra miliare nell’affermazione del diritto europeo, nota alla sentenza della Corte di Giustizia delle Comunità europee del 5 febbraio 1963 causa n. 26/62, in Giur. It., 1963, IV, p. 53. Another of Gori’s work that is useful to understand his thought about Europe is P. Gori, La preminenza del diritto della Comunità Europea sul diritto interno degli stati membri, in nota alla sentenza della Corte di Giustizia delle Comunità europee del 15 luglio 1964 - causa n. 6/64, in Giur. It., 1964, I, p. 1073. See the previous footnote. This was one of the universities in Italy that provided, at that time, this complementary course in the study programme.

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their final thesis in this field; in part, we can link to this their solid knowledge of principles then expressed in the acts presented to the ECJ. As already stated, this knowledge was exceptionally rare for this period in Italy. Perhaps this is due to the fact that the lawyers interviewed were rather young (Campesan was only a lawyer trainee when the case began) and therefore were more conscious of the inclusion of European principles in their study program. This is not a secondary issue for the development of Francovich story. In general, however, Italian law students and lawyers, in comparison to their colleagues in other European countries, had less opportunity to learn about European Law in the early 1990s. Indeed, Community law only became a compulsory subject in law faculties in the mid-1990s, following a decree of the Italian Ministry of University and Scientific Research of 1994, which recognized the necessity to modify the teaching plan in law faculties by inserting the study of EU Law. Each Italian university adapted to the new system37 between 1995 and 2000. Italy’s adaptation to the new system was delayed compared to the adaptation of other European countries. In France, for instance, “Community Law” became a core subject in the third year of licence since the Arrête of 7 July 1977 – concerning Licence and Maitrise en Droit. Germany’s transition came even earlier;38 since the beginning of 1960s, European law began to be taught at a growing number of German universities: several different lecture and seminar courses under the rubric of “European Law” were held during the 1965–66 university semester.39 Even today, European Law is not a compulsory subject in the examination to become a lawyer and enter the professional order for Italian attorneys, so it remains an individual choice to study the matter further. Despite the described level of the judiciary and of the general knowledge of EU law in Italian universities, the national scholar since the 1970s has played a pioneering role in the study of the new legal issues that have arisen in the context of European integration.40 Italian scholars – initially from other

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Just to give an example, at the University of Rome “La Sapienza” (one of the biggest Universities in Italy), the teaching of the “Law of the European Communities” has only became mandatory in the 2000–01 academic year. Specifically about Germany see B. Davies, Resisting the European Court of Justice, West Germany’s Confrontation with European Law, 1949–1979, Cambridge University Press, 2012, p. 64. This element is reported by H. Mosler, Begriff und Gegestand des Europarechts, Zeitschrift fur auslandisches offentliches Recht un Volkerrecht (1968), p. 482. It is also worth bearing in mind that the European University Institute was established in Florence in the 1970s.

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branches of the law, especially international law – have made important contributions to a whole host of issues, ranging from mixed administrative proceedings and composite administrations at the EU level, to the nature and role of European agencies, to the comitology process, to the various forms of legal integration between different levels of legal order not to mention the issues relating to the constitutional basis of European law and human rights. At the beginning, the major studies were devoted, especially in the first period of the formation of the European Community,41 to the legal nature of the CECA, as well as the Court of Justice; this classification was considered more important in comparison with the examination of the institutional innovations.42 In a second phase, through some major scholars such as Benedetto Conforti43 and Antonio Tizzano,44 the focus shifted towards the process of integration between European law and domestic law. This context saw several references to the importance of Community law and its “expansive force” to protect the European citizen. Moreover, the scientific reflection on many of these issues started with the discussion of the decisions of the Court of Justice, which was considered the real engine in the construction of autonomous Community law (different from both international and internal law). In this sense, scholars immediately realized the extraordinary impact the “postulates” of some still important judgments, such as Van Gend en Loos, Costa v. Enel and Les Verts, would have. Since then, the debate surrounding referrals for a preliminary ruling and the dialogue between national courts and the EU Court have become absolutely central. Thanks also to the propulsive role of the doctrine and its analysis of fundamental principles, there was a more rapid process of “constitutionalization” of 41 42

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We are referring to the 1960s and 1970s. For a major reflection in this field, see F. Salerno, L’affermazione del positivismo giuridico nella scuola internazionalistica italiana: il ruolo di Anzillotti e Perassi, in Rivista di diritto internazionale, 2012, p. 29. See also, G. Caggiano, La Dottrina Italiana Nella Fase Costituente Dell’ordinamento Giuridico Comunitario in Studi Sull’integrazione Europea VIII, 2013, p. 441. Among B. Conforti’s most important monographic works are: B. Conforti, Diritto internazionale, Napoli, Editoriale Scientifica, 2013; B. Conforti, Le nazioni unite, Padova, 2005; B. Conforti, Diritto comunitario e diritti degli stati membri, Padova, 1966; B. Conforti, The law and practice of the United Nations, Boston, Martinus Nijhoff, 2005; B. Conforti, International Law and the Role of Domestic Legal Systems, Martinus Nijhoff, 1993; Benedetto Conforti, Scritti di diritto internazionale, Napoli, 2003. Among his works are: A. Tizzano, La Corte di Giustizia delle Comunità europee, Napoli, 1967; A. Tizzano, Problematica del diritto delle comunità europee, Roma, 1992; A. Tizzano (a cura di) Codice dell’Unione Europea, Padova, 1995; A Tizzano, R. Adam, Lineamenti del diritto dell’Unione Europea, Torino, 2014.

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EU law in Italy, which corresponded to a “communitarization” of internal law45 and of the national Constitutional Court. As noted, all this occurred notwithstanding a poor attitude to Community law among “ordinary” judges. One can consider the situation just described as another expression of a particular mind set of the Italian juridical system, globally considered, which can fit into the framework of the famous “Italian style”.46 Indeed, in a well-known work of the mid-1960s, Professor John Henry Merryman described (referencing the general situation of Italian scholarship, jurisprudence and legislation) a poor integration between different ambits and the absence of dialogue between different areas of law. Merryman explained that the compartmentalization among the different disciplines was due to a strong dogmatic tradition in the Italian legal system, in addition to other historical and social reasons that he attempted to illustrate. Thus, despite a gap between scholarly work devoted to Community law and the educational and training system among certain judges, we cannot deny Italian scholarship’s contribution to the development of common principles, which circulated around Europe, encouraged European and internal judges to engage with new Community law challenges, and thus promoted more integration.

after francovich : the consequences at the european and italian levels As illustrated, in Francovich, the ECJ began to prepare – to a greater extent than in the past – a system of responsibility for Member States in breach of Community law. This expansion later found its relevant development in now equally well-known judgments such as Brasserie du Pecheur47 and Factortame,48 which have given more details and specifications in this field.

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For example, a decisive role of the scholar was ongoing during the debate about the principle of disapplication of Italian laws contrary to Community law. The result of the integration between the two legal orders was marked by the surrender by the Constitutional Court of the monopoly of judgment of constitutionality in favour of a decentralized judgment issued by national courts. The quote refers to the famous work of Mauro Cappelletti, John Henry Merryman and Joseph M. Perillo. The Italian Legal System: An Introduction. Stanford, CA: Stanford University Press, 1967. Brasserie du Pecheur v. Bundesrepublik Deutschland and the Queen, Case C-46/93, [1996] ECR I-01029. Factortame, Case C-48/93 [1996].

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In the present study (more than the doctrinal elaborations that followed from the imposition of state responsibility49, including the nature of the liability and the type of sanctioned violation) it appears more useful to refer to the consequences that resulted in practical terms, in both Europe and Italy, where the litigation began. Especially with reference to the Italian context, the consequences of Francovich inside the Italian legal system, despite a huge debate among national scholars and jurisdictions, are not well known outside domestic borders, but one can consider them as a part of this story. From the European general level, in this regard, the research led by Takis Tridimas twenty years after Francovich is of particular interest and establishes well the practical consequences of the case: specifically, the author analyzed the twenty-year trend of the State liability principle, observing how it has remained, in most Member States, a residual and exceptional remedy.50 Indeed, in the period since Francovich, only a small number of cases (about forty as of September 2014) have seen the ECJ examine liability in damages regarding Member States: quantitatively speaking, this is a small number, and it can therefore be said that Francovich did not open the floodgates that might have been expected, and indeed, that many feared. In any case, as Tridimas claims, the deterrent effect has been remarkable. The very idea of the Court was 49

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In examining the possible fields where State liability can arise, particularly at a legislative level, regarding the liability of national legislators, despite the legislators often being responsible for the implementation problems observed in our case study, the prevalence of the doctrine according to which “the King could not do wrong” has constituted a strong obstacle to the application of the Francovich principles to legislative activities. In addition, the principle of the separation of powers between judicial and legislative branches has also played an important role in many Member States to avoid considering state liability as a principle applicable to legislators. The scholarship has partially changed regarding cases of liability for breaches of EU law committed by national judicial authorities of last instance as established in Köbler and confirmed in Traghetti del Mediterraneo. After Brasserie du Pêcheur, it was not clear whether the principle of State liability for breaches of EC law applied also to the breaches committed by national judicial authorities. In Köbler, the ECJ explicitly affirmed that Member States could also be held liable for the breaches of EU law by their judiciary. In particular, the opinion of Advocate General Léger pointed to the reasoning of the ECJ in Francovich, i.e. the effet utile of EC law that is fully transferable to the case of a breach of EC law by national courts of last instance. T. Tridimas, State Liability in Damages: vingt ans après, paper presented in conference Celebrating 20 Years of Francovich in the EU, British Institute of International and Comparative Law, London, 17 November 2011. British Institute of International and Comparative Law organized a seminar to mark the occasion of the twentieth anniversary, to commemorate and reflect on the landmark decision in Francovich. The conference included many perspectives on the Francovich decision and its aftermath, featuring in particular a substantive and statistical overview of case law in line with the decision, as the quoted work of T. Tridimas also shows.

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essential in initiating the process of the recognition of Member State responsibility, with the aim of encouraging the enforcement of European decisions in national legal systems (known as the “deterrent enforcement mechanism”). Not surprisingly, Francovich occurred at a time of particular reluctance to adopt EU directives in certain jurisdictions, first and foremost the Italian legal system, and this was one of the most important motivations that led Mr. Francovich’s lawyers, in arranging their legal strategy, to reach the ECJ. In commenting on the effects of the judgment, Carol Harlow also sustains that “the decision was aimed neither at compensation nor at civil liability, but at punishment and deterrence, the Court’s real motive being to fill a gap in the very limited set of remedies available to it when a Member State failed to rectify an established infringement of EU law.”51 Therefore, it seems today that more than the satisfaction of the private individual, the aim was primarily to create an additional instrument with which to leverage Member States to fulfil their obligations under European law52. Looking more deeply at the Italian legal system, it is interesting to note that an important debate – especially among scholars – which arose after the Francovich case. Starting with specific regard to the consequences of the whole affair for Mr. Francovich himself, it should be noted that he was one of the most famous plaintiffs in the evolution of EU law who benefitted the least from the results of his case. Indeed, perhaps it is not widely known that Francovich never received any compensation as a result of the proceedings he initiated. For Francovich, who became famous around the world for the judgment and the new State liability doctrine, it was a Pyrrhic victory. A few years after the famous case, a second case arrived at the European Court of Justice known as “Francovich II,” which was decided on 9 November 1995.53 Without delving too deeply into the merits of this further trail of litigation, it will suffice to note that, following the first Francovich judgment, in November 1991, the Italian Republic finally fell into line with Directive 80/987, with Legislative decree number 80/1992.54 In any case, although the

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C. Harlow, Francovich and the Problem of the Disobiedent State, in European Law Journal, 2 (1996), p. 199. Another interesting study of the Francovich case and its consequences is the work of A. Bondi, In Praise of Francovich, in M. Poiares Maduro and L. Azoulai (eds), The Past and Future of EU Law: The Classic of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford, 2010), p. 413. The author, in “defense” of Francovich judgment, analyses the main “accusations” levelled against it, highlighting instead its important achievements. Francovich v. Italian Republic, C-479/93. [1995] ECR I-03843. Legge 27 gennaio 1992, n. 80 (It.) (GU n.37, 14–2-1992 - Suppl. Ordinario n. 27), available at www.normattiva.it/uri-res/N2Ls?urn:nir:stato:decreto.legislativo:1992;89

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guarantee of credits for work was payable also for the prior period credits, based on the Italian law, this was only granted to workers whose employers were subject to procedures for the collective satisfaction of creditors. As Mr. Francovich was a worker already employed by a company not subject to insolvency proceedings – despite its undisputed state of insolvency – he was not recognized as belonging to the category of individuals protected by the Directive 80/987. It was the same Court of Justice, therefore, that, after having opened the way to compensation in cases involving the responsibility of states, closed this option off to Mr. Francovich, in a narrow interpretation of the same Directive on the insolvency of employers with which Francovich himself helped to bring the Italian State into line. From a more general standpoint, it might prove useful to make a brief point about the most important results after the affirmation of State liability principle, witnessed in Italy in the last two decades. As a consequence of the principle of liability for breach of European Law (better explicated by the ECJ in several judgments after Francovich, already quoted), it is not only the legislator that is considered liable but also the administrative branch’s expression of the executive power. It is especially in this domain, after and because of Francovich, that within the Italian legal system something began to move.55 Therefore, a first consequence after the affirmation by the ECJ of the protection of subjective positions can be found in the reconsideration by Italian legislators and judges of the general problem of compensation in case of violation of so called (in the Italian legal system) “legitimate interest” – interessi legittimi,56 both generated by EU law and from the internal legal system. So, undoubtedly, community law has been an important driving force in the changes that have accompanied the responsibility of the public administration. In this direction, one may be reminded of a first intervention of the Italian legislator that concerned in particular the safeguard of the legitimate interests of the procedures of community evidence (art. 13 of the law n. 142 of 1992, confirmed by the d.lgs. n. 157/95 and from the d.lgs. n. 65/2000).

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In other words, the obligation of exact realization of Community law is required by the State in its entirety and in all its articulations: both the State (as legislator) and its administrative articulations cannot escape to the observance of such obligation. And this large conception of the principle of liability, inevitably, has affected, in virtue of the pervasive character of EU law, the domestic legal system. In Italy, administrative courts have the function of protect interessi legittimi, i.e. the protection of individual interests directly connected with public powers and interests.

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A fundamental turning point occurred with the famous sentence number 500 of 1999,57 in which the Joint Chambers of the Court of Cassation affirmed the principle of recoverability of interessi legittimi and, therefore, of the liability of public administrations in the case of an infringement of these interests.58 However, with regard to other areas that should be borne in mind when considering a comparison regarding liability for prejudices arising from legal activity, the situation is different with regard to the responsibility of the legislature, and therefore compensation for damage resulting from the infringement of legal positions resulting from legislative procedures is also different. At the level of national legal systems, in fact, despite the significant progress achieved in community case law, as has been demonstrated, compensation has not yet been configured for the illegitimate action of the legislative body, which would appear to be contrary to the old principle according to which the law is an act of sovereignty, and the true character of sovereignty is to be to everyone without anyone being able to claim any compensation. The Italian national courts, in many cases, avoid even considering State liability in this domain by relying on a principle of non-interference with legislative power, based on the strict conception of the separation of powers. Changes can be observed in the relative jurisprudence. By virtue of the judgment of 17 April 2009, number 9147,59 the United Chambers of the Italian Supreme Court are fully involved in the issue concerning the State’s responsibility for failure or delay in the transposition of EU directives. What is most interesting in this judgment is the qualification of the nature of the State’s responsibility for a failure to implement a Community directive. The Supreme Court noted the existence of a conflict in its case law, determined by the coexistence of two distinguished opinions: on the one hand, that which leads back the claim of damage from lack of implementation of EU Directives in the flow of cases of article 2043 of Italian Civil Code; on the other hand, the case law – embraced by the United Sections – according to which, in the absence of effective implementation of the regulations contained in the Directive, the State is not contravening any rules, because nothing has yet been introduced in the judicial system. So, due to the distinct and independent nature of the Community legal system and the internal legal system, the behaviour of the legislator is likely to

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Cass. Sezione Civile, SS.UU., 22 luglio 1999, no. 500. On this issue, see A. Bartolini, Il risarcimento del danno tra giudice comunitario e giudice amministrativo: la nuova tutela dell’interesse legittimo, Torino, 2005. For a review of the judgment, see A.L. Giannelli, La responsabilità del legislatore per tardivo recepimento della direttiva, modelli a confronto, in Foro Amm. CdS, 2009, f. 10, p. 2280.

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be classified as anti-juridical for Community law but not for the Italian legal system, according to the principles of the Italian Constitution. Indeed, the Court has reconstructed the State liability for loss or late transposition of an EU Directive as a “breach of the ex lege obligation to afford compensation for non-anti-juridical activity;” for this reason, it has been inserted in the area of “contractual liability” and is, therefore, subject to the ordinary ten-year limitation period.60 With regard to judicial breaches of EU law, Italy has seen several cases in which the principles expressed in Köbler and Traghetti del Mediterraneo (which involved an Italian case) played an important role. Moreover, there has been a long debate about the civil liability of magistrates and the opportunity to create internal legislation in this field. In this domain, the judgment C-379/10 of 24 November 2011 brought by the European Commission against the Italian Republic can be seen as significant. This is an important ruling, since it represents the result, in the Italian context, of the story related to Member State responsibility for breach of EU law by their courts. The objection contested to the Italian Republic by the Commission only concerned the limitation of the liability of judges established by the provisions of article 2, paragraphs 1 and 2 of Italian law number 117/88,61 according to which, 1. Who has been harmed as a result of unfair behaviour, of an act or a court order by a magistrate, with malice or gross negligence in the performance of his duties, or for denial of justice, can act against the State for compensation of patrimonial and non-patrimonial damages, arising from deprivation of liberty. 2. In the exercise of judicial functions, this cannot involve liability the interpretation of provisions of law or the assessment of facts and evidence.

The European Commission considered these provisions as incompatible with the jurisprudence of the Court of Justice regarding liability for breaches of EU law by national courts of last instance. In the absence, therefore, of the required proof of the existence of an effective and well-documented ability to provide an interpretation of the provisions of Italian law number 117/88 compliant with requirements of EU law, the ECJ concluded that excluding any responsibility of the Italian State for damage caused to individuals as a result of a breach of EU law attributable

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To reinforce the now mentioned view of the Supreme Court, another recent judgment of la Corte Supreme Di Cassazione, Treza Sezione Civile, n. 10813/2011 (It.). Legge 13 aprile 1988, n. 117, “Risarcimento dei danni cagionati nell’esercizio delle funzioni giudiziarie e responsabilità civile dei magistrati” in GU 15 aprile 2008, n. 88.

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to a national Court of last instance – if this infringement results from interpretation of provisions of law or assessment of facts and evidences made by the Court itself – the Italian Republic has failed to fulfil its obligations under the general principle of responsibility of Member States for breach of EU law by one of its Courts of last instance. Currently, after an infringement procedure imposed by the EU Commission for the same reason, a definitive provision of law that regulates the field is still being awaited.

conclusion After this brief overview, it is natural to ask what is the state of effective protection for private individuals today. The Francovich case and the State liability principle – specified in the later EU jurisprudence – have without a doubt contributed to the enforcement of European law, from a standpoint of both prevention and punishment (also called “objective safeguards”). This approach promotes the enforcement of private rights but does not appear to be the most effective form of protection of “subjective safeguards;” it would be better to legally enforce State compliance (in German, VerpflichtungsKlage), but this is not possible due to the delicate balance between Member States and the European Union in the integration process. Due to this necessary balancing, the Court of Justice has clearly limited the scope of the Member State’s liability by introducing some conditions that are not always are easy to apply: therefore, the principle now really only seems to work in the case of complete failure of a Member State to implement Directives into national law. In addition, for a complete and more effective protection of individuals, one could imagine a sort of – as it is known in the Italian legal system – “real protection” not limited to a compensation for damages alone (in cases such as Francovich), but extended to a reinstatement of the individual’s preceding legal position (i.e. in case of workers, the right to return to a former job). The words of the Advocate General Jean Mischo62 outline this idea well. At the beginning of his opinion in Francovich, he commented: “Rarely has the Court been called upon to decide a case in which the adverse consequences for the individuals concerned of failure to implement a Directive were as shocking as in the case now before us.” However looking back at the judgment some years later, Mischo himself wrote: “cette jurisprudence n’est pas alleé 62

Opinion of Advocate General Mischo in Francovich. See AG Mischo’s Opinion in joined cases C-6 and C-9/90, Francovich and others v. Italian Republic, Consolidated Case C-6/90 and C-9/90, (1991) E.C.R.I-5357.

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trop loin”,63 commenting on the fact that in terms of effective protection of European citizens, the principle of state liability did not go far enough. This is also true for Mr. Francovich himself: indeed, as we explained, despite his “fame”, he ultimately not received no compensation. From the point of view of the event and its protagonists – focusing on the Italian legal system – we have tried to show the non-homogeneous knowledge of EU law between scholars, judges and universities in the time of the story. To conclude, it is undeniable that this particular “atmosphere” which characterized the Italian context at the time of Francovich has certainly contributed to the case formation, and it is helpful to understand, more generally, how, and within what time frame, the EU principles have started to spread among the different domestic contexts.

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J. Mischo, La mise en œuvre du droit communautaire de Francovich à Köbler: douze ans du principe de la responsabilité de l’Etat, ed. by Sofia Moreira de Sousa & Wolfgang Heusel Publisher Köln, Bundesanzeiger, (2004), p. 58. The sentence can be translated as: “This jurisprudence has not gone too far.”

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19 Tessili vs. Dunlop 1976: The Political Background of Judicial Restraint vera fritz

introduction Contrary to many of the European Court of Justice’s (ECJ) most commented rulings of the 1970s, the Tessili v. Dunlop judgment of 1976 did not go down in the ECJ’s history as a bold ruling.1 It has indeed received much criticism for providing a far too cautious interpretation of the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (henceforth ‘the Brussels Convention’2); instead of laying down an autonomous definition of Article 5.1 of the Brussels Convention, the ECJ ruled that the ‘place of performance’ of contractual obligations was to be determined according to the applicable national law.3 This chapter provides several political arguments for why the ECJ exercised restraint in the Tessili v. Dunlop case. These arguments are based upon archival research of the ‘Luxembourg Protocol’ of 1971,4 which granted the ECJ the jurisdiction to interpret the Brussels Convention. The chapter shows that some of the six founding Member States of the European Communities have been far from enthusiastic towards having the ECJ interpret the Brussels Convention, partly due to concerns that the ECJ will make autonomous interpretations of its provisions. On the other hand, this chapter stresses that the Tessili ruling was not as lukewarm as sometimes perceived, by highlighting 1

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Research funded by Luxembourg’s National Research Fund. I would like to thank the editors Fernanda Nicola and Bill Davies for their helpful comments on drafts of this chapter. Signed on 27 September 1968 by the six founding Member States of the EC: Germany, France, Italy, the Netherlands, Belgium and Luxembourg. Case 12/76, Industrie Tessili Italiana Como v Dunlop AG, Judgment of the Court of 6 October 1976 (henceforth 12/76, Tessili v Dunlop). Protocol concerning the interpretation by the Court of Justice of the convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, signed in Luxembourg on 3 June 1971, 1262 UNTS 153; 8 ILM 229 (1969).

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some of its paragraphs that insist on the link between the Brussels convention and the European treaties. These paragraphs paved the way for a broad and teleological interpretation of the Brussels Convention, which could take the ECJ far beyond the limited role that some Member States wanted it to play in the framework of the agreement.

tessili v. dunlop The Tessili question for a preliminary ruling was introduced at the ECJ in February 1976, several months after the entrance into force of the protocol that vested in the ECJ the competence to issue interpretative rulings on the Brussels Convention.5 The referral was sent by the Oberlandesgericht Frankfurt am Main, which asked for an interpretation of Article 5.1 of the Brussels Convention. The basic principle of the Brussels Convention was that persons domiciled in a Member State should, whatever their nationality, be sued in the courts of that state. However, it foresaw a certain number of special jurisdiction cases, in which the choice of jurisdiction was the plaintiff’s prerogative. Article 5.1 foresaw such a special jurisdiction case and stated: 5. A person domiciled in a Contracting State may, in another Contracting State, be sued: in matters relating to a contract, in the courts for the place of performance of the obligation in question

How was the ‘place of performance’ of contractual obligations to be determined? The Brussels Convention did not offer any definition, and the private laws of the Member States provided highly diverging rules in this regard. As pointed out by Advocate General Mayras, [C]ertain legislations refer both to the place where the contract or obligation was concluded or came into being and the place for their performance (Belgium, Italy); other legislations give jurisdiction in actions concerning sales of a commercial character either to the court for the place where the promise was made and the goods delivered by the seller or to the court for the place where payment was to be made by the buyer (France, Luxembourg); others accept in all cases only the jurisdiction of the court for the place of performance (Federal Republic of Germany); finally, others pay no attention to any criterion of connexion with the conclusion or performance of a contract (The Netherlands).6 5 6

The protocol came into force on 1 September 1975. Opinion of Advocate General Mayras in 12/76, Tessili v Dunlop.

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This divergence was problematic for private litigants, who could not precisely foresee in the courts of which Member States they could be sued. Only a uniform definition of how the place of performance was to be determined could remove this legal uncertainty. The ECJ refused to provide a ‘Community’ interpretation of the ‘place of performance’ of contractual obligations in its ruling of 6 October 1976. It simply referred back to the national law: Having regard to the differences obtaining between national laws of contract and to the absence at this stage of legal development of any unification in the substantive law applicable, it does not appear possible to give any more substantial guide to the interpretation of the reference made by Article 5 (1) to the ‘place of performance’ of contractual obligations.’ The place of performance should ‘be determined in accordance with the law which governs the obligations in question according to the rules of conflict of laws of the court before which the matter is brought.7

The ECJ’s decision is surprising. First, large consensus reigned on the fact that Article 5.1 was problematic because it left room for forum shopping. It had provoked controversy since its very inception.8 Second, the 1970s Court is all but known as a particularly shy bench of judges. The Judge Rapporteur in this case was moreover Pierre Pescatore, the ECJ’s storm trooper in terms of ‘European integration through law and ECJ case law’ convictions. The fact that Tessili was the first case sent to Luxembourg on the Brussels Convention certainly explains to a great extent the European Court’s carefulness. Also at the root of its restraint could have been the fact that the new Member States, the United Kingdom, Ireland and Denmark, had not yet signed the Brussels Convention and that negotiations on their accession were being held when the case was submitted to the Court.9 The ECJ may have wanted to avoid endangering the success of these negotiations. This chapter argues that not 7

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Case 12/76, Industrie Tessili Italiana Como v. Dunlop AG, Judgment of the Court of 6 October 1976. A. Stadler referred to it as ‘something of stumbling block which provoked vivid discussion right from its inception’. Astrid Stadler, ‘From the Brussels convention to Regulation 44/2001: Cornerstones of a European Law of Civil Procedure’, Common Market Law Review 42 (2005), 1647. Hjalte Rasmussen, ‘A new generation of Community Law? Reflections on the handling by the Court of Justice of the Protocol of 1971 relating to the interpretation of the Brussels Convention on Jurisdiction and Enforcement of Judgments’, Common Market Law Review 15 (1978), 263. The three new Member States acceded in 1978 with the convention on the association of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters and to the Protocol on its interpretation by the Court of Justice, signed on 9 October 1978.

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only worries with regard to the new but also with regard to the ‘old’ Member States’ reactions to the ruling prevailed among the judges, explaining their restraint in the Tessili ruling.

the political background: member state apprehensions during the drafting of the luxembourg protocol The Brussels Convention was signed on 27 September 27 1968. It did not foresee any provisions regarding its uniform interpretation. Neither did the EEC Treaty. Even though the Brussels Convention was pursuant to article 220 EEC,10 the EEC Treaty was mute about whether and how uniform interpretation of agreements based on this article should be ensured. Technically the Brussels Convention was not a part of the Community legal order. It was a separate international agreement signed by six States, which were also the founding States of the EC. It did not refer to ‘Member States’, but to ‘Contracting States’. The vesting of competences in the ECJ to adjudicate on the Brussels Convention was hence not at all automatic. A special protocol had to be drafted in order to allow the European judges to give preliminary rulings on its interpretation. The Member States’ discussions on the role that the ECJ should play in ensuring unity in the interpretation of the Brussels Convention were particularly difficult. It took a group of experts from the six States several years to ‘hammer out’ the four-page agreement bestowing powers on the ECJ.11 The protocol provided a preliminary ruling procedure similar to article 177 EEC, which allowed national courts to send questions regarding the interpretation of the Brussels Convention to the ECJ.12 However, the mechanism had undergone restrictive modifications. The possibility to make references for a preliminary ruling was limited to courts judging in appeal. Supreme courts on their end only had to refer to the ECJ if they considered that a decision on the question was necessary to enable them to give judgment.13 10

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Article 220 EEC encouraged Member States to enter into negotiations with each other to simplify the formalities governing the reciprocal recognition and execution of judicial decisions. Hjalte Rasmussen, On law and policy in the European Court of Justice, A comparative study in judicial policymaking (Dordrecht: M. Nijhoff, 1986), p. 337. Article 177 EEC gave all national courts the possibility, if they considered that a decision on the question was necessary to enable them to give judgment, to make a referral regarding the interpretation of the EEC treaty to the European Court of Justice. It moreover provided that courts, against whose decisions there was no judicial remedy under national law, were bound to bring matters regarding the interpretation of the treaty before the Court of Justice. This formulation was inspired by the EEC treaty, which provided such a clause for the national courts’ discretionary referral.

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The main official argument to justify this new restrictive version of the preliminary ruling mechanism was that private litigants could be tempted to invoke references to the ECJ as a delaying tactic or to put pressure on their opponents. Another was that given the number and diversity of the disputes to which the Brussels Convention applied, the ECJ risked being flooded with cases if all national courts were allowed to ask it questions for interpretation.14 Primary sources from European and national archives reveal that, even though these arguments were brought up during the negotiations, it was not private litigants’ interests or a possible flooding of the Court of Justice that fuelled this restriction. Instead it was the reluctance of some Member States to let the European judges pronounce themselves on matters of private international law which had until then been sheltered from the integration process.15 Three States – Italy, the Netherlands and Luxembourg – took a highly positive standpoint with regard to letting the ECJ receive questions for a preliminary ruling from all national courts. In their eyes, it was in the interest of both the uniform interpretation of the Brussels Convention and the development of European law in general to let the ECJ pronounce itself as often as possible on the Brussels Convention.16 The other three – in particular France, but also Belgium and Germany – only wanted to see it play a minimal role in the framework of the Brussels Convention. Two main apprehensions or convictions prevailed among those States with relatively hostile standpoints towards allowing the ECJ to hand out interpretations of the Brussels Convention. First, national courts had, until that point, handled the determination of their jurisdiction and the enforcement of foreign judgments. There was no

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See the official report on the protocol, P. Jenard, ‘Report on the Protocols of June 1971’, Official Journal of the European Communities 22 (5 March 1979), p. 66. Several authors have already qualified these arguments as not very convincing and have questioned whether they were really the motor behind the restriction. See for example M. R. Mok, ‘The interpretation by the European Court of Justice of special conventions concluded between the member States, Common Market Law Review 8 (1971), 485; Michel Waelbroeck, ‘L’interprétation préjudicielle des dispositions de la convention de Bruxelles et de la convention de Rome’, in Jean-Victor Louis et al. (dir.), Le droit de la CEE: Commentaire Mégret, vol. 10, La Cour de Justice, les actes des institutions, 2nd ed. (Bruxelles: Ed. de l’Université, 1993), pp. 272–77 and Hjalte Rasmussen, ‘A new generation of Community Law?’, 249. The following analysis is the result of research carried out in the archives of the European Council, which offer the minutes of the experts’ working sessions, as well as in the French and Belgian national archives. With regard to the former, see Historical Archives of the European Union, CM2/1971, files 921 to 926. For the latter, see Archives nationales de France, 19950411, 211 and Archives du Ministère des Affaires étrangères belge, 6. 641/1 CEE. For a detailed analysis of the different positions that the Member States adopted in these negotiations, see Vera Fritz, ‘The first Member State rebellion? The European Court of Justice and the negotiations of the Luxembourg protocol’, European Law Journal 21 (2015).

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reason to limit their autonomy. Supreme courts could ensure uniformity at the national level. References to the ECJ should consequently only take place among the Member States’ highest courts, and all referrals should preferably be discretionary. Second, preliminary rulings by the European Court of Justice could affect the content of national law. Contrary to the European treaties, the Brussels Convention had its roots in the private law of the six founding Member States. It contained many expressions and legal norms drawn from national civil and commercial law terminology, which did not always have the same meanings in each state. The main purpose followed by the restrictive version of the preliminary ruling mechanism was hence dual: (1) to limit the loss of autonomy for national courts, and (2) to minimize the ECJ’s chances of overextending the harmonization required by the Brussels convention, which already interfered in the national systems.17 The European judges should not enjoy the same authority in the interpretation of the Brussels Convention that they had in the framework of the treaties. This agreement was different from the treaties. Even though its uniform interpretation had to a certain degree to be ensured, it should (to the extent possible) be kept outside of the orbit of Community law. The Member States’ resistance towards a too ambitious harmonization in matters of jurisdiction and enforcement of judgments in civil and commercial matters could also be observed in the Brussels Convention itself. The agreement contained no general clause giving judges guidelines on how to overcome difficulties of interpretation,18 which indicates that the States’ experts had wanted to leave national courts a certain margin of autonomy in their reading of the Brussels Convention.

the ecj’s politico-legal dilemma Given this political background, the European judges faced a serious politicolegal dilemma in February 1976, when they were questioned on the interpretation of the ‘place of performance’ of contractual obligations. It was obvious that, in the interest of the integration process and the legal security of economic actors of the Member States, an autonomous definition of article 5.1 was necessary. At the same time, the judges were now expected to do precisely 17

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Andrea Giardina, ‘The European Court and the Brussels convention on jurisdiction and judgments’, International and Comparative Law Quarterly 27 (1978), 265. Pointed out by Andrea Giardina, ‘The European Court and the Brussels convention on jurisdiction and judgments’.

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what some Member States had feared they would do – which is help to overcome the States’ experts’ difficulties to provide a uniform definition in the Brussels Convention.19 The interest of the European integration process now requested them to do what had led the Member States to restrict their possibilities to receive questions for preliminary rulings on the Brussels Convention in the first place. Could the ECJ, after it had taken the founding States three years of difficult negotiations to find a common ground on allowing it to interpret the Brussels Convention at all, start off its interpretation of the agreement with a far-reaching pro-integration ruling – and moreover with regard to one of the Brussels Convention’s articles with the largest practical consequences?20 It is not surprising that the Court, which was then already confronted with ‘gouvernement des juges’ accusations, opted for the solution that was the strategically safer option and referred back to the diverging national laws. It consequently faced sharp criticism, not only at the time of the ruling but also during the following decades. Georges Droz wrote in 1977 that, far from solving the difficulties arising from the ambiguous article 5.1, the ECJ had made things worse.21 He even went as far as to suggest that it should be pondered whether the special jurisdiction clause in contract matters was not better to be removed from the Brussels Convention in a future revision.22 Herbert Bernstein pointed out that ‘leaving the determination of the place of performance for purposes of Article 5(1) of the Brussels Convention to the law applicable to the obligation in question [had] serious disadvantages’ and that the ECJ should ‘overrule Tessili’.23 Maria O’Neill even saw in the ECJ’s unwillingness to adopt a constitutional style approach in Tessili one of the reasons why the Brussels Convention remained ‘a stillborn child’. Not only did it not help to overcome the divergences among the laws of the contracting states;

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Some commentators, however, also argued that the role of the preliminary ruling mechanism was not to let the ECJ freely fill in the gaps existing in the rules and give them meanings not originally intended by the contracting states. They consequently approved the ECJ’s decision in the Tessili case, see, for example, A. Giardina, ‘The European Court and the Brussels convention on jurisdiction and judgments’. A. McClellan and G. Kremlis, ‘The convention of September 27, 1968 on jurisdiction and enforcement of judgments in civil and commercial matters. Survey of the case-law of the Court of Justice of the European Communities and of the national courts’, Common Market Law Review 20 (1983), 543. Georges Droz, ‘L’interprétation, par la Cour de Justice des Communautés, des règles de compétence judiciaire européennes en matière de contrat’, Recueil Dalloz Sirey 40 (1977), 289. Ibid., p. 287. Herbert Bernstein, ‘International contracts in European Courts: Jurisdiction under article 5(1) of the Brussels convention’, Tulane European & Civil Law Forum, 11 (1996), 40 and 47.

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it also strengthened the Brussels Convention’s lack of identity as EC law, which stifled its potential.24

the ruling’s general paragraphs on the interpretation of the brussels convention Tessili was, however, not as much a careful ruling as often perceived. It contained some paragraphs on the general interpretation of the Brussels Convention, which, in the light of the analysis of the negotiations of the Luxembourg Protocol, appear to have been quite blunt.25 The European judges indeed started off their interpretation of Article 5.1 with some general remarks on the Brussels Convention that, by insisting on the link between the Brussels Convention and the EEC Treaty, pulled the Brussels Convention into the orbit of Community law. The judges, for example, stressed that the words ‘Contracting States’ refer to the ‘Member States’ of the Communities. One can imagine that if the Member States of the EC had wanted to appear in the Brussels Convention as ‘Member States’, their experts would have used those terms. The fact that they did not opt for this solution is most likely representative of their desire, or at least the one of some Member States, to not have the Brussels Convention appear as a form of extension of the EEC treaty. Even though it was pursuant to article 220 EEC, it was a separate international agreement, it was different from the treaties, as France, Belgium and Germany had also stressed during the negotiations of the Luxembourg Protocol. By emphasizing that the words ‘Contracting States’ refer to the ‘Member States’ of the Communities, the judges clearly tried to minimize this difference. Whatever the stricto sensu nature of the Brussels Convention, it was part of the Community legal order.26 24

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Maria O’Neill, ‘The Brussels Convention: a still born child?’, Northern Ireland Legal Quarterly 50 (1999), 243. These paragraphs have not gone unnoticed in the past. See in particular Marco Darmon, ‘La mission de la Cour et le système de la Convention de Bruxelles’ in Cour de Justice des Communautés européennes, Compétence judiciaire et exécution des jugements en Europe. Actes du colloque sur l’interprétation de la Convention de Bruxelles par la Cour de Justice européenne dans la perspective de l’espace judiciaire européen (London: Butterworths, 1993), pp. 3–11. Georges Droz, ‘La Cour de justice des Communautés Européennes et les conflits de juridictions à l’intérieur du Marché Commun’, Annuaire français de droit international 23 (1997), 902. Noteworthy in this regard is also that the ECJ invited the new Member States of Denmark, Ireland and the United Kingdom to submit opinions to the Court, although they had not yet acceded to the convention. France objected to the ECJ’s decision to let those States present their opinions. H. Rasmussen suggested that it may have been its anxiety with regard to the fact that the Court of Justice was laying the ground for a Community interpretation of the convention, which had fuelled this objection. Hjalte Rasmussen, ‘A new generation of Community Law?’, 264.

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To further stress that the Brussels Convention was a Community matter, the ECJ indicated in Tessili that the agreement had been concluded in pursuance of article 220 EEC, i.e. in order to secure ‘for the benefit of the [Member States’] nationals the establishment of rules intended to facilitate the achievement of the common market’.27 The Court then relied on Article 220 EEC as the Brussels convention’s legal basis to put forth that the agreement had to ‘be interpreted having regard both to its principles and objectives and to its relationship with the Treaty.’28 The importance of this statement cannot be underestimated. The judges here laid bare the principles that they were going to follow in their interpretation of the Brussels Convention and opened the possibility of a broad, dynamic and teleological interpretation of the agreement.29 They clearly announced that they were going to approach it with the goal that was also the one of the European treaties: laying the foundations for an ‘ever closer union among the peoples of Europe’.30 The possibility that the European Court could in the future put forth dynamic interpretations of the Brussels Convention was further developed in Tessili’s general interpretation paragraphs on the presence of legal norms in the Brussels Convention, which could be interpreted differently in the various Member States. Regarding these divergences of the national laws, the Court declared that: The Convention frequently uses words and legal concepts drawn from civil, commercial and procedural law and capable of a different meaning from one Member State to another. The question therefore arises whether these words and concepts must be regarded as having their own independent meaning and as being thus common to all the Member States or as referring to substantive rules of the law applicable in each case under the rules of conflict of laws of the court before which the matter is first brought. Neither of these two options rules out the other since the appropriate choice can only be made in respect of each of the provisions of the Convention to ensure that it is fully effective having regard to the objectives of Article 220 of the Treaty.31

What the ECJ did here was clear. Even though it refused to provide an autonomous interpretation of the Brussels Convention in the case at hand, it set the stage for not referring back to the national law in the future and

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28 Ibid. 12/76, Tessili v Dunlop. They even paved the way for the primacy of the Brussels convention over national law, as EC law. See in this regard Marco Darmon, ‘La mission de la Cour et le système de la Convention de Bruxelles’. Preamble of the Treaty establishing the European Economic Community. 12/76, Tessili v Dunlop.

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pushing the harmonization beyond what the Member States’ experts had managed to do. It prepared the ground for future pro-integrationist interpretations. The first autonomous interpretation of a provision of the Brussels Convention did not take long to follow. One week after Tessili, the ECJ ruled in LTU v. Eurocontrol that ‘in the interpretation of the concept “civil and commercial matters” . . . reference must be made not to the law of one of the States concerned but, first, to the objectives and scheme of the Convention and, secondly, to the general principles which stem from the corpus of the national legal systems.’32 As Pierre Pescatore wrote in 1980, the ECJ had announced a program with two alternatives in its preamble of Tessili. But the choice to refer back to the national law remained an isolated one. In its subsequent interpretations of the Brussels Convention, it showed a consistent preference for autonomous interpretations.33 The restraint it laid bare in Tessili appears, above all, as a strategic one. It is difficult to imagine that the judges did not already know which alternative they would later almost systematically opt for when they initially announced the two alternatives in 1976.

conclusion: tessili and the upholding of the tessili doctrine by the ecj This chapter highlighted the political background behind the Tessili ruling and argued that the ECJ had serious strategic reasons to not provide an aggressive interpretation of the Brussels Convention when it was first requested to pronounce itself on the agreement. But if the ECJ refused to provide an answer that was in the interest of the harmonization process for reasons that were mainly political, then why did later generations of European judges uphold the controversial Tessili doctrine? Despite the fact that its Advocates General urged it to provide a different interpretation of Article 5.1,34 the Court indeed confirmed its reading of 1976 on several occasions, as for example in Custom v. Stawa (1994)35, GIE Groupe Concorde v. 32

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Case 29/76, LTU Lufttransportunternehmen GmBH & Co v Eurocontrol, Judgment of the Court of 14 October 1976. Pierre Pescatore, ‘Le recours, dans la jurisprudence de la Cour de Justice des Communautés européennes, à des normes déduites de la comparaison des droits des Etats membres’, Revue internationale de droit comparé 32 (1980), 344. Hélène Gaudemet-Tallon referred to the advocates general’s repeated urging as the ‘fronde des avocats généraux contre la jurisprudence Tessili’ in ‘Du juge compétent pour connaître des demandes fondées sur deux obligations équivalentes découlant d’un même contrat, Cour de justice des Communautés européennes. – 5 octobre 1999, Leathertex Divisione Sintetici SpA c. Bodetex BVBA’, Revue critique de droit international privé 1 (2000), 76. Case C-288/92, Custom Made Commercial Ltd v. Stawa Metallbau GmbH. 29 June 1994.

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‘Suhadiwarno Panjan’ (1999)36 and Falco v. Weller-Lindhorst (2009).37 It consequently again faced strenuous criticism by commentators, which pointed out its ‘lack of courage’38 to opt for a solution that was in the interest of the integration process and the legal certainty.39 It will be suggested here that the later generations of ECJ judges also had political reasons to not take the road of an independent interpretation of the polemic provision. When the ECJ pronounced its GIE Groupe Concorde ruling on 28 September 1999, the Commission had just brought forward a draft regulation on jurisdiction and the enforcement of judgments in civil and commercial matters which was intended to supersede the Brussels Convention.40 As it proposed a revision of Article 5.1, the judges most likely did not want to interfere in this revision process. The Regulation, known as the Brussels I Regulation,41 was adopted in December of 2000 and entered into force in March 2002. Article 5.1 now provided in point (b) an independent definition of the place of performance of contractual obligations in the case of the sale of goods and in the case of the provision of services.42 For all contracts falling out

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Case C-440/97, GIE Groupe Concorde and Others v. The Master of the vessel ‘Suhadiwarno Panjan’ and Others. Judgment of the Court of 28 September 1999. Case C-533/07, Falco Privatstiftung and Thomas Rabitsch v. Gisela Weller-Lindhorst. Judgment of the Court of 23 April 2009. Marco De Cristofaro, ‘Critical remarks on the Vienna Sales Convention’s impact on jurisdiction’, Uniform Law Review 5 (2000), 51. Ibid. Criticism with regard to the 1994 Custom v. Stawa even came from inside the Court of Justice, see Fernand Schockweiler, ‘Jurisprudence récente de la Cour en matière de conflits de compétence judiciaire et d’exécution des décisions’, European Review of Private law 4 (1996), 1. As Georges Droz in 1977, commentators again consequently suggested the abrogation of the special jurisdiction rules in matters relating to a contract. See, for example, Stadler, ‘From the Brussels convention to Regulation 44/2001’, 1655–56. It was brought forward in July of 1999, see Ulrich Magnus and Peter Mankowski, Brussels I regulation, 2nd edition (Munich: Sellier, 2012), p. 17. Council Regulation No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. A person domiciled in a Member State may, in another Member State, be sued: 1.

(a) in matters relating to a contract, in the courts for the place of performance of the obligation in question; (b) for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be: in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered, in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided, (c) if subparagraph (b) does not apply then subparagraph (a) applies; For a comment of these new provisions see Stadler, ‘From the Brussels convention to Regulation 44/2001’.

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of the scope of this article, however, the old rule of Article 5.1 and the Tessili doctrine prevailed.43 The revision was consequently found unsatisfactory.44 When the ECJ rendered its Falco ruling in 2009, it found itself in a similar situation. While it was again questioned on Article 5.1, a revision of the Brussels I Regulation was under study. According to Ulrich Magnus and Peter Mankowski, Article 5.1 was not planned to be substantially altered: ‘the issue was too contested when the Brussels I Regulation was negotiated to stir matters up yet again.’45 The ECJ probably did not want to do so either. In the recast of the Brussels I Regulation, which entered into force in 2015 (Brussels Ibis), Article 5.1 (now 7.1) remains unchanged. The Tessili doctrine still prevails and the ECJ, now Court of Justice of the European Union, will probably be questioned on the controversial special jurisdiction clauses for contractual obligations again.

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Article 5.1 was now Article 5.1 (a). See in this regard for example Stadler, ‘From the Brussels convention to Regulation 44/2001’. Other authors saw it as an improvement, even though still far from perfect. See, for example, Takahashi Koji, ‘Jurisdiction in matters relating to a contract: article 5(1) of the Brussels convention and regulation’, European Law Review 27(2002). Ulrich Magnus and Peter Mankowski, Brussels I regulation, 2nd edition (Munich: Sellier, 2012), p. 196.

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20 Océano Grupo: A Transatlantic Victory for the Consumer and a Missed Opportunity for European Law fernanda nicola and evelyne tichadou

introduction This chapter addresses a well-known judicial story in European private law about the Océano Grupo judgment of the Court of Justice of the EU (CJEU) decided on June 27, 2000.1 This case represents a victory for consumer protection in Europe allowing a Spanish judge to declare ex-officio an unfair clause in a consumer contract void. In retelling this story through interviews of the référendaires involved in the drafting of the Océano Grupo decision and construing its future legacy, this chapter offers some ‘behind the scene’ insights on the judgment through a thick description2 of three different historical contexts: the Italian elites at the CJEU in the 1990s, the growing transnational judicial dialogue on the constitutionalization of private law and almost a decade later, in the post-financial crisis scenario, the case of the Spanish mortgage defaults. In these three historical contexts Océano Grupo acquires different meanings. If in the first two contexts the case appears as a missed opportunity for EU law and the expansion of the doctrine of direct effect and the CJEU to enter into a global judicial dialogue, in the third one Océano Grupo is worth of a second life in actively protecting consumers from financial hardship. European scholars have written many pages on the doctrinal influence of Océano Grupo as an important turning point in the Court’s jurisprudence for two main reasons. On the one hand, this decision marks the increasing commitment of the Court toward a more uniform interpretation in protecting consumers against unfair business practices throughout Europe.3 1

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Joined Cases C-240/98 to C-244/98 Océano Grupo Editorial SA, 2000 E.C.R. I-4941 [hereinafter Océano Grupo]. See Antoine Vauchez, Chapter 2 in this volume. See Stephen Weatherill, Can There Be Common Interpretation of European Private Law?, 31 Ga. J. Int’l & Comp. L. 139 (2002).

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Contrastingly, it aims to clarify the convoluted doctrine of horizontal direct effect of European directives that commentators have addressed from a federal4 and existential5 perspective. In this respect, the Opinion of Advocate General Antonio Saggio6 is well known for affirming the principle of effectiveness of EU law7 while attempting to overcome the distinction between vertical and horizontal direct effect of directives. Since the 1970s, the Court acknowledged that EEC directives had vertical direct effect so that Member States would respect their obligations under EU law.8 Yet when private parties were involved in a dispute in which a directive granted private rights or allowed the disapplication of domestic law, the Court maintained and reinstated the legal fiction that directives do not have horizontal direct effect and cannot impose direct obligations on private parties.9 Yet European judges have used a lot of ink to maintain the distinction between their vertical and horizontal direct effect while creating alternative strategies, such as state liability to maintain a fully coherent and integrated EU legal regime.10 In retrospect, the doctrinal approach pursued in Océano Grupo was an attempt to overcome the public-private distinction and spare the Court from the creation of a doctrinal jungle. In bringing to the surface the contextual histories in Océano Grupo, the chapter goes beyond its doctrinal contribution and highlights the many contexts and actors involved in the judgment. For instance, this judgment can be retold as a story of judicial activism led by Advocate General Antonio Saggio and his référendaires relying on the

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See Eric Stein, Judges, Lawyers and The Making of a Transnational Constitution, 75 Am. J. Int’l L. 16 (1981). See Siniša Rodin, Les effets horizontaux du droit de l’union européenne, in La Cour de justice de l’Union européenne sous la présidence de Vassilios Skouris (2003–2015) pp. 491–508. See Opinion of Advocate General Saggio in Océano Grupo Editorial SA delivered on 16 December 1999 E.C.R. I-4941. The Advocate General is not a public prosecutor. He is a member of the CJEU, even though he does not participate in its deliberations, and he has the same status as a judge. His individual opinion is presented after the oral proceedings, but it does not reflect the view of the Court. However, when the CJEU follows or departs from the AG’s opinion, it constitutes a precious source of information that could be compared to the role played by dissenting or concurring opinion in Anglo-American legal systems on the legal reasoning adopted by the Court. Id. at para 24 explaining that “it is reasonable to consider that action by the court of its own motion constitutes not only a means that is extremely effective for the purposes of sanctions but also seems be an effective instrument for dissuading sellers or suppliers from inserting the term in contracts entered into with consumers.” pp. I 4951-2. See Case C-41/74 Van Duyn [1974] ECR 1337, at paragraph 12. See Case C-91/92 Paola Faccini Dori [1994] ECR I-3347 and Opinion of Advocate General Lenz delivered on 9 February 1994 I-3328. Joined Cases C-6/90 and C-9/90 Francovich and Bonifaci et al [1991] ECR I- 5357. For a story of this case, see Antonio Bartolini and Angela Guerrieri, Chapter 18 in this volume.

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directive on unfair terms in consumer contracts to ensure its effectiveness through procedural fairness in its application.11 In light of the actors involved in this case in the late 1990s, Océano Grupo becomes the story of the influential and well-respected Italian judicial elite that was active both at the Court of Justice and the Court of First Instance. The convergence in Luxemburg of independent, charismatic and intellectually committed judges and advocates general such as Francesco Capotorti, Alberto Trabucchi and Federico Mancini was not only a phenomenon of the 1960s, 1970s and 1980s but continued with Antonio Saggio, Giuseppe Tesauro, Antonio Tizzano (first Italian Vice-President of the Court) and Paolo Mengozzi. Many of them attracted a network of référendaires who became central to strengthen the European project back home because they shared the ambitions of their mentors. These Italian jurists benefitted from a relatively small European Union initially with twelve, and then fifteen, Member States. They developed powerful formal and informal networks within the Courts in Luxembourg aiming to shape EU law doctrines with a prointegrationist vision while sharing the general legal culture of civil-law principles.12 Yet, in this context Océano Grupo is perceived as a missed opportunity to openly put an end to the distinction between vertical and horizontal direct effect of directives.13 The judgment can also be retold in a global context that is characterized by the growing judicial dialogue among constitutional courts.14 From a comparative constitutional law perspective, Océano Grupo and the effect of EU law on private parties resonates with a global legal consciousness emerging at the turn of the twenty-first century.15 At the time, legal scholars addressing the problem of the horizontal effect of constitutional rights converged along a doctrinal and

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Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, partly amended by Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, on this, see Stephen R. Weatherill, The Consumer Rights Directive: How and Why a Quest for “Coherence” Has (Largely) Failed 49 Common Market Law Review (2012). See Martin W. Hesselink, The General Principles of Civil Law: Their Nature, Roles and Legitimacy, in The Involvement of EU Law in Private Law Relationships 131 (Dorota Leczykiewicz & Stephen Weatherill eds., 2013). See Takis Tridimas, Horizontal Direct Effect of Directives: A Missed Opportunity? 19 EL Rev. 621 (1994). See Anne-Marie Slaughter, A New World Order (2004). See Duncan Kennedy, The Globalizations of Law and Legal Thought in The New Law and Development: A Critical Appraisal (David Trubek & Alvaro Santos eds., 2006) on the relevance of comparative constitutionalism for a global legal consciousness of the third globalization.

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political spectrum. On the one hand, the constitutionalization of private law under the federal state action doctrine was interpreted by the US Supreme Court in a rather restrictive manner.16 On the other, the horizontal effect of constitutional rights,17 namely on private parties, received greater attention by constitutional adjudication and scholarship in Canada, Ireland, South Africa and Germany.18 In this comparative constitutional context, Océano Grupo was perceived as a missed opportunity to enlist the CJEU in a global judicial dialogue among courts and its judges as diplomats.19 Today, Océano Grupo lives a life of its own due to its reappearance in the Spanish context, while it continues to resonate with EU private lawyers long committed to expand the protections for consumers and vulnerable groups in the single market.20 In the aftermath of the financial crisis and its austerity policies that have endangered many of the guarantees that the European social model, Océano Grupo became worthy of a second life. This judgment, in its new incarnation, came to the rescue in Spain where eviction rates skyrocketed in 2012, becoming a European symbol of the housing bubble that contributed to the Spanish sovereign debt crisis.21 Océano Grupo and its followers22 were resuscitated by active Spanish judges such as José María Fernández Seijo in cases of household mortgages foreclosures and abuse in consumer financial services.23

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See Shelley v. Kraemer, 334 U.S. 1 (1948) and for an opposite outcome on the state action requirement Moose Lodge v. Irvis, 407 U.S. 163 (1972). See Stephen Gardbaum, The ‘Horizontal Effect’ of Constitutional Rights, 102 Michigan Law Review 388–459, (2003). See M. Kumm, Who Is Afraid of the Total Constitution? Constitutional Rights and Principles and the Constitutionalization of Private Law, 7 German Law Journal (2006) discussing the Lueth case BVerfGE 7, 198. See Stephen Breyer, The Court and the World (2015). See Verica Trstenjak & Erwin Beysen, European Consumer Protection Law: Curia Semper Dabit Remedium? 48 Common Mkt. L. Rev. 95 (2011) and Daniela Caruso, Qu’ils mangent des contrats: Rethinking Justice in EU Contract Law, in Europe’s Justice Deficit at 367 (Dimitry Kochenov, Grainne de Burca & Andrew Williams eds., 2014). Case C-415/11 Mohamed Aziz v. Caixa d’Estalvis de Catalunya, Tarragona i Manresa [2013] in which Judge Antonio Tizzano was the judge rapporteur. For a commentary in the Spanish context see José María Fernández Seijo, El impacto emocional de la sentencia, Huffington Post 20 March 2013. See Mostanza Claro, El Corte Ingles, Banesto described by Fernando Gómez Pomar & Karolina Lyczkowska, Spanish Courts, the Court of Justice of the European Union and Consumer Law, Revista para el Análisis del Derecho 2014, 1–34, 4 (www.raco.cat/index.php/ InDret/article/view/291737). See Federico Della Negra, The Uncertain Development of the Case Law on Consumer Protection in Mortgage Enforcement Proceedings: Sánchez Morcillo and Kušionová, 52 Common Mkt. L. Rev. 1009, 1031 (2015).

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Rather than relying on fundamental principles, AG Saggio in his opinion restored the civil law notion of fairness that was later followed in a body of jurisprudence24 guaranteeing the European social model.25 As he stated in his opinion, “giving the court the power to act of its own motion appears perfectly consistent with the civil-law regime”, and therefore, after a comparison of its application in France and Belgium, Saggio concluded that the judge could declare a term unfair ex-officio.26 The impact of Océano Grupo on the judicial shaping of EU consumer law and thus on the preservation of the European social model grounded in notions of fairness embedded in general principles of civil law is worthy of a second life.27

the legacy of oce´ ano grupo : a missed opportunity for eu law In Océano Groupo Editorial SA v. Rocio Murciano Quintero, two Spanish sellers sued five buyers before the Court of First Instance of Barcelona for unpaid sums due under a contract of adhesion for the sale of encyclopedias on deferred payment terms.28 In April 1998, the Court of First Instance of Barcelona referred the case to the Court of Justice in order to interpret a provision of Directive 93/13/EEC on unfair terms in consumer contracts.29 The preliminary question exposed a tension between a rule of Spanish civil procedure and the substantive law contained in the unfair terms directive.30 The summary proceedings for unpaid sums before the Tribunal of First Instance of Barcelona were based on the exclusive jurisdiction clause contained in the contract of adhesion, which resulted in an “unfair contract term” under the classification of contractual terms adopted by the directive. By means of the preliminary ruling provision, the Spanish judge referred a question to the CJEU.31 Even though Directive 93/13/EEC had not yet been transposed into Spanish law at the time of the contract, this was eventually transposed by 1998 while the proceeding were pending. 24

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See after Océano, Cofidis, Caro Mostaza, Asturcom, Banesto and JM Ferna´ndez Seijo, La defensa de los consumidores en las ejecuciones hipotecarias, Barcelona (2013). See Daniela Caruso, Fairness at a Time if Perplexity: The Civil Law Principle of Fairness in the Court of Justice of the European Union, Forthcoming; Boston Univ. School of Law, Public Law Research Paper. Available at SSRN: http://ssrn.com/abstract=2692070 See AG Saggio Opinion, paragraph 25 footnote 11 pp. I-4952-3. See Hans-W. Micklitz (ed), The Many Concepts of Social Justice in European Private Law (2011). Océano Grupo, at I-4941. See Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts. 31 Océano Grupo, at I-4972, paragraph 19. Id., at I-4942, 1119.

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The Court allowed the Spanish judge to declare the term void of its own motion setting aside the argument that was made by the sellers that this should be a matter of internal law only. According to AG Saggio, granting the power to the domestic judge to declare of its own motion a contract term unfair “falls squarely within the general context of the special protection that the Directive is intended to provide”.32 Along the same line, the Court recognized that it would have been paradoxical to oblige consumers to accept the jurisdiction of the Tribunal in Barcelona in order to prove that this had no jurisdiction. The Court’s judgment relying on the effectives of EU law enabled domestic tribunals to actively intervene in determining the unfairness of contractual terms by holding that the judge, rather than declining its jurisdiction, should “favour” such an interpretation and bring on its own motion the incompatibility between the contractual terms and the unfair terms directive.33 Towards the end of his Opinion AG Saggio examined the power of exclusionary effect of EU directives which have not yet been transposed as a way to circumvent the limit created by the Court to the direct effect of EU directives vis-à-vis private individuals, namely their horizontal dimension.34 In limiting the expansion of horizontal direct effect of the directives, the Court kept alive, in a pre-realist manner, an artificial public/private distinction in the evolution of the doctrine of direct effect.35 According to Saggio, the exclusionary effect, as opposed to the substitution effect of a directive not yet transposed, which stems from the duty of cooperation between Member States in Article 4,3 TEU should come in consideration in all types of disputes, including the ones between private parties.36 While the Court did not follow the last part of Saggio’s Opinion offering a doctrinal reconciliation between the lack of horizontal direct effect of directives and their effective remedy in private disputes, some scholars acutely pointed out this careful avoidance.37

32 33 34

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See AG Saggio Opinion, paragraph 26 pp. I-4953. Océano Grupo, at I-4975, paragraph 32. See C- 152/84, Marshall, in Racc. CG, 1986, p. 723, paragraph 48;14 July 1994, causa C-91/92, Faccini Dori, ivi, 1994, p. i-3325, punto 20, e 7 january 2004, C-201/02, Wells, ivi, 2004, p. i-723, paragraph 56. See Roberto Mastroianni, On the Distinction Between Vertical and Horizontal Direct Effects of Community Directives: What Role for the Principle of Equality? 5 European Public Law 417 (1999). See Case C-476/11 HK Denmark v. Experian, Judgment of 26 September 2013. See AG Saggio Opinion, paragraph 38 pp. I-4961. See Tim Corthaut, Joined Cases C-240/98 to C-244/98 Oceano Grupo Editorial SA v. Rocio Murciano Quintero and Salvat Editore SA v. Jose M. Sanchez Alcon Prades et al., 27 June 2000, [2000] ECR I-4941, Case C-215/97 Barbara Bellone v. Yokohama SpA, 29 January 1998, [1998] ECR I-2191, Case C-456/98 Centrosteel Srl v. Adipol GmbH, 13 July 2000, [2000] ECR I-6007; 8 Colum. J. Eur. L. 293 (2002).

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Over the past twenty years, the doctrinal question of the horizontal direct effect of EU directives has remained an obstacle, while also creating deep concern among European lawyers interested in the relation between fundamental rights and private law. If in the 1990s the Court was adamant that directives may not have horizontal direct effect so that these could not create individual rights protected in their domestic legal order nor set aside domestic laws when not yet transposed, the CJEU opened new inroads through creative yet ambiguous doctrines while its jurisprudence on fundamental rights was becoming more substantial.38 In doing so the Court developed of at least two parallel doctrines to solve a question that Océano Grupo could have possibly erased from the Court’s docket under the presumption of protecting the effectiveness and uniformity of EU law.39 First, it created the ‘incidental direct effect’ doctrine that applied to triangular situations in which a dispute between two parties affects the rights of a third party that can invoke the directive as a shield against litigation.40 However if individuals could sue a State, the directive can not impose obligations on private actors.41 Through a second strategy, the Court developed the doctrine of ‘indirect effect’ that has ensured the application of incorrectly or non-transposed directives.42 Damian Chalmers has shown how British courts have deployed the doctrine of indirect effect more often than the doctrine of direct effect, thus requiring that the application of ambiguous national law transposing a directive should be done in light of the latter.43 But the doctrine of indirect effect can leave individuals who have no domestic measure to interpret, even when granted a right by a EU directive, without protection. In these circumstances, the CJEU has found that in flagrant violation of fundamental rights the national provision should be set aside or excluded in light of general principles of EU law.44 Unable to develop a more linear jurisprudence on the doctrine of horizontal direct effect of EU directive, the Court resolved institutional and federal 38

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See Eleanor Spaventa, Fundamental Rights in the European Union, in European Union Law (C. Barnard & Peers eds. 2014). See Rodin, supra note 7, p. 497. See Case C-443/98 Unilever [2000] ECR I-7535. Joined Cases C-152/07 to 154/07 Arcor AG & Co., Communication Services TELE2 GmbH and Firma 01051 Telekom GmbH [2008] E.C.R. I-05959 and Case C-194/94 CIA Security International [1996] ECR I-2201. See Case 152/84 Marshall [1986] ECR 723. See Case 14/38 Von Colson and Kamann [1984] ECR 1891 at paragraph 26. See Damian Chalmers, The Positioning of EU Judicial Politics within the United Kingdom (2000) 23 WEP 169. See Case C-144/04 Werner Mangold [2005] ECR I-9981 and Case 555/07 Kücükdeveci 2010] E.C.R. I-00365 at paragraph 51.

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tensions by maintaining the public-private distinction in EU law. As Justice Rodin put it, “A great deal of judicial effort has been invested in construction and maintenance of that distinction. It is probably nothing wrong to continue to believe that the distinction is justified. Until one day we realize it is not.”45 Claiming that the solution advanced by Saggio’s Opinion in Océano Grupo would have overcome the public-private distinction in EU law would be an overstatement, yet it still might have offered a welcomed opportunity to engage directly with the lack of horizontal direct effect of directives and its convoluted jurisprudence.

the italian judicial elite in luxemburg The eleven judges who formed the chamber of judges on Océano Grupo, at least in their majority view, did not follow Advocate General Saggio’s reasoning, but rather followed his conclusions in their decision delivered on 16 December 1999. The Court preferred to confine itself in recalling the traditional, and probably misplaced, obligation for national courts to interpret national law in a manner that is consistent with the unimplemented directive.46 As a result, the reasoning behind the Océano Grupo judgment remains rather obscure as written by the judge rapporteur Peter Jann, the Austrian member of the Court (from 1995 to 2009). Even more interesting was the consequence of this decision in Spain, where the Spanish juzgado de primeria instancia did rule in favour of the defendants. By order of 14 July 2000, two weeks after the Court’s judgment, he dismissed the cases on grounds of lack of jurisdiction.47 In his opinion, Advocate General Saggio argued for a much more radical solution to interpret the unfair terms in consumer contracts directive by suggesting that the directive had an “exclusionary effect” that empowered national judges to use non-implemented directives to set aside national law because they had superior force as EU law.48 His opinion suggested indirectly moving toward the much-feared application of the doctrine of horizontal direct effect of the directive, thus eliminating a legal fiction that undermined the effectiveness of EU law. If the move to eliminate the formalist dichotomy between horizontal and vertical effects of EU directive was clearly prominent in the Court, this 45 47 48

46 See Rodin, supra note 7. See Océano Grupo, p. I-4975, at paragraph 30. See ADO DE1’INSTANCIAN 35 BARCELONA COGNICIONW 618197-D. See AG Saggio Opinion supra note 8, paragraph 27: “the national procedural provisions which preclude such as assessment should therefore be disapplied by the court”, p. I-4953.

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doctrine, rather than clearly emerging from Océano Grupo, and then the wellknown Mangold judgment, became rather a byzantine exercise that never eliminated the artificial distinction in EU law.49 AG Saggio’s attempt to challenge the doctrine of the lack of horizontal direct effect of directives was followed soon after in Luxemburg v. Linster, decided on January 2000.50 The opinion of the Advocate General Philippe Léger51 on Linster shows a similar position to the one expressed by AG Saggio’s opinion in a case involving the taking of some private properties for the construction of a highway in Luxemburg. In Linster AG Léger explained that even though a directive was not yet implemented by a Member State, the national judges would be empowered to set aside the conflicting legislation in light of the goals mandated by the directive.52 Antonio Saggio was well known and respected in Luxembourg, where he had been President of the Court of First Instance from 18 September 1995 to 4 March 1998. However, Saggio’s short tenure at the Court of Justice from 5 March 1998 to 6 October 2000 as Advocate General, replacing Giuseppe Tesauro, who was nominated as the head of the newly created Italian Antitrust Authority, did not help further his long-term goals at the Court. The claim that AG Saggio made on the implicit promotion of the creation of horizontal direct effect by allowing to dis-apply the national law in conflict with the non-transposed EU directive was later followed by two other prominent Advocate Generals: Francis G. Jacobs, at the Court from 1988 to 2006; and Antonio Tizzano, who replaced Saggio in 2000 who later on became a member of the Court of Justice in 2006 and vice-president in 2015. Even though AG Saggio’s opinion was more influential for the Court decision, what is very interesting is the intense advocacy work behind the scenes, in both formal and informal settings pursued by his référendaires, as well as their scholarly work geared to influence future decisions.53 For instance, the

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See Craig and De Burca, EU Law, Texts, Cases and Materials, especially the changes on this topic from 8th to 9th edition trying to map not without difficulty the indirect horizontal effect and the transversal direct effect of European directives for lack of better terms. See Case C-287/98 Linster and Others [2000] ECR I-6917. The French AG Philippe Leger [1994–2006] replaced by Mr Yves Bot, see N. Burrows and R. Greaves, The Advocate General and EC Law (2007). See Opinion of AG Léger in Case C-287/98, Linster [2000] ECR I-6917, and for a comment distinguishing exclusionary from direct effect, see Koen Lenaerts and Tim Corthaut, Of birds and hedges: The role of primacy in invoking norms of EU law, 31 EL Rev. (2006). See Mathilde Cohen’s chapter in this volume, Judges or Hostages? The Bureaucratization of the Court of Justice of the European Union and the European Court of Human Rights and Angela Huyue Zhang, The Faceless Court (2015). King’s College London Law School Research Paper No. 2015–45. Available at SSRN: http://ssrn.com/abstract=2640861.

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référendaires at the Court who were selected by either Antonio Saggio or Giuseppe Tesauro before his imminent nomination to the Italian Antitrust Authority were ambitious and committed European lawyers. Amongst the référendaires of the two judges, Massimo Condinanzi (who later became a professor of EU law at the University Statale of Milan), Roberto Mastroianni (who also became a professor of EU law at the University Federico II of Naples) and finally Celestina Iannone (who is still working for the CJEU in Luxemburg). Other Italian référendaires included Paola Mori, who worked for Advocate General Antonio Tizzano between 2000 and 2001 and became professor of international and EU law at the University of Catanzaro. The active work behind the scenes of the référendaires was consistent in creating strong ties between the Advocate General and the judges at the Court. They made sure that other référendaires were informed and possibly persuaded about the judicial innovation strategies proposed by the AG and thus informed their respective judges. For example, référendaires were in constant contact in Luxemburg through lunches at the cafeteria, evening outings, and even soccer games to exchange work-related information. Océano Grupo is therefore applauded as an example that consumer protection has its teeth in EU law, rather than a missed opportunity for greater European integration or more ambitiously as an opportunity to guarantee European statutory protections to private litigants. Perhaps, it was a missed opportunity to participate in a global dialogue to think creatively on how constitutional courts should intervene to modify private legal regimes in two ways: preventing individuals form being deprived from their rights or not being protected by fundamental and constitutional principles existing in their legal orders.

oce´ ano grupo in the european private law consciousness In the newly formed European private law consciousness, some lawyers envisioned contract law as a set of market-oriented informational measures, aiming to extend party autonomy. They welcomed the harmonization of contract law characterized by negative integration. In this context Océano Grupo was decided right at the time of the formation of this politically divisive academic environment so it was perceived through different lenses in either camp.54 54

See Fernanda Nicola, Transatlanticism: Constitutional Asymmetry and Selective Reception of U.S. Law and Economics in the Formation of European Private Law, 16 Cardozo J. Int’l & Comp. L. 87 (2008).

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On one hand of the political spectrum, neo-liberal jurists advocated for greater efficiency of the internal market while they started opposing the “forced harmonization” of contract law in Europe.55 They supported greater diversity amongst private law regimes rather than harmonization projects and justified the pluralism of national contract laws by means of interpretation of the subsidiarity principle.56 In adopting US mainstream law and economics insights, neo-liberal jurists attacked welfare provisions contained in European directives.57 They deployed public choice rationales to undermine the goals of the Unfair Terms Directive, which “may cause inefficiencies rather than curing them”.58 Although the Directive aimed to protect consumers against unfairness, they argued that in reality it created potential inefficiencies, thus creating negative welfare implications.59 In criticizing the institutional changes triggered by the Unfair Terms Directive, neo-liberal scholars deployed the well-known US legal economist Mitchell Polinsky’s view to argue that the increased discretion of judges deciding on the unfairness of the terms would limit the autonomy of private parties to achieve an efficient solution.60 They claimed that since efficiency provides objectivity, this is a “technical everyday problem solving” tool that keeps “political disagreements outside the core” of scholarly fields.61 According to these jurists, economic redistribution, which is inherently political, should remain outside of both the sphere of judicial interpretation of private law. Along these lines the interpretation of EU directives by courts should be

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See Roger Van den Bergh, Forced Harmonization of Contract Law in Europe: Not to Be Continued, in An Academic Green Paper on European contract law 249 (Stefan Grundmann & Jules Stuyck eds. 2002). See Roger Van den Bergh, The Subsidiarity Principle in European Community Law: Some Insights from Law and Economics 1.4 Maastricht J. Eur. & Comp. L. 337, 339 (1994). Roger Van den Bergh affirmed that Member States should resist the harmonization process because the diversity of contractual regimes improved efficiency within the single market. According to this view, the application of the subsidiarity principle could enhance regulatory competition, reduce transaction costs and satisfy preferences, thus maximizing market efficiency. For a definition of US mainstream law and economics, see Duncan Kennedy, Law and Economics from the Perspective of Critical Legal Studies, 2 The New Palgrave Dictionary of Economics and the Law 465 (P. Newman, ed. 1998). In European private law, see Roberto Pardolesi Clausole Abusive, Pardon Vessatorie: Verso L’attuazione di una Direttiva Abusata, Cardozo Electronic Law Bulletin (1995), www.jus.unitn.it/cardozo/Review/ home.html (attacking the unfair contract terms directive and its “shocking black list of standard forms whose common thread is to shift risks from sellers to buyers.”). See Van den Bergh, supra note 61, at 261. Peter Van Wijck & Jules Theeuwes, Protection against Unfair Contracts: An Economic Analysis of European Regulation, 9 Eur. J. L. & Econ. 73 (2000). See Mitchell Polinsky, An Introduction to Law and Economics (2011). See Ugo Mattei, Comparative Law and Economics 5 (1997).

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guided by efficiency rather than distributive considerations. Thus, while the CJEU can legitimately address efficiency considerations, distributive concerns should be left to Member States’ legislatures. From the opposite ideological perspective, private law scholars conceived of contract law as a social solidarity and welfare-enhancing tool seeking to limit individual freedoms. These scholars argued in favour of a national resistance to Europeanization, thus attacking harmonization to promote national private law traditions.62 Since the Océano Grupo judgment, private lawyers committed to social justice, rather than rejecting Europe tout court, began engaging with European private law by importing foreign consumer protection strategies while searching for new ways to reform for the Commission’s private law agenda. In 2004, the Social Justice Manifesto drafted by Hugh Collins and others focused on the need to secure legitimacy, namely the democratic acceptance of the socio-economic values embedded in the harmonization of private law.63 In this context a civil law tradition inspired by social justice offered a possibility to depart from legal formalism, allowing for a more contextualized and open dialogue about the political stakes of European integration.64 Consumer protection scholars acclaimed Océano Grupo because it was in line with the remedy created by the Unfair Contract Terms directive.65 However, the troublesome aspect of Océano Grupo for others was the disparity between the CJEU, endowed with tremendous powers, and national legislatures that, despite being democratically elected, retained only limited decision-making power over European directives shaping national law.66 Even though Spanish consumers benefitted from Océano Grupo, some argued that the judgment was not significant because the CJEU had not ruled expressly on the substantive unfairness of the term at issue, and was free to decide differently in future cases.67

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See Daniela Caruso, The Missing view of the Cathedral, ELJ (1998); Hugh Collins, Good Faith in European Contract Law, 14 Oxford J. Legal Stud. 229 (1994). See Social Justice in European Contract Law: A Manifesto, 10 EUR. L.J. (2004), at 672. See Martijn W. Hesselink, The New European Legal Culture 72 (2001); Robert W. Gordon, Macaulay, Macheil and the Discovery of Solidarity and Power in Contract Law, 1985 Wisc. L.R. 565 (1985). See, e.g., Steven Weatherill, Can There Be Gammon Interpretation of European Private Law? 31 Ga. J. Int’l & Comp L. 139, 163 (2002). See Peter Roth, What is the Role of the ECJ in EC Private Law? A Comment on the ECJ judgments in Océano Grupo, Freiburger Kommunalbauten, Leitner and Veedfald, 1 Hanse L. Rev. 6 (2005). See Oliver Gerstenberg, ‘Integrity, Anxiety’ and the European Constitutionalization of Private Law, in Europe in Search of ‘Meaning and Purpose’ 107, 148 (Kimmo Nuotio ed. 2004).

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oce´ ano grupo : another missed opportunity for comparative constitutional lawyers The global scholarly context in which the Océano Grupo judgment could have played a role concerns the increasing focus by comparative constitutional lawyers and judges on the role of social and economic rights in constitutional adjudication.68 A subset of these jurists was particularly interested in the application of constitutional rights to private law in the context of market transactions among private individuals including contract and property law. In this respect, the US constitutional model was far from being a leading one due to its state action doctrine69 as opposed to Canadian,70 German,71 Italian72 and South African73 legal systems showcasing a range of different models for the horizontal direct of constitutional law. At the time, debate on the horizontal direct effect of European directives, whether implemented or not, was highly controversial and divisive among European judicial elites.74 In some ways, it reflected a similar divide between private legal orders in domestic civil codes and post–World War II innovative constitutional regimes. Both were concerned with the clash between constitutional rights and private law – a clash that some national Constitutional courts had resolved through different compromises in the 1950s such as the constitutionalization of private law in Italy or the ‘Drittwirkung’ in Germany.75 Even though the European Court of Justice jurisprudence was not unknown in this debate through cases such as Walrave and Defrenne

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See Katharine G. Young. Constituting Economic and Social Rights (2012) making no reference to the CJEU. See Murray Hunt, The “Horizontal Effect” of the Human Rights Act 1998, Public Law 423, characterizing the United States as a vertical model, as opposed to Canada. For a counterperspective showing that the US constitutional system is more of a horizontal model through a functionalist comparative analysis, see Stephen Gardbaum, supra note 19 at 389. See Hunt, supra 74. See Peter E. Quint, Free Speech and Private Law in German Constitutional Theory, 48 Md L. Rev. 247, 264 (1989). See Guido Alpa, The Constitutionalization of Private Law in Italy, 2 Oreg. Rev. Int’l L 83 (2000). See Karl Klare and Dennis Davis, Transformative Constitutionalism and the Common and Customary Law 26.3 South African Journal on Human Rights 403 (2010). See Bill Davies and Morten Rasmussen, From International Law to a European Rechtsgemeinschaft: Towards a New History of European Law, 1950–1979 in Institutions and Dynamics of the European Community, 1973–83 (Johnny Laursen, ed. 2014) at 122–24. See Guido Alpa, supra note 74 and Kenneth M. Lewan, The Significance of constitutional Rights for Private Law: Theory and Practice in West Germany, 17 Int. & Comp. L.Q. 571, 599 (1968).

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applying the fundamental principle of non-discrimination enshrined in the Treaty on private parties, the CJEU was seldom at the centre of their attention.76 Scholars have shown how since the 1990s constitutional courts watched and learned from each other in a way that fosters judicial dialogue and migration of ideas among transnational regional courts (CJEU, ECtHR) and constitutional or supreme courts.77 Yet the lesson learnt from the growing scholarship on comparative constitutional law is that it created false assumptions that should be better contextualized especially with regards to the horizontal effect of constitutional rights.78 For instance, in monitoring these developments, a newly created South African Constitutional Court was in search of original legal doctrines that would allow judges to intervene in the old common law still containing many discriminatory provisions well entrenched since the apartheid regime. In this global context in which there was a growing sharing of constitutional ideas and practices, Océano Grupo represented a missed opportunity for the CJEU to position itself in this emerging dialogue and to stir the interest among constitutional lawyers in EU law. Perhaps Océano Grupo could have positioned the CJEU not only as attempting to overcome the horizontal-vertical distinction in EU law but also to openly showing its commitment to socio-economic rights. Globally, the Court could have benefitted more from welfarist orientation in its jurisprudence, as it was under attack, not so much because of its antimajoritarian role, but more broadly for being part of the Brussels’ technocracy tainted by the democratic deficit. Rather, Océano Grupo remains a landmark decision demonstrating the transatlantic support for consumer protection initiatives in the European internal market, asserting consumer rights through contract, tort and competition law.79 If Océano Grupo became an important victory for consumer protection in Europe, as if the lessons by Ralph Nader finally crossed the Atlantic, the judgment, however, remained a missed opportunity to further the constitutionalization or Europeanization of private law.80 Within the scholarly debate addressing the constitutionalization of private law, Océano Grupo provided

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See Stephen Gardbaum, supra note 19 mentioning briefly the CJEU at 393. See Sujit Choudhry, The Migration of Constitutional Ideas (2010) and for a story on the migration of legal ideas, see Ioanna Tourkochoriti, Chapter 22 in this volume. See Gardbaum, supra note 19. See Océano Grupo, Cofidis, Caro Mostaza, Asturcom, Banesto Leitner, Alpine Investments. See Hans Micklitz, Constitutionalization of European Private Law (2014).

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great expectations in the hope that the Court would go beyond the boundaries of the limitations established by the non-existence of a horizontal direct effect of directives.

a second life for oce´ ano grupo in the spanish housing mortgage crisis The disappointment felt by constitutionalists was not the only negative reaction brought by Océano Grupo. Experts in private law did not spare their criticism either. Allowing, as the CJEU did, a national judge to set aside “of its own motion” an exclusive jurisdiction clause contained in a consumer contract was seen as an undue interference in matters relating to civil procedure, an area considered to fall in the sole competence of the Member States.81 Up until Océano Grupo, the national courts lived under the cozy assumption that their domestic rules of procedures were protected by the so-called principle of the procedural autonomy of the Member States. According to this principle, as stated in an abundant case law, “in the absence of [Union] rules in the field, it is for the domestic legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from [Union] law.”82 This wide-reaching national procedural autonomy is only restricted by two (sub)principles: the principles of equivalence and effectiveness. The first principle requires that the national rules of procedure rules are not less favourable than those governing similar domestic actions. According to the second principle, such rules must not render virtually impossible or excessively difficult the exercise of rights conferred by EU law.83 In several Member States, such as France, Germany, The Netherlands and Spain, a traditionally prevailing rule was (and, to a large extent, still is) that, in civil proceedings, a court was not allowed to raise points of law or facts of its own motion.84 In France and in Spain, the highest courts, the Cour de 81

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On this aspect, the Court followed the proposals made by AG Saggio at paragraph 23–26 of his Opinion. See e.g. Case C-312/93 Peterbroeck [1995] ECR I-4599, at paragraph 12; Joined Cases C-430/93 and C-431/93 Van Schijndel [1995] ECR I-4705, at paragraph 17. Ibid. These principles were restated again in the post Océano Grupo in e.g. Joined Cases C-222/05 to C-225/05 van der Weerd [2007] ECR I-4233; Joined Cases C-317–320/08 Alassini [2010] ECR I-2213. Interestingly Italy took in the context of transposition of the Unfair Terms Directive a different approach. As AG Saggio (himself a former judge at the Italian Corte di cassazione) pointed out

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cassation and the Tribunal Supremo, took notoriously a very restrictive view as to the circumstances in which a lower court could depart from its neutrality and consider ex officio a point of law that had not been expressly raised by a party. Actually, in Van Schijndel, the CJEU accepted that parties can take the initiative in a civil suit, and that the court being able to act of its own motion only in exceptional cases reflects “conceptions prevailing in most of the Member States”.85 The Unfair Terms Directive does not establish whether national courts are allowed or even required to review the unfairness of a term when the consumer did not raise the issue. Thus, the ruling in Océano Grupo, according to which “the protection provided by the Directive entails the national court being able to determine of its own motion whether a term of a contract before it is unfair when making its preliminary assessment as to whether a claim should be allowed to proceed before the national courts,”86 was perceived by many scholars and senior judges as a breach of tradition and an unwarranted assault on domestic procedural rules. In fact, it was seen an act of “fleeting boldness”87 which raised an “uproar”.88 It was, however, greeted as wonderful news by the judges sitting on lower courts, those dealing with petty civil cases, who had no power but to grant the applications filed by big companies and to issue enforceable orders against defaulting consumers, without being able to examine, at any stage of the proceedings, any point of defence which, although obvious, was not specifically raised before them. The referring Spanish judge, José María Fernández Seijo, judge of the Juzgado de Primera Instancia N 35 de Barcelona, was one of them. In a book published in France in the 1990s, which found a large audience among a new generation of judges, a talented author told the story of Etienne Rigal, a French junior judge much aware of these problems. His interest rose at once as he read about the decision of the CJEU in Océano Grupo. On the basis of this ruling, he designed a successful strategy to escape the restrictions

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in footnote 11 of his Opinion, the amended version of Article 1469d of the Italian Civil Code stated that unfair terms are “ineffective” and that their ineffectiveness “may be raised of its own motion by the court”. At paragraph 21. The Court accepted that such a principle “safeguards the rights of the defence” and “ensures proper conduct of proceedings by, in particular, protecting them from the delays inherent in examination of new pleas.” 87 At paragraph 29. Stephen Weatherill, EU Consumer Law and Policy 157 (2013). Norbert Reich, Hans-W. Micklitz, Peter Rott & Klaus Tonner, European Consumer Law 151 (2014).

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imposed by the French supreme court, the Cour de cassation, and to ensure that consumers do receive full judicial protection.89 This French judge paved the way to the next case in which the CJEU reiterated its ruling. His application for a preliminary ruling in Cofidis90 gave the CJEU the opportunity to make clear that its previous ruling was not restricted to jurisdiction clauses, as the French government pleaded,91 but should be understood as applying to all sorts of unfair terms, such as financial clauses, which can be included in consumer contracts.92 In latter cases, the need for ex officio control as affirmed in Océano Grupo has been reiterated in relation with inter alia arbitration clauses,93 penalty clauses,94 terms fixing the consequences of default95 or the conditions for price increase.96 Simultaneously, the CJEU had to clarify a question which had been previously raised by scholars: do national courts have the power or a duty to raise the issue of unfairness of a contract term of their own initiative?97 In Océano Grupo, the Court stressed the need for protection of the weaker party: “the system of protection introduced by the [Unfair Contract Terms] Directive 89

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Lives Other Than My Own, by Emmanuel Carrère (Author) and Linda Coverdale (Translator), 2011. The book inspired a movie (“Toutes nos envies.” Dir. Philippe Lioret, Other Angle Pictures, 2010. Film) starring Vincent Lindon in the role of the judge. Case C-473/00, Cofidis [2002] ECR I-10898. The French government relied on a narrow lecture of paragraph 29 of the judgment in Océano Grupo and claimed that a review ex officio should only be allowed “when the national court makes a preliminary assessment as to whether a claim should be allowed to proceed before it.” In addition, the CJEU, who had previously ruled that limitation periods were covered by the principle of procedural autonomy, held in Cofidis that the French rule setting a two-year limitation period on expiry of which it was no longer possible for the courts to find of their own motion that a contract term was unfair had to be set aside since it was liable to affect the effectiveness of the protection intended by the Directive. See e.g. Jacobien W. Rutgers, Cases: ECJ ¬ Océano Grupo & Cofidis, 1 European Review of Contract Law 87–96 (2005). Case C-168/05, Mostaza Claro [2006] ECR I-10421; Case C-470/12 Pohotovost’, EU:C:2014:101. In Case C-40/08 Asturcom Telecomunicaciones [2009] ECR I-957, the protection conferred by the Unfair Terms Directive reached its limits. Ruling on the impact that the principle of effectiveness could have upon the finality of an arbitration award, the Court held that this principle cannot be stretched so far as to mean that a national court is required “to make up fully for the total inertia on the part of the consumer” and to set aside an arbitration award which became final. Case C-618/10 Banco Español de Crédito, EU: C: 2012: 349 (personal loan); Case C-488/11 Asbeek Brusse and de Man Garabito, EU: C: 2013: 341 (tenancy agreement). See e.g. Case C-618/10 Banco Español de Crédito, EU: C: 2012: 349 (personal loan); Case C-415/11, Aziz, EU:C:2013:164, and Case C-169/14 Sánchez Morcillo and Abril García, EU: C:2014:2099 (both concerning mortgage loans). Case C-472/10 Invitel, EU:C:2012:24 (telephone subscription contract); Case C-26/13 Kásler and Káslerné Rábai, EU:C:2014:282 (mortgage loan). Simon Whittaker, Judicial Interventionism and Consumer Contracts, 117 The Law Quarterly Review 215–20, 217 (2001).

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is based on the idea that the consumer is in a weak position vis-à-vis the seller or supplier, as regards both his bargaining power and his level of knowledge.”98 In later cases, the Court referred also to the nature and importance of the public interest that is served by the Directive to justify an ex officio role by the courts: the Directive is “essential to the accomplishment of the tasks entrusted to the Community and, in particular, to raising the standard of living and the quality of life in its territory”.99 On the basis of this dual justification it seemed logical that the role of the national courts could not be limited to a mere discretion to review the possible unfairness of a contractual term. The CJEU came quickly to this conclusion and ruled that the Directive “requires,” rather than simply empowers, judges to scrutinize the fairness of a term of their own motion.100 In Pannon, after referring to both Océano Grupo and Mostaza Claro, the Court expressly requalified the role of a national court from “power” to “duty”: “the role thus attributed to the national court by [EU] law in this area is not limited to a mere power to rule on the possible unfairness of a contractual term, but also consists of the obligation to examine that issue of its own motion, where it has available to it the legal and factual elements necessary for that task,”101 a step which received mixed comments.102 Unimpressed by the critics, the CJEU went ahead in Pénzugyi Lízing, where it took pains to explain the steps that a national court has to take.103 When it appears from the overall factual information available to him that a dispute might fall in the scope of the Unfair Contract Terms Directive, the national judge is actually under a duty to investigate ex officio whether the contract has been concluded between a supplier and a consumer and, if so, he is under the duty to assess, of his own motion, whether the term relied upon by the supplier might be qualified as unfair.104 As expected, this “obligation to investigate” was received with a considerable amount of criticism from the legal scholars, mainly focused on the ever-growing difficulty to reconcile this far-reaching duty with the principle of procedural autonomy of the Member States.105

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99 At paragraph 25. Case C-168/05, Mostaza Claro [2006] ECR I-10421, at paragraph 37. 101 Ibid. at paragraph 38. Case C-243/08 Pannon GSM [2009] ECR I-4713, at paragraph 32. Jules Stuyck, 47 Common Market Law Review 879–98, at 891. Case C-137/08 VB Pénzügyi Lízing [2010] ECR I-10847, at paragraph 50–52. The Court ignored the arguments set at paragraphs 107–10 of AG Trstenjak’s Opinion, who, with reference to the principle of party autonomy in the civil procedures of the Member States, had argued that national courts are not required to determine the legal and factual circumstances needed to conduct their examination. See Verica Trstenjak, Procedural Aspects of European Consumer Protection Law and the Case Law of the CJEU, 21 European Review of Private Law 451–77, at 470 (2013).

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Simultaneously, the Court made clear that the procedural obligations imposed on the national judge should apply without regard to the type of proceedings pending before him:106 an ex officio review has to take place in an action for an injunction brought by a public authority,107 in a judicial order for payment procedure108 or in enforcement proceedings.109 It should also take place in insolvency proceedings.110 The logic of Océano Grupo led to further developments. To ensure the protection of the weaker party, the Court extended the ex officio application of EU law to substantive provisions embedded in other directives aiming at protecting the consumer. It thus affirmed the power of national courts to apply to their own motion national provisions transposing the right of the consumer to cancel the contract conferred by the Doorstep Selling Directive,111 or implementing the remedies which the consumer enjoys against the grantor of credit under the Consumer Credit Directive,112 or against the seller under the Consumer Sales Warranty Directive.113 The activism which the national judge is required to demonstrate is balanced by the principle of audi alteram partem, which is part of the rights of defence and which is binding on a national court when implementing EU law. Thus, where a national court finds, following an assessment made of its own motion, that a contract term is unfair, it is required to inform the parties of that finding and to invite them to set out their views on that matter.114 Océano Grupo and the follow-up references are now settled case law, officially based on the principle of effectiveness, the classic limitation on the procedural autonomy of the Member States. Yet it cannot be denied that the test applied in the field of consumer law is much more stringent than in other

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In Case C-243/08 Pannon GSM [2009] ECR I-4713, at paragraph 34, the Court held that the specific characteristics of the procedure which takes place under national law are not a factor which is liable to affect the legal protection which the consumer must benefit under the Directive. 107 Case C-472/10, Invitel, EU:C:2012:24. 108 Case C-618/10, Banco Español de Crédito, EU:C:2012:349. 109 Case C-415/11, Aziz, EU:C:2013:164; Case C-169/14, Sánchez Morcillo and Abril García, EU: C:2014:2099. 110 Case C-377/14, Radlinger and Radlingerová, EU:C:2016:283. 111 Case C-227/08 Martín Martín [2009] ECR I-11939. 112 Case C-429/05 Rampion and Godard [2007] ECR I-8017. 113 Case C-32/12 Duarte Hueros, EU:C:2013:637; Sanne Jansen, Price Reduction as a Consumer Sales Remedy and the Powers of National Courts, 51 Common Market Law Review 975–92 (2014). Case C-497/13 Faber, EU:C:2015:357; Rupprecht Podszun, Procedural Autonomy and Effective Consumer Protection in Sale of Goods Liability: Easing the Burden for Consumers, 4 Journal of European Consumer and Market Law 149–53 (2015). 114 Case C-472/11 Banif Plus Bank, EU:C:2013:88, at paragraph 29–31.

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areas of EU law. In truth, the Océano Grupo line, developed at a time when the Treaty did not provide a legal basis for the adoption of comprehensive provisions in the field of procedural law,115 is an exception116 based on the premise that the protection of the consumer as a weaker party may only be guaranteed “by positive action unconnected with the actual parties to the contract”.117 Recently, the social relevance of the Océano Grupo line appeared clearly in the references that came to the Court in the wake of the financial crisis. The severe economic crisis experienced after 2008 hit several Member States such as Spain particularly hard, where the housing market experienced an explosion of mortgage defaults and foreclosures.118 In Aziz, the CJEU was called upon to assess whether the Spanish system of mortgage enforcement procedure gave the consumers the protection they were entitled to under the Unfair Terms Directive. The referring judge also asked the Court to give the criteria for assessing the fairness of three specific types of clauses (acceleration clauses for events of default, setting of default interest rates and unilateral quantification of variable interest). Clearly, this was “not just a case” – it was “a test case, one where the CJEU [was] faced with the social and the societal dimension of the current economic crisis.”119 The answer of the CJEU amounted to an “earthquake”.120 The Court held that the Spanish procedural rules impaired the protection intended by the Directive. On one hand, in the framework of enforcement proceedings, an objection on the grounds of existence of unfair terms in the contract was not possible. On the other hand, a court hearing in parallel declaratory proceedings a claim of unfairness brought by the consumer could not grant interim relief capable of staying or terminating the enforcement proceedings.121 As to the assessment of fairness, the Court, though cautious to leave the final decision to the national judge,122 accepted to give him some concrete 115

Trstenjak, supra note 110, at 453. At paragraph 62 of her Opinion in Case C-497/13 Faber, EU:C:2015:357, AG Sharpston refers to this line as a “separate” case law. See also Koen Lenaerts, Ignace Maselis & Kathleen Gutman, EU Procedural Law (2014), paragraph 4.41. 117 118 Océano Grupo, at paragraph 27. Pomar and Lyczkowska, supra note 22 at 5. 119 Hans-W. Micklitz, Unfair Contract Terms – Public Interest Litigation before European Courts, in Landmark Cases of EU Consumer Law – In Honour of Jules Stuyck (2013) 639–52, 650. 120 Anthi Beka, The Ex Officio Doctrine in European Consumer Law: A Procedural Tool reinvigorating Individual Consumer Litigation, p. 341, 417. 121 Case C-415/11, Aziz, at paragraph 57–59. 122 In Océano Grupo, the Court had left the final assessment as to the “unfairness” of the jurisdiction clause to the national judge. In Case C-237/02 Freiburger Kommunalbauten [2004] ECR I-3412, it made clear that the question whether a particular term may be considered as unfair is for the national court, as that court is to decide “in the light of the particular 116

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guidance on how to apply the tests of “significant imbalance” and the “requirement of good faith”.123 Although Aziz only refers to the most recent case law, it is clear from the reasoning that the decision rests on the same pillar as Océano Grupo, namely the need to protect the weaker party through an autonomous EU procedural consumer law. The first noticeable connection is that Antonio Tizzano, who replaced Saggio, was the president of the first chamber as well as the judge rapporteur in Aziz, and perhaps not a coincidence in continuing the legacy of Océano Grupo. In addition, it is of special interest to note that “behind the scenes of both cases” stands, in the role of referring judge, the same figure of Spanish judiciary, José María Fernández Seijo, judge of the Juzgado de lo Mercantil No 3 de Barcelona.124 The outcome in Aziz led to several important reforms of the Spanish enforcement procedures.125 Most significantly it showed to desperate consumers on the brink of losing their home that the Union and the Court, vilified for the austerity policy they impose, do not ignore humanity.126 Such is the legacy of Océano Grupo: it has turned the national courts and its judges into an “active bench,” in charge of protecting the weaker party.127 This militant approach leads to a new question: Should it remain confined to consumer law or extend to other sorts of protective rules such as in environmental or in labour law?128 AG Sharpston has recently made it clear that, in her opinion, the ex officio principle may also have implications for other

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circumstances of the case”. Starting with Pénzügyi Lízing, the CJEU has, however, gradually concretized the abstract concepts used by the Directive. Aziz, at paragraph 73–75. Beka, supra note 125, at 285. The author recalls that, when she asked Judge José María Fernández Seijo which judgment he considered more fundamental for the doctrine of ex officio powers, “he said that he considered it to be Océano Grupo, despite the fact that the second case Aziz, attracted more publicity due to the subprime crisis” (ibid., p. 190 at footnote 951). The first set of reform was clearly insufficient to meet the standard of protection set by the Directive as the Court found in Case C-169/14 Sánchez Morcillo and Abril García, EU: C:2014:2099. More than a dozen references have been lodged by Spanish courts in the aftermath of Aziz. Beka, supra note 125, at 368–69. Ibid. 25. On the activism of lower courts in the field of consumer law, see Hans-W. Micklitz, Judicial Activism of the European Court of Justice and the Development of the European Model in Anti-Discrimination and Consumer Law, in The Role of Courts in Developing a European Social Model (Ulla Neergaard, Ruth Nielsen & Lynn Roseberry eds. 2010), 25–61, 59. See Hans-W. Micklitz, Judicial Activism of the European Court of Justice and the Development of the European Model in Anti-Discrimination and Consumer Law, in The European Court of Justice and the Autonomy of the Member States (H.-W. Micklitz & B. De Witte eds. 2012) at 50, and for a seminal work on this, see Mauro Cappelletti, Giudici Legislatori? (1984).

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parts of EU law which, as consumer law, overtly protect a weaker party in a contractual relationship with another stronger party. As an “obvious example”, she refers to EU law protecting workers.129 It should not take long before the question is raised in a reference for a preliminary ruling, giving the Court the opportunity to set (or not) a new landmark.

conclusion This chapter retells the story of a CJEU case interpreting the directive on Unfair Terms in Consumer contracts by showing its many academic, social and political dimensions. The different contextual histories show how Océano Grupo can hold very different meanings. The story can be told as one of the Italian judicial elites in Luxemburg committed to the elimination the publicprivate distinction still alive in the doctrine of direct effect of EU directives. In a comparative constitutional law context Océano Grupo appears as another missed opportunity for the inclusion of the CJEU in a global judicial dialogue on the constitutionalization of private law. Yet in the aftermath of the financial crisis, especially in the Spanish context where mass evictions due to mortgage default and foreclosures triggered civil outcry, Océano Grupo and its followers became a powerful tool to eliminate unfairness and reestablish social justice in contract law.

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AG Sharpston, Opinion in Case C-497/13 Faber, EU: C: 2015: 357, in footnote 44.

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part v

Beyond the Market Gender and Anti-Discrimination

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21 The Society for the Protection of Unborn Children v. Grogan: Rereading the Case and Retelling the Story of Reproductive Rights in Europe ste´ phanie hennette vauchez

introduction: reframing grogan as a template for judicial reasoning at the european court of justice The 1991 European Court of Justice (“ECJ” or “the Court”) 1991 ruling in The Society for the Protection of Unborn Children v. Grogan1 is often overlooked by reproductive and human rights advocates, as they do not view the ruling as a canon. Commentators have criticized the Court for failing to find that Ireland’s ban on the distribution of information pertaining to abortion clinics in Great Britain was a violation of the law of the European Union (“EU”). Although striking down Ireland’s ban would have been a more powerful message than upholding it, the judges’ reasoning nevertheless laid out important rules of interpretation in favor of women’s reproductive rights. Consequently, this chapter suggests that the ECJ’s ruling in Grogan should be studied under a new light, as the Court, in fact, made a significant contribution to women’s reproductive rights. The context of the case is as follows. Under common law, abortion was a misdemeanor. In 1861, Great Britain’s Offenses Against the Person Act criminalized abortion. The Offenses Against the Persons Act was confirmed in 1979 by the Irish Health Act, which added to the prohibition on abortion in Ireland a prohibition on the sale, importation, manufacture, advertisement and display of abortifacients. In 1983, an amendment to the Irish Constitution was adopted by referendum, according to which, “[t]he State acknowledges the right to life of the unborn and, with due regard to the equal right to life of the mother, guarantees in its laws to respect, and as far as practicable, by its laws to defend and vindicate that right.”2 This set of rules made Ireland the

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Case C-159/90, Society for the Protection of Unborn Children Ireland Ltd. v. Grogan, [1991] E.C.R.4685. Irish Constitution of 1937, art. 40 (text of the 8th amendment of the Constitution Act, 1983).

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country with the strictest abortion regime in Europe, which in turn encouraged some student-run organizations to disseminate information on the ways through which abortions could be legally obtained in Great Britain.3 The Society for the Protection of Unborn Children (“SPUC”), a pro-life organization, sought an injunction against the student-run organizations to prevent them from disseminating that information. The Irish High Court agreed with the students’ claim that the compatibility of such an injunction with EU law was unclear. Consequently, the High Court refused to deliver the injunction and referred the following three questions to the ECJ.4 First, whether an abortion was to be considered a “service” under EU law5; second, whether the injunction was an invalid restriction of the freedom of circulation of services6; and third, whether the restriction was a violation of fundamental rights. This chapter focuses on the ECJ’s answer to the first question as laid out in paragraphs 17–21 of the ruling: 17 According to the first paragraph of [Art. 60], services are to be considered to be “services” within the meaning of the Treaty where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital or persons . . . 18 It must be held that termination of pregnancy, as lawfully practiced in several Member States, is a medical activity which is normally provided for remuneration and may be carried out as part of a professional activity. In any event, the Court has already held in the judgment in Luisi and Carbone . . . that medical activities fall within the scope of Article 60 of the Treaty.

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As abortion became legal in Britain in 1967, a so-called “abortion trail” soon emerged, which is estimated to have led 72,000 Irish women to seek abortion there between 1970 and 1999. See del Moral, Paulina Garcia, and Anne C. Korteweg, “The Sexual Politics of Citizenship and Reproductive Rights in Ireland: From National, International, Supranational and Transnational to Postnational Claims to Membership?” European Journal of Women’s Studies 19 (2012): 413–27, 413, 416. On appeal, however, the Supreme Court maintained the referral but delivered the injunction. At the time of the referral, ”services” were defined by art. 60 of the Treaty; see, now, Consolidated Version of the Treaty of the Functioning of the European Union art. 57 2008 O.J. C 115/47 [hereinafter TFEU]: “Services shall be considered to be ‘services’ within the meaning of the Treaties where they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons. ‘Services’ shall in particular include: (a) activities of an industrial character; (b) activities of a commercial character; (c) activities of craftsmen; (d) activities of the professions.” The relevant provision at the time of the referral was art. 59; see now TFEU art. 56: “Within the framework of the provisions set out below, restrictions on freedom to provide services within the Union shall be prohibited in respect of nationals of Member States who are established in a Member State other than that of the person for whom the services are intended.”

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19 SPUC, however, maintains that the provision of abortion cannot be regarded as being a service, on the grounds that it is grossly immoral and involves the destruction of the life of a human being, namely the unborn child. 20 Whatever the merits of those arguments on the moral plane, they cannot influence the answer to the national court’ s first question. It is not for the Court to substitute its assessment for that of the legislature in those Member States where the activities in question are practised legally. 21 Consequently, the answer to the national court’ s first question must be that medical termination of pregnancy, performed in accordance with the law of the State in which it is carried out, constitutes a service within the meaning of Article 60 of the Treaty.7

In its answer, the Court proceeded to mechanically apply the technical definition of “services” under EU law to abortions. The Court reasoned that because “services” are to be identified whenever normally provided for remuneration and medical activities fall within the scope of then-article 60 of the EC Treaty8 as a matter of principle,9 the termination of pregnancy was a service, insofar as it was lawfully provided in several Member States for remuneration and as part of a professional activity. The Court rejected the moral arguments brought by the SPUC and explicitly stated that such arguments are irrelevant to the “purely” legal answer to the first question.10 The ECJ’s answer to the second and third questions flows logically from the reasoning described earlier. In answering the second question, the Court found the fundamental right of British abortion clinics to provide services was not violated or unduly restricted by the injunction issued by the Irish 7

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Society for the Protection of Unborn Children Ireland v. Grogan, Case C-159/90, [1991] E.C.R. I-04685. Now article 57 of the Treaty on the Functioning of the EU. This had been determined earlier by the Court, see Luisi and Carbone v. Ministero dello Tesoro, Joined Cases 286/82 and 26/83, [1984] E.C.R. 00377, } 16: “It follows that the freedom to provide services includes the freedom, for the recipients of services, to go to another member state in order to receive a service there, without being obstructed by restrictions, even in relation to payments and that tourists, persons receiving medical treatment and persons travelling for the purpose of education or business are to be regarded as recipients of services.” It is worth noting that this position of the Court on morals in legal reasoning is all the more striking given that the AG had been offering a rather different solution. While AG Van Gerven had no doubt that abortion was to fall under the category of services under EC law, he also believed that the freedom of information about services regularly offered under EC law had been infringed upon by the Irish ban. The question for him then, was not whether there had been an infringement, but whether it was a proportional one. He thought it was; and the reason he did was that he insisted that the reasons for the ban were profoundly moral and corresponded to deep concerns that received constitutional protection in Ireland.

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authorities. The ECJ reasoned that the definition of services under EU law is intertwined with the freedom of information pertaining thereto. The injunction, however, only targeted the Irish students’ associations, not the British clinics – and absent any kind of link between the two, the Court could only find that the injunction against the associations did not amount to a violation of the freedom of services to which only the clinics were entitled.11 Encapsulated here are two main features of the Court’s reasoning that I propose to call the “Grogan template” (or “the template”), for, as I later argue, it resonates in subsequent case law. The template’s first feature leads the Court to discard “morals” as an appropriate reference for legal reasoning. Through the template’s second feature, the Court affirms the full relevance of EU legal categories to the matter at stake (in particular, that of “services”) – which leads to the Court fully applying EU law to the particulars of the case. These features have precisely led the Grogan ruling to receive widespread and sometimes fierce criticism. Some authors have focused on its arguably unjustified discarding of moral reasoning12; others have insisted that its judgment on the inapplicability of article 59 was regrettable.13 This chapter does not aim at engaging in these doctrinal discussions of the Grogan case; rather, it purports to underline the unnecessary marginal role the ruling plays in the European laws on abortion. In particular, the Luxemburg court’s refusal to accept moral lines of reasoning even on such a vexed theme as abortion, as well as its choice to consider European law legitimate and relevant to the particular matter rather than defer to the State’s autonomy, could have had a brighter destiny. Indeed, albeit unexpectedly, they affirm women’s reproductive rights. Widening the scope of the inquiry from abortion to other sexual and reproductive justice issues reveals that the Grogan template, whereby the ECJ claims that “morals” are an inappropriate reference for legal reasoning and 11

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The court applied a similar reasoning to answer the third question: the Court could not find that fundamental rights that are protected within the EU legal order were violated by the injunction, in so far as it had previously determined, in its answer to the second question, that the measure at stake (the Irish injunction to students’ associations) lied outside the scope of EU law. Here is not the place to recall the history of the EU’s legal engagement with fundamental rights (their initial absence from the European legal order, the anxieties voiced by several constitutional courts, their progressive incorporation, first throughout the Court’s case law and ultimately in the treaties). Suffice it to say that European institutions and Member States are bound by the respect of the fundamental rights only if and when then either apply or derogate from European law. See, e.g. PhelaN Diarmuid Rossa, “Right to Life of the Unborn v. Promotion of Trade in Services: The ECJ and the Normative Shaping of the EU.” Modern Law Review 55, no. 1 (1992): 670. Hélène Gaudemet-Tallon, Revue Trimestrielle de Droit Européen (1992): 163; Louis Dubouis, Revue de droit sanitaire et social (1992): 48.

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affirms the full relevance and applicability of EU law categories, seems to be consistently applied in several lines of cases on prostitution, assisted reproduction and maybe even in cases regarding the legal status of the embryo. The impetus for this chapter is the growing discomfort with the traditional narrative about this case – and beyond Grogan stricto sensu, about abortion in European law. The dominant version of this narrative is as follows: in its 1991 ruling in Grogan, the ECJ ruled against Irish students’ organization’s right to distribute information about abortion services legally provided in Great Britain. In 1992, however, in Open Door and Dublin Well Women v. Ireland,14 the European Court of Human Rights (“ECtHR”) found that Ireland had violated article 10 of the European Convention on Human Rights’ freedom of expression clause by imposing a total ban on the distribution of that kind of information. In other words, this narrative conveys the unsurprising view that the ECtHR protected fundamental human rights, whereas the ECJ failed to do so. This classic interpretation of what long remained the two leading abortion cases in Europe15 focuses narrowly on the judicial outcomes, insisting that the ECHR found Ireland had breached its European human rights obligations, whereas the ECJ ruled Ireland had acted legally.16 This narrative, however, overlooks the modes of reasoning of both courts, and, as this chapter argues, the two modes of reasoning are of great relevance. This chapter thus focuses on the arguments put forth by each court and unearths the following two major elements: first, the ECtHR said nothing about abortion in its 1992 Open Door ruling; the court reframed the case as strictly and merely a freedom-of-expression case. By contrast, the ECJ said something very important about abortion: it specifically settled the fact that abortion is a service under EU law, and there is no reason to shield abortion away from the correlative constitutional regime of free circulation of information pertaining to services. In addition, it appears that the ECtHR actually deferred to the Irish state and awarded Ireland a wide “margin of appreciation”17 in its 1992 ruling, 14 15

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Case 14234/88, Open Door and Dublin Well Woman v. Ireland, [1992] ECHR 68. Not to mention that they are truly the comparativist’s dream, as these two rulings were delivered by the two European courts only a year apart (October 1991 and October 1992) and stem from the exact same facts (the Irish injunction on students’ associations to stop distributing information about legal abortion in Britain). For the sake of clarity and at the expense of exactitude in the chronology of legal denominations, I shall refer to “EU law” throughout this chapter regardless of the fact that, of course, it was technically EC law that was at stake in the 1991 Grogan decision that is this essay’s starting point. The margin of appreciation is a classic doctrine of ECHR law that was first articulated by the ECtHR in 1976: “The Court points out that the machinery of protection established by the Convention is subsidiary to the national systems safeguarding human rights . . . .

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whereas in the Grogan decision the ECJ affirmed the full-fledged applicability of EU law to the facts of the case. This chapter’s introduction thus outlined the main reasons why the traditional narrative of EU Law on abortion may well be told anew. Part 2 of the chapter argues that the ECJ in 1991 did more for the affirmation of women’s reproductive rights than the ECtHR did in 1992 or ever since for that matter. Part 2 thus contrasts subsequent uses of the Grogan template in Luxembourg with the ways in which it operates in reverse mode in Strasbourg. The fundamental structure of the ECJ and ECtHR case law on issues of sexual and reproductive rights (prostitution, reproductive rights and the legal status of the embryo) is presented here as symmetrical: the ECJ continuously affirms the mechanical applicability of EU law categories to these matters, whereas the ECtHR consistently defers back to the states, therefore limiting the relevance of the ECHR law. Part 3 of this chapter invites the reader to think about the potential meaning and questions raised by this renewed way of telling the story of abortion in the context of EU law. Can it be said that the paradigm of “the market” that dominates the EU legal order does, or has done, a better job at protecting women’s rights than that of “human rights” that dominates the Council of Europe’s? The question thus reframed certainly leads to an “uncomfortable conversation”18 that goes beyond the scope of the present chapter. This chapter does, however, wish to bring in several elements in order to tentatively provide an answer, by insisting on the importance of not shying away from the legal tools and reasoning that the paradigm of the market brings into the conversation on reproductive rights. The feminist critique of the market, including on issues of reproductive justice, has surely put forward compelling reasons for caution. Critical stances, however, on the legal

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The Convention leaves to each Contracting State, in the first place, the task of securing the rights and liberties it enshrines. The institutions created by it make their own contribution to this task but they become involved only through contentious proceedings and once all domestic remedies have been exhausted (Article 26) (art. 26) . . . . These observations apply, notably, to Article 10 para. 2. In particular, it is not possible to find in the domestic law of the various Contracting States a uniform European conception of morals. The view taken by their respective laws of the requirements of morals varies from time to time and from place to place, especially in our era which is characterised by a rapid and far-reaching evolution of opinions on the subject. By reason of their direct and continuous contact with the vital forces of their countries, State authorities are in principle in a better position than the international judge to give an opinion on the exact content of these requirements as well as on the “necessity” of a “restriction” or “penalty” intended to meet them . . . . Consequently, Article 10 para. 2 (art. 10-2) leaves to the Contracting States a margin of appreciation” (ECHR, 7 Dec. 1976, Handyside v. UK, n 5493/72, } 48). Fineman, Martha, Jack Jackson, and Adam Romero, eds. Feminist and Queer Legal Theory: Intmate Encounters, Uncomfortable Conversations. Farnham: Ashgate, 2009.

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instruments and modes of reasoning also accommodates forms of pragmatism. If one views “the law” as an essentially ambivalent instrument that is neither good nor bad, but as an instrument that is used and moved in various directions depending on the context, one need not “believe” in the moral superiority of particular legal grammars, but only realistically assess the best ways of achieving particular goals19 (whatever works).20 From that perspective, it may be argued that advocates of reproductive rights at the European level should pay closer attention to the market’s potential instead of relying essentially on the human rights paradigm through the ECtHR litigation, for indeed a form of “market taboo” may be viewed as having led to arguably disappointing outcomes that are worth unraveling as new directions ought to be taken for better ascertaining reproductive rights in Europe. The goals of this chapter are not normative; its point is not to claim that either model is necessarily superior to the other, either in terms of principle or of outcome. Rather, the goals of this chapter are pragmatic and theoretical. On the pragmatic side, this chapter stresses that the contribution of EU law to reproductive rights is underestimated in academic and activist conversations that mostly focus on other “human rights” identified legal actors (such as the ECtHR). On the theoretical side, this chapter purports to encourage the development of a conversation about market and reproductive rights that remains timid in Europe, with the objective of not being taken by surprise when it inevitably will impose itself on judicial, legislative and political agendas.

reframing the grogan template: retelling and widening the story of reproductive rights in european law Using the Grogan Template in Luxembourg There are convincing arguments to be made in support of the view that European integration and some diversity among national approaches to sensitive topics are compatible.21 The claim that there should be limits to 19

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Only very recently have some authors started to tackle the issue of reproductive justice through the lens of freedoms of circulation; among several papers, see notably: Britta van Beers, “Is Europe ‘Giving in to Baby Markets’? Reproductive Tourism in Europe and the Gradual Erosion of Existing Legal Limits to Reproductive Markets.” Medical Law Review, 23, no. 1, 2015: 103. See, e.g., Dembour, Marie-Benedicte, Who Believes in Human Rights?: Reflections on the European Convention. 1st ed. Cambridge: Cambridge University Press, 2006. See, e.g.., Bruno de Witte, “The Value of Cultural Diversity in European Union Law,”in Protection of Cultural Diversity from a European and International Perspective, edited by H. Schneider and P. Van den Bossche, 219–47. Antwerp: Intersentia, 2008.

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moral integration is a powerful one, and the ways in which it can be related to the wider claim about self-determination that is central to much contemporary political and moral theories makes it all the more compelling.22 However, there is something troubling in the notion that as this claim gains or regains momentum, issues of sexual and reproductive freedoms seem to be at the forefront of the discussion.23 Indeed, contemporary political theory has convincingly argued that concepts of State sovereignty and biopolitics are tightly entangled; the conditions of the production of life are one of the main loci for the constitution and affirmation of political power.24 Additionally, sovereignty has been analyzed as a deeply gendered notion, in both its political and legal dimensions.25 Therefore, any form of “nationalist” return in the process of European integration could hardly be presumed to be a liberating one, but rather a sign of the continued reluctance to truly recognize individual autonomy in the determination of sexual identities and practices and gender roles. In fact, it is striking that the much discussed and alleged comprehensive movement towards globalization of law and the internationalization of legal orders has hardly altered individual legal regimes in the field of human reproduction. Neither the European integration process nor subjection to the ECtHR has allowed Europe (be it the EU or the EC) to affirm itself as the default or main regulatory entity of reproductive issues; it has not ruled out or even dominated other traditional regulations at the national levels. The Irish abortion regime’s steadiness since its initial formulation in 1983 is quite telling in that respect. Twenty-five years after the Grogan and Open Door cases, the status of abortion in Ireland remains essentially unchanged. Admittedly, in July 2013, an Irish Protection of Life During Pregnancy Act was voted into law, which allows abortion when the life of the mother is at risk. Although an important disruption of abortion politics in Ireland, this is merely the legalization of the judicial-borne resolution of 1992

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Floris de Witte, “Sex, Drugs and EU Law: the Recognition of Ethical and Moral Diversity in Europe.” Common Market Law Review 50, no. 6 (2013): 1545. The particularly stimulating paper by Floris de Witte does not, however, circumscribe the plea for judicial restraint in the fields where “morals” are at stake to sexual and reproductive freedoms, since it also examines issues such as drugs policy or the consumption of seal meat. Drawing on the work of Michel Foucault (in particular, Histoire de la sexualité, La volonté de savoir, Gallimard, 1976), see Giorgio Agamben, Homo sacer. Le pouvoir souverain et la vie nue, Seuil, 1998; or Nikolas Rose, The Politics of Life Itself: Biomedicine, Power and Subjectivity in the 21st Century. Princeton: Princeton University Press, 2007. See Hilary Charlesworth and C. M. Chinkin, The Boundaries of International Law: A Feminist Analysis. Executive Park, NY: Juris Publishing, 2000.

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(State v. X case26). Also, there is reason to believe that that the death of 31-year-old Savita Halappanavar in October 2012 (caused by septicemia after she was denied abortion although the fetus she was carrying was unviable) was more instrumental to the reform than either the ECJ or the ECtHR case law. As such, the facts support the idea that first, there has been little evolution of the Irish abortion regime over the past 35 years; and second, such evolution is not clearly linked to the role of transnational and European law. At any rate, regardless of how powerful the calls to limit moral integration may be, they do not seem to have been the natural or dominant trend in the ECJ case law. Rather, quite strikingly, the Court has consistently applied the Grogan template on a whole range of issues related to sexual and reproductive justice. Therefore, the ECJ positively affirmed the reach of EU law rather than receding to national policy choices even on “morally sensitive” issues such as prostitution, assisted reproduction and the legal status of the embryo. On all these issues, the Court affirmed the relevance of EU law categories and crafted European solutions and answers to questions that receive widely discrepant answers at the national levels. In doing so, the Court has systematically repeated the Grogan template, inspired by the idea that “morals” are an inappropriate tool of legal reasoning.27 In the case of prostitution, the ECJ has dealt several times with instances where a Member State tried to either deport or refuse residence and work permits to female prostitutes on the grounds that their “profession” was immoral or to be combated. The ECJ generally adopted the view that a Member State cannot ground its decision on the immorality of prostitution when it does not make prostitution illegal for its own nationals.28 This line of reasoning is firmly grounded in the principle of non-discrimination on the basis of nationality,29 but it also expresses the view that questions of mortality

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Supreme Court (Ireland), 5 March 1992, Attorney General v. X, [1992 No846P]. For a recent account, see Andrea Mulligan, The Right to Travel for Abortion Services: A Case Study in Irish ‘Cross Border Reproductive Care’”, European Journal of Health Law 22, no. 3, 2015: 239. Of course, one should probably not take the Court at its word on this; its discarding of “morals” can well be reframed as a discarding of some morals rather than a value-free mode of reasoning. Adoui & Cornuaille v. Belgium, Joined Cases C-115 and 116/81, [1982] E.C.R. 01665: “A Member State may not, by virtue of the reservation relating to public policy contained in Articles 48 and 56 of the Treaty, expel a national of another Member State from its territory or refuse him access to its territory by reason of conduct which, when attributable to the former State’s own nationals, does not give rise to repressive measures or other genuine and effective measures intended to combat such conduct.” On two grounds: free circulation on workers regardless of nationality since the inception of the EU, as well as the prohibition of discrimination per se (see now TFEU art. 18).

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fall outside of the Court’s jurisdiction. This is particularly explicit in the 2001 Adona Malgorzata Jany ruling, where the Court stated that “[so] far as concerns the question of the immorality of that activity, raised by the referring court, it must also be borne in mind that, as the Court has already held, it is not for the Court to substitute its own assessment for that of the legislatures of the Member States where an allegedly immoral activity is practiced legally.”30 Again, this containment of “morals” at the national level leads the Court to affirm the full applicability of EU legal categories to the matter at stake. In the subsequent paragraphs of the ruling, the Court thus accepts that prostitutes are self-employed persons pursuant to then article 52 of the EC treaty and that prostitution is a service under EU law.31 In the context of assisted reproduction, in the 2008 Sabine Mayr case, the Court highlighted the need to disregard national morals in deciding the extent of the protection offered by EU labour and anti-discrimination laws to a female worker enrolled in an in vitro fertilization (“IVF”) cycle. Sabine Mayr, an employee of a bakery, was dismissed a couple of days after she started her IVF treatment and a few days before the embryos were implanted. She sued her employer, arguing that pregnant workers were protected against dismissal. The national court referred to the ECJ for guidance as to whether Mayr was to be considered pregnant. The ECJ seemed to apply the Grogan template as it affirmed, first, that it was not for the Court to engage in any kind of moral assessment of the practices at stake, and second, that it was to make full use of the relevant EU legal tools and categories.32 The “mechanical” application of EU law that the ECJ proceeded to apply led to astounding results. Although the Court admitted that it was impossible to award to Mayr the protection that EU law offers to pregnant workers (as she was, by no means, pregnant), it nonetheless went out of its way to secure some form of EU protection for the plaintiff.33 The Court invoked proprio motu Directive 76/207 on equal treatment of workers regardless of their sex, and ruled that “dismissal of a female 30

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Aldona Malgorzata Jany & Others v. Staatssecretaris van Justitie, Case C-268/99, [2001] E.C.R. I-08615 } 56. Id. at }}48-49: “[I]t is sufficient to hold that prostitution is an activity by which the provider satisfies a request by the beneficiary in return for consideration without producing or transferring material goods. Consequently, prostitution is a provision of services for remuneration which, as indicated in paragraph 33 above, falls within the concept of economic activities.” Sabine Mayr v. Bäckerei und Konditorei Gerhard Flöckner OHG, Case C-506/06 [2008] E.C.R. I-01017. Id. at } 43: “[E]ven if Directive 92/85 is not applicable ... the fact remains that, in accordance with the case-law of the Court, the Court may deem it necessary to consider provisions of Community law to which the national court has not referred in its question.”

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worker on account of pregnancy, or for a reason essentially based on that state, affects only women and therefore constitutes direct discrimination on the grounds of sex.”34 Because IVF is a treatment that “directly affects only women,” the Court held that “the dismissal of a female worker essentially because she is undergoing that important stage of IVF treatment constitutes direct discrimination on grounds of sex.”35 As to matters related to embryos, in its 2011 Brüstle36 ruling, the ECJ answered a preliminary reference in the field of patent law by providing nothing less than a legal definition of the embryo. Ironically, what constitutional courts, international courts and legislators around the world have been trying to avoid for the past three or four decades has become a field for normative regulation. The Court of Justice of the European Union (“CJEU”) determined that the “human embryo” mentioned under article 6(2)(c) of the 1998 Patents Directive should be interpreted as referring to “any human ovum after fertilization, any non-fertilized human ovum into which the cell nucleus from a mature human cell has been transplanted, and any non-fertilized human ovum whose division and further development have been stimulated by parthenogenesis”.37 It is worth noting that this decision is one in which the Court purports to elaborate on a European autonomous notion of the embryo, a move by which the Court situates itself on the side of activism rather than deferral.38 The Grogan template informs parts of the Court’s reasoning through, in particular, Advocate General Bot’s Opinion. Bot argued that the reasoning he offered was “purely legal in nature”.39 Also, this underlying reliance on the Grogan template surfaces in the ruling itself, where the Court insists that [as] regards the meaning to be given to the concept of ‘human embryo’ set out in Article 6(2)(c) of the Directive, it should be pointed out that, although, the definition of human embryo is a very sensitive social issue in many 34 37 38

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35 36 Id. at } 46. Id. at } 50. Case C-34/10, Oliver Brüstle v Greenpeace eV, [2011] Brüstle v. Greenpeace, Case C-34/10 [2011] E.C.R. I-09821, } 53. The Court has recently qualified its Brüstle ruling: International Stem Cell Corporation v. Comptroller General of Patents, Designs and Trade Marks, Case C-364/13 [2014]. For commentaries on Brüstle, see Stéphanie Hennette Vauchez. “L’embryon de l’Union,”Revue trimestrielle de droit européen, no. 2, 2012: 355; Aurora Plomer, “After Brüstle: EU Accession to the ECHR and the Future of European Patent Law”, Queen Mary Journal 2, 2012: 110–35; Ciara Staunton, “Embryonic Stem Cell Research and the ECJ’s New Found Morality”, Medical Law Review 21, 2013: 310. See Opinion of Advocate General Bot, Brüstle, supra n. 32 at } 45: “The question which the Court is asked is certainly a difficult one. However, it is exclusively legal in nature”; and } 47: “In my view, against this background only legal analyses based on objective scientific information can provide a solution which is likely to be accepted by all the Member States.”

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Member States, marked by their multiple traditions and value systems, the Court is not called upon, by the present order for reference, to broach questions of a medical or ethical nature, but must restrict itself to a legal interpretation of the relevant provisions of the Directive.

The Court even cited its prior Sabine Mayr ruling in support of this line of reasoning.40 In all these cases, the ECJ has thus affirmed the full application of EU legal categories regardless of the sensitivity of the issues at stake: prostitutes are selfemployed workers providing services, IVF treatment gives rise to a protection against workers’ dismissal, and there exists a European autonomous notion of the embryo. In all these instances, instead of yielding to national authorities and qualifications, the Court chose to move forward and affirm the applicability of European law and has allegedly done so by virtue of “pure” legal reasoning and by discarding references to “morals”. Interestingly, this reframing of the ECJ’s case law helps to unearth the fundamental contrast it entertains with ECtHR law. On similar issues in comparable cases, the ECtHR used an approach contrary to this Grogan template. Such approach is more lenient towards morals and gives much more deference to States through the famous margin of appreciation doctrine.

Reversing the Grogan Template in Strasbourg Abortion is probably the topical example that helps to illustrate the opposing approaches of the two European courts. In a 2010 grand chamber ruling, the ECtHR confirmed that the rights to private life under the ECHR’s article 8 “did not encompass” a woman’s right to terminate her pregnancy.41 This position is consistent with the ECtHR’s 1992 ruling42 in the exact ECtHR law counterpart to the ECJ’s Grogan case, where it states that “the protection 40 41

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Brüstle, supra n. 36 at } 30. ECHR, GC, 10 Dec. 2010, A, B and C v. Ireland, 25579/05 } 214: “While Article 8 cannot, accordingly, be interpreted as conferring a right to abortion.” The Court actually even referred to the women’s and the fetus’s interests as “competing interests”, thus acknowledging the fact that they had similar legal weight; see } 213: “The Court has also previously found, citing with approval the case-law of the former Commission, that legislation regulating the interruption of pregnancy touches upon the sphere of the private life of the woman, the Court emphasizing that Article 8 cannot be interpreted as meaning that pregnancy and its termination pertain uniquely to the woman’s private life as, whenever a woman is pregnant, her private life becomes closely connected with the developing fetus. The woman’s right to respect for her private life must be weighed against other competing rights and freedoms invoked including those of the unborn child.” ECHR, 29 Oct. 1992, Open Door and Dublin Well Woman, 14235/88.

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afforded under Irish law to the right to life of the unborn is based on profound moral values”,43 and that Ireland’s abortion regime thus “pursued the legitimate aim of the protection of morals of which the protection in Ireland of the right to life of the unborn is one aspect”.44 Thus, the Strasbourg court chose to insist on the necessity of granting States a “wide margin of appreciation”.45 For the ECtHR, diversity – hence deference to domestic law – is the preferred template of reasoning over uniformity or the affirmation of European law’s reach and applicability.46 Interestingly, the ECtHR’s reliance in this case on the margin-ofappreciation doctrine can be challenged even from a perspective internal to the mainstream justifications of the doctrine itself.47 Indeed, the very applicability of the doctrine to the Grogan case is debatable. According to the ECtHR, States’ margin of appreciation exists when there is no consensus among High Contracting Parties on a given issue. However, even in 1992, it could have been said that there was a consensus in Europe on abortion as access to safe and legal abortions, at least in the early stages of pregnancy, was and still is the dominant norm throughout Europe.48 In fact, in the 2010 ABC v. Ireland case, the ECtHR explicitly acknowledged that fact. It stated that “in the present case . . . the Court considers that there is indeed a consensus amongst a substantial majority of the Contracting States of the Council of Europe towards allowing abortion on broader grounds than accorded under Irish law.”49 The ECtHR decided however that in the particular case, the existence of this consensus was to have no effect and, notably, was not to prevent recourse to the margin-of-appreciation doctrine.50 Moreover, the 43 46

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44 45 Id. at } 63. Id. Id. at } 68. See further id. at } 68: “As the Court has observed before, it is not possible to find in the legal and social orders of the Contracting States a uniform European conception of morals, and the State authorities are, in principle, in a better position than the international judge to give an opinion on the exact content of the requirements of morals as well as on the ‘necessity’ of a ‘restriction’ or ‘penalty’ intended to meet them.” See, e.g., Luzius Wildhaber, Arnaldur Hjartarson & Stephen Donnelly, “No Consensus on Consensus”, Human Rights Law Journal 33 (2013): 248; Yukata Arai Takahashi, “The Margin of Appreciation Doctrine: a Theoretical Analysis of Strasbourg’s Variable Geometry”, in Constituting Europe, The European Court of Human Rights in a National, European and Global Context 62, edited by Andreas Follesdal, Brigit Peters & Geir Ulfstein, Cambridge University Press, 2013. Angela Thompson, “International Protection of Women’s Rights: An Analysis of Open Door Counseling Ltd”, Boston University International Law Journal 12, 1994: 371, especially the section titled “The Margin of Appreciation: Cultural Sensitivity or Gender Bias?” A, B and C v. Ireland, supra n. 36 at } 235. After acknowledging the existence of a consensus (id. at } 235), the Court ruled: “However, the Court does not consider that this consensus decisively narrows the broad margin of appreciation of the State.” Id. at } 236.

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ECtHR hardly substantiated its choice to deprive the existing consensus from its usual effects. Paragraph 236 of the 1992 ruling only affirms, without providing a justification, that “the Court does not consider that this consensus decisively narrows the broad margin of appreciation of the State.”51 Equally interestingly, this approach opposite to the Grogan template seems to underpin the ECtHR’s case law on other topics related to sexual and reproductive justice, as it provides similar outcomes to the application of the template itself and to the ECJ’s position on comparable issues. For instance, the ECtHR refused to draw consequences from emerging consensus among High Contracting Parties on assisted reproductive technologies (“ARTs”), thus maintaining a wide margin of appreciation for States who retain a defiant stance on ARTs.52 The SH v. Austria grand chamber ruling of 2011 is a case in point. In paragraph 96 of that ruling, the ECtHR states that the Court would conclude that there is now a clear trend in the legislation of the Contracting States towards allowing gamete donation for the purpose of IVF, which reflects an emerging European consensus. That emerging consensus is not, however, based on settled and long-standing principles established in the law of the Member States but rather reflects a stage of development within a particularly dynamic field of law and does not decisively narrow the margin of appreciation of the State.53

There are further illustrations of the contrast between the ECJ’s refusal to engage with arguments based on “morals” and the ECtHR’s readiness to embrace them. Both courts’ encounter with the issue of prostitution is telling in that respect. As recalled above, in the 2001 Adona Malgorzata Jany case, the ECJ insisted that the morality and acceptability of prostitution are questions that should remain alien to the European judges, whose task was only to ascertain whether EU law categories (self-employed workers, services) apply to prostitution. The ECJ reaffirmed that the legal status of 51

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It is also worth noting that furthermore, the doctrine largely justifies preserved national sovereignty on reproductive issues and thus restricts international/transnational law’s reach, replicates the gendered dimension of the public/private divide that has been so central to classical political theory, and thus is strongly criticized by feminist theory. Indeed, this application of the margin of appreciation doctrine does transpose the “sanctity” of the “private” home to which women have traditionally been confined in the national context onto that of “domestic law” in the international and supranational context. This is all the more striking that the Court had previously established that “where a particular facet of an individual’s existence or identity is at stake (such as the choice to become a genetic parent) the margin of appreciation accorded to a State will in general be restricted.” See ECHR, GC, 4 Dec. 2007, Dickson v. UK, 44362/04. ECHR, GC, 3 Nov. 2011, S H v. Austria, 57813/00; see Sheelagh McGuinness, “Commentary”, Medical Law Review 21, 2013: 146.

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prostitution is for individual Member States to determine. In contrast, in the 2007 Tremblay case, the ECtHR expressly underlined how complex the issue of prostitution was.54 That court insisted on the lack of consensus among the Council of Europe’s High Contracting Parties55 and paid close attention to the different national regimes. The ECtHR recalled that some countries were abolitionists,56 while others pursued a regulatory approach. The court made a distinction between the countries that ratified the 1949 UN Convention for the Suppression of the Traffic in Persons and of the Exploitation of the Prostitution of Others57 and the countries that had not (including the United Kingdom, Austria, Germany, Russia or Andorra). The ECtHR then held that in its view, prostitution is incompatible with human rights and dignity when it operates under constraint.58 Additionally, it observed that “some consider that prostitution never is freely chosen, but always at least constrained by socioeconomic conditions.”59 All in all, the ECtHR not only made sure to echo the notion that prostitution was a morally dubious activity, but also gave leads as to its own view on the topic, which is that freely chosen prostitution is a myth and all prostitution is traffic in human persons. It is worth noting that this particular question was well beyond the scope of the case in point. The case had been brought by a former prostitute who was alleging that the amount of taxes the French State was requiring her to pay in regards to her (past) prostitutional activity was in fact making it impossible for her to quit. Thus, as the ECtHR acknowledges, the question was not to decide whether prostitution was a violation of article 3 of the ECHR or of the Convention on inhuman or degrading treatment, but whether the particular circumstances of tax collection could be upheld. 54 55

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ECHR, 11 Sept. 2007, Tremblay c. France, 37194/02 Id. at }24 (“Il est manifeste qu’il n’y a pas de consensus européen quant à la qualification de la prostitution en elle-même au regard de l’article 3”). For instance, in France, criminal or other provisions making prostitution illegal have been abolished, and prostitution therefore is not illegal, nor is it controlled or regulated (however, satellite practices such as pimping are criminally sanctioned). G.A. Res. 317 (IV) (2 Dec. 1949). “Whereas prostitution and the accompanying evil of the traffic in persons for the purpose of prostitution are incompatible with the dignity and worth of the human person and endanger the welfare of the individual, the family and the community.” Id. at Preamble. Tremblay, supra n. 49 at } 25: “C’est en revanche avec la plus grande fermeté que la Cour souligne qu’elle juge la prostitution incompatible avec les droits et la dignité de la personne humaine dès lors qu’elle est contrainte.” Id. at } 26: “Il reste que cette question est elle aussi controversée, certains estimant que la prostitution n’est jamais librement consentie mais toujours, au moins, contrainte par les conditions socioéconomiques.”

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new directions for reproductive rights in europe? Regardless of the fact that this tentative reframing of EU law stories on abortion and reproductive rights reveals a limited traction of the human rights paradigm compared to the rather uninhibited application of the market, advocates and activists of reproductive rights in Europe seem to neglect the market and continue to rely essentially on human rights. Feminist scholars in particular have long called for caution as far as the private ordering of justice goes, and much of their contribution remains accurate, including in the field of reproductive services. The following section argues, however, that advocates of reproductive justice need not shy away from the market theory, for facts indicate that it has become a potent operator of contemporary modes of reproduction. Realistic or pragmatic legal reasoning calls for internal observation and analysis of legal instruments and categories upon which the market relies.

Feminist Caution vis-à-vis the Market Feminist theory on the subject at hand has questioned liberalism and viewed it as a potentially deceiving framework for women’s rights.60 The myth of the autonomous rational moral agent of classical political philosophy has been shown to be a profoundly gendered subject. As Carole Pateman writes, it secured a sexual contract that led to women’s exclusion prior to the social contract.61 Formal equality and the “sameness model” may have infused much of the moves towards equality between the sexes in the field of human rights law, but they have also proved deceiving for failing to grasp how differently situated men and women are to start with, thus leading to more radical critiques of human rights62 and, ultimately, the law itself as individualistic and competitive.63 As discussed in the following paragraphs, many of the questions raised by the feminist theory on the stakes associated with the commodification of body parts and services need to be kept in mind

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See, e.g., Jytte Klausen and Charles Maier (eds), Has Liberalism Failed Women? Assuring Equal Representation in Europe and the United States. New York: Palgrave, 2001. Carole Pateman, The Sexual Contract. 1st ed. Stanford: Stanford University Press, 1988. For a panorama of feminist critiques of human rights, see Stephanie Palmer, “Feminism and the Promise of Human Rights: Possibilities and Paradoxes.” In Visible Women: Essays on Feminist Legal Theory and Political Philosophy, edited by S. Palmer and S. James. London: Hart, 2002, p. 92. See, e.g., Carol Smart, Feminism and the Power of the Law, London: Routledge, 1989.

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as they constitute a critical theoretical background against which the CJEU’s alleged ethical neutrality needs to be tested. Concerns related to the commodification of the body are a main way through which feminist scholars have criticized the market theory as applied to the field of reproductive justice. Much of the feminist-inspired agenda of distrust vis-à-vis romanticized accounts of the ways in which “the market” could free us from patriarchy remains accurate. In the mid-1990s, legal theorist Margaret Jane Radin authored important pieces on contested commodities64 and identified human reproduction such as the circulation of sex, children and body parts as central to her investigation. Radin argued that commodification threatens humanist values that are best defended by understanding some forms of property as constitutive to personhood. More recently, Anne Phillips authored a book that similarly contests the attraction of bodily goods and services into the realm of the market. Phillips conceives the human body as a universal equalizer and as the permanent and universal given of the human condition. Thus she argues that commodification of the human body necessarily leads to inequality and subordination.65 Before Phillips’s theory, Dorothy Roberts argued that the market in human reproduction was deeply racialized. In her later work, Roberts insisted that the apparently contradictory directions in human reproduction laws and policies – from population control programs that target predominantly black women to reproduction enhancement options from which mostly whites benefit – actually converge in the neo-liberal biopolitics that lead to the privatization of genetic responsibility.66 64

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Margaret Jane Radin, Contested Commodities, Cambridge, MA: Harvard University Press, 1996; Margaret Jane Radin, Reinterpreting Property, Chicago: University of Chicago Press, 1993; Margaret Jane Radin, “Market Inalienability,” Harvard Law Review 100, no. 8 1987: 1849. Anne Phillips, Our Bodies, Whose Property? Princeton: Princeton University Press, 2013. Dorothy Roberts, “Race, Gender and Genetic Technologies: A New Reproductive Dystopia?” Signs 34, no. 4 2009: 783. In a wider perspective, one could also mention works such as that of political theorist Michael Sandel, who has recently critiqued the seemingly never-ending expansion of markets (into the fields of the environment [pollution permits], arts, sports, but also, life and death and, thus, human reproduction). Sandel argues that oftentimes, not only are such markets bound to be unfair (i.e., lead people to engage into selling under tremendous pressure and thus maybe not so freely or voluntarily as liberal theory likes to think) but also that they lead to corruption, as they degrade “the moral importance of the goods at stake”; see, e.g., Michael Sandel, What Money Can’t Buy: the Moral Limits of Markets. Farrar, Straus and Giroux, 2012, p. 113 (“the corruption argument focuses on the character of the good themselves and the norms that should govern them. So it cannot be met simply by establishing fair bargaining conditions. Even in a society without unjust differences of power and wealth, there would still be things that money should not buy. This is because markets are not mere mechanisms; they embody certain values”). Compare Michael Walzer, Spheres of Justice: A Defense of Pluralism and Equality. New York: Basic Books, 1983 (discussing his notion of “desperate exchanges” that justifiably warrant a restraint from the market).

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Concerns from commodification, however, need not only stem from a reluctance regarding commodification per se. In fact, social anthropology supports the notion that commodification need not be assessed in an ontological fashion. Social anthropology theory holds that because there is a “social life of things,”67 their commodification is not intrinsically good or evil.68 What matters is not so much what is commodified but how and when, and what needs to be paid attention to are the conditions under which commodification, be it the case, operates. Various questions arise from that perspective. The central question probably has to do with solutions that commodify services that only women can provide.69 There are many instances in which it has been verified that women are expected not to commodify “much of what [they] have power over, such as their sexual or reproductive services,” and “even when monetary compensation is allowed, it is often kept low and female providers are expected to be interested in rewards rather than money.”70 As mentioned earlier, the ECJ has often claimed to set morals aside and to undertake “pure” legal reasoning. In cases like Grogan71 or the 2008 Sabine Mayr case,72 the Court explicitly stated that it is not to decide upon the moral admissibility of abortion or ARTs. In the 2011 Brüstle case, Advocate General Yves Bot repeatedly and similarly claimed that it was necessary to approach the

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Arjun Appadurai, The Social Life of Things: Commodities in Cultural Perspective. Cambridge: Cambridge University Press, 1988: Appadurai insists in his chapter that the concept of “value” awarded to things is complex and contingent, and that they are conveyors of a multitude of social meanings. Sociologist Zelizer also insists that markets and social life are inextricably intertwined rather than made of clear lines of demarcation between things and values that are commodified and others that never are: Viviana Zelizer, The Purchase of Intimacy. Princeton: Princeton University Press, 2005. Richard Wilk, “Taking Gender to the Market.” Feminist Economics 2, no. 1 (1996): 90–93: One of the hallmarks of feminist scholarship has been to show that concepts like the free market are socially constructed and embedded. There are always limits on markets; there is no society where people buy and sell everything. All market behavior is shaped by cultural perceptions, moral precepts and social roles, so we always bring a gendered social identity to the market. The “free market” is a powerful cultural icon, a metaphor, a personified and fetishized abstraction constructed through rhetoric. Economic anthropology demonstrates that the only universal thing about markets is that everywhere they have limits, and in every society people engage in active debate about where the boundaries and limits around market exchange should be. They argue about what should be traded in the market, how markets should be regulated, and they always declare particular parts of a culture “off bounds” to market exchange (e.g., Parker Shipton’s BitterMoney, 1989). Just as we do. Mary Anne Case, “Pets or Meat?” Chicago Kent Law Review 80 (2005): 1129, 1149. Grogan, supra n. 6 at }} 17–20. Mayr, supra n. 28 at } 38. See also Brüstle, supra n. 32 at } 30.

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issue of the Patents Directive’s applicability to embryonic material from a “strictly legal” perspective.73 However, should these affirmations by the Court be taken at face value? The question ought to be answered in the negative. When the Court holds that it discards “morals” from legal reasoning, what it really does is discard one or several particular moral discourses. It is highly unlikely that the interpretative and normative choices the Court ultimately retains are value-free. As Diarmuid Phelan wrote in his critique of the Grogan ruling, the Court adopted an approach with enormous moral implications by a recharacterization of the rights in issue, based on economic principle which denies the validity of the Irish constitutional position in the EC. By defining abortion as an economic activity in EC law, the Court placed abortion under the article 2 [of the European Economic Community] task to promote throughout the Community a harmonious and balanced development of economic activities.74

Following this line of argumentation, it could be said that when the Court qualifies prostitution as a service and prostitutes as (potentially) self-employed workers, it makes positive normative choices as opposed to remaining axiologically neutral. Christophe Hillion stated that not only does [the Court] defines [prostitution] as a service, but it also gives it a Community objective meaning: “it is sufficient to hold that prostitution is an activity by which the provider satisfies a request by the beneficiary in return for consideration without producing or transferring goods.” Seen from this perspective, the Court’s approach cannot be perceived as entirely neutral, particularly for the Member States which have made the activity illegal.75

Similar interrogations are raised by the ECJ’s more recent standing in the Brüstle case, where the Court claimed to propose a legal definition of the embryo under the 1998 Patents Directive in the form of an “autonomous

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Opinion of Advocate General Bot, Brüstle, supra n. 32 at } 45: “La question qui est posée à la Cour est une question certes difficile. Elle est cependant exclusivement juridique.” Diarmuid Rossa PhelaN, “Right to Life of the Unborn v. Promotion of Trade in Services: the ECJ and the normative shaping of the EU”, Modern Law Review (1992): 670, 689: “Under this rationale, fundamental rights are shaped according to a market actor’s economic role in the transnational society under construction; fundamental rights are not implied by a person’s human and moral nature. The fundamentals of EC law depend on weighing the consequences of possible decisions according to liberal economic axioms; justification is not seen in terms of the fundamental nature of the principle, the right or the person as such.” Christophe Hillion, “Case Law”, Common Market Law Review 40 (2003): 435.

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notion” of EU law. Both the Advocate General’s references to concepts76 or lines of reasoning77 that are situated in the wider law and politics of bioethics framework, and the Court’s endorsement of a wide definition of “the embryo,” support the view that the discarding of morals and correlative claim to pure legal reasoning are merely rhetorical devices. In other words, the Court’s allegation of ethical abstention is questionable. Furthermore, the ECJ’s claim to moral neutrality and the mere mechanical application of EU law categories, notably the freedom of circulations, oriented towards a particular EU law teleology of market completion need to be tested against the contentious notion that “the market” is neutral to start with. Some scholars have argued that market mechanisms are prone to emancipation from paternalistic/moralistic norms, especially in the field of human reproduction. Martha Ertman, for instance, argued that “market mechanisms provide unique opportunities for law and culture to recognize that people form families in different ways. If state or federal law (in the US case) rather than the laws of supply and demand determine who can have children using reproductive technologies, then many single and gay people will be excluded from this important life experience.”78 It is undeniable that in legal orders in which biomedicine in general, and human reproduction in particular, has been the object of heavy regulation,79 the legal regimes that ensued are organized along 76

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Such as the concept of human dignity; see in particular } 34 of the Advocate General’s opinion, whereby he claims that because of the human dignity principle, the concept of “the embryo” should be widely defined. More generally, on the politics of human dignity, especially in the field of bioethics, see Roger Brownsword & Derek Beyleveld, Human Dignity in Bioethics and Biolaw, Oxford: Oxford University Press (2001); Stéphanie Hennette Vauchez, “A Human Dignitas? Remnants of the Ancient Legal Concept in Contemporary Dignity Jurisprudence”, I-CON 9, no. 1 (2011): 32. See in particular the Advocate General’s insistence on the inadmissability of any taking into account of human intent in the determination of the legal status of the embryo: Yves Bot conveys the view that the human embryo ought to have a ontology-based status (i.e. one that does not vary depending on contexts of obtention, conservation, use, etc.) and therefore discards intent as irrelevant (see Bot’s opinion, esp. } 89). This however, can be challenged both legally (for an analysis of French law that shows that the embryo does not have one fixed legal status but that it varies according to whether the embryo is invested with a parental project or not, see L’être Humain Sans Qualités. In Bioéthique, Biodroit, Biopolitique: réflexions à l’occasion du vote de la loi du 6 août 2004, edited by Stéphanie Hennette Vauchez, Florence Bellivier & Pierre Egéa. Paris: L.G.D.J., 2006, p. 211. Further, for a theoretical reflection on the role of intent in parenthood, see Marjorie Schulty, “Reproductive Technology and Intent-Based Parenthood: An Opportunity for Gender Neutrality”, Wisconsin Law Review (1990): 297. “The Upside in Baby Markets.” In Baby Markets: Money and the New Politics of Creating Families, edited by Michele Goodwin & Martha Ertman. 1st ed. Cambridge: Cambridge University Press, 2010, p. 23. Whereas in Europe, generally speaking, issues of human reproduction tend to be heavily regulated, Debora Spar has famously coined the expression that designates the United States as

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lines of deeply gendered hierarchies. In many European countries, access to ARTs have long been, or remains, limited to heterosexual couples, and the ECtHR case law on these issues remains fundamentally heteronormative.80 However, recent work on the operation of markets in gametes in the United States, where the field remains essentially unregulated,81 tends to establish that such hierarchies, along with race and class inequalities, are similarly produced and reproduced by market arrangements. Both at the level of gametes procurement (donors)82 and of access to reproductive services (customers),83 markets in human reproduction operate on the basis of a number of stereotypes and gender norms,84 not to mention their racial dimension.85 At the end of the 1990s, Dorothy Roberts reported, “most IVF clinics accept only heterosexual married couples as clients, and most physicians have been unwilling to assist in the insemination of women who depart from that norm. They routinely deny their services to single women, lesbians, welfare recipients and other women who are not considered good mothers.”86 Naomi Cahn’s updated account published in 2009 indicates that little has changed in that respect. Cahn cited a report according to which “50% (of fertility clinics) are likely to turn away a man who does not have a wife or a partner, 20% would not offer their services to a single woman, 17% would not provide services to a lesbian couple and 5% would not give services to a biracial couple”.87

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the “Wild West” of reproductive justice: Debora Spar, The Baby Business: How Money, Science and Politics Drive the Commerce of Conception, Cambridge, MA: Harvard Business School Press, 2006. “Bioéthique Et Genre: Cadrage Théorique, Enjeux Européens.” In Bioéthique Et Genre, edited by Anne-Françoise Zattara-Gros & Stéphanie Hennette Vauchez, Paris: LGDJ, Lextenso Editions, 2013. At least at the federal level; in some States, human reproduction is the object of legal regulation, but overall, sperm banks, fertility clinincs and ARTs in general are private operators on a market. For a critique, see Naomi Cahn, Test Tube Families. Why the Fertility Market Needs Legal Regulation, New York: NYU Press, 2009. Rene Almeling, Sex Cells, The Medical Market for Eggs and Sperm, Berkeley: University of California Press, 2011. Cahn, supra n. 76. See, e.g., Dorothy Roberts, “Killing the Black Body”, op. cit.: “most often they complete a traditional nuclear family by providing a married couple with a child. Instead of disrupting the stereotypical family, they enable infertile couples to create one.” In that regard, the ambivalences of ARTs as a primarily genetics-oriented project need to be further explored, for they are prone to revivifying concerns if not policies related to racial purity. Id. at 248. Andrea Gurmankin, Arthur Caplan & Andrea Braverman, “Screening Practices and Beliefs of Assisted Reproductive Technologies Programs”, Fertility and Sterility 83 (2005): 61 (cited by Naomi Cahn, Test Tube Families, op. cit., p. 133).

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Freedoms of Circulation as Factual Pillars of Human Reproduction in Europe In their work on blood, cell lines and organs in late capitalism, Catherine Waldby and Robert Mitchell make the compelling point that legal scholarship’s continued tendency to frame the regulation of biomedicine in terms of “human rights” may conceal or even reinforce the marketization or commodification processes that are taking place.88 Their work on the political economy of the circulation of tissues focuses on the persistent, and at times deceiving, insistence of many legal narratives according to which substances of human origin may not lead to remuneration. The authors argue it is precisely the ambiguity of many central legal concepts on which biomedical law was built, including non-marketability of substances of human origin and informed consent, that allowed the transformation (as opposed to the impediment) of gifts (donation) into property (acquisition). Thus that ambiguity resulted in a situation in which “while persons have no property rights in their own body parts, it is possible for a second party to establish property rights in tissues once they have left the donor’s body.”89 If “traditional” human-rights concepts such as non-marketability and anonymity contribute to severing the legal grammars discussed in scholarly conversations on the one hand and the circulation of bodies and body parts on the other hand, there is a risk for scholars to wake up to a transformed world, one largely out of reach of the traditional tools we have lingering on without taking into account what was also happening in parallel. Because bodies, body parts and services circulate across the globe, and because the market and its correlated freedoms of circulation are legal tools that favour and encourage such circulation,90 the precise way these legal categories operate and questions they raise must be addressed. This line of questioning is opportune, as there are indications that the pervasiveness of the “market” or “fundamental freedoms” approach has started to weaken the human rights approach, especially, or perhaps coincidentally, regarding issues of sexual and reproductive freedoms. Two recent ECtHR

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Catherine Waldby & Robert Mitchell, Tissue Economies: Blood, Organs and Cell Lines in Late Capitalism. Durham: Duke University Press, 2006. Id. at 71. The contemporary dramatic increase in cross-border medical care is a great testimony to the extent to which the market favours such circulation; see Eris Blyth & Abigail Farrand, “Reproductive Tourism – A Price Worth Paying for Reproductive Autonomy”, Critical Social Policy 25 (2005): 96. See also I. Glenn Cohen, The Globalization of Health Care: Ethical and Legal Issues, Oxford: Oxford University Press, 2013. As far as legislation goes, see, emblematically, Directive 2011/24/EU of the European Parliament and of the Council on the Application of Patients’ Rights in Cross-Border Healthcare, 2011 O.J. L 88/45.

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rulings are worth singling out, as they illustrate the ways in which the ECtHR’s incorporation and reliance on freedoms of circulation within the logic of human rights raise concerns. These are cases in which the ECtHR seems to alleviate the burden of ECHR standards that weighs on States when that court is convinced that applicants could have travelled abroad to obtain services whose unavailability was challenged as a violation of the ECHR. In that respect, these cases touch upon questions pertaining to the weakening of human rights standards by freedoms of circulation that are all the more worrisome given that the latter are largely inaccessible to the less privileged groups of society. In its 2010 A, B and C v. Ireland ruling,91 the ECtHR took into account the possibility for women in Ireland to travel abroad to obtain abortion services while assessing the conformity of Ireland’s abortion regime to the ECHR. Paragraph 241 of the ruling reads: [H]aving regard to the right to lawfully travel abroad for an abortion with access to appropriate information and medical care in Ireland, the Court does not consider that the prohibition in Ireland of abortion for health and well-being reasons, based as it is on the profound moral views of the Irish people as to the nature of life . . . and as to the consequent protection to be accorded to the right to life of the unborn, exceeds the margin of appreciation accorded in that respect to the Irish State.

Similarly, in its 2011 S and H v. Austria ruling, the ECtHR insisted that ARTs were more accessible in countries other than Austria. The ECtHR stated: “The Court also observes that there is no prohibition under Austrian law on going abroad to seek treatment of infertility that uses artificial procreation techniques not allowed in Austria and that in the event of a successful treatment the Civil Code contains clear rules on paternity and maternity that respect the wishes of the parents.”92 Such modes of reasoning create a number of interrogations. As a matter of principle, one wonders what is left of the project of international human rights law in Europe if any given country can deny the right to access given services on the basis that they are available in neighbour States. The notion that States cannot get away from their international human rights obligations based on the sole notion that their counterparts do not respect these obligations has played an instrumental role in the emergence and consolidation of human rights law. Technically, this mode of reasoning from the ECtHR is disturbing because it allows for instances of discrimination. Generally speaking,

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Case 25579/05, A, B and C v Ireland, [2010] ECHR 2032. ECHR, GC, 3 Nov. 2011, S.H. and Others v, Austria, 57813/00 } 114.

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freedoms of circulation are enjoyable under circumstances of wealth and legal status. As such, the ECtHR’s reliance on the technical and legal possibility for women based in Ireland or individuals and couples based in Austria to travel abroad to obtain abortion and reproductive services is problematic because it narrows the scope of those susceptible of enjoying those rights. Furthermore, would the ECtHR have ruled the same way in cases against a non-EU country? If not, the whole ECHR system is at risk of becoming a two-tier mechanism, with loosened human rights standards for EU countries that are linked by freedom-of-circulation agreements. A positive answer would hardly be more satisfactory. Such an answer would amount to even greater damages to the very project of international human rights in Europe, as it would ignore the heightened difficulties that nationals of non-EU Member States encounter as far as their mobility goes, making the option of traveling for services and goods all the more illusory.

4. conclusion This chapter could be summarized in two main claims. First, both human rights and the market theory are problematic as regulatory paradigms in the field of human reproduction. While the former tends to perpetuate the paternalistic limitation of individual freedoms by undue deference to States sovereignty, the latter has been rightfully criticized as hardly neutral, including in its application of reproductive issues. Additionally, the market perpetuates hierarchies and does not enable egalitarian or universal access to reproductive justice. Second, shying away from the difficulties of identifying proper principles according to which reproductive justice should be promoted cannot be a viable option. In that regard the present chapter’s goal was to restore the underestimated contribution of the ECJ to the affirmation of rights in the field of sexuality and reproduction. By doing so, it does not suggest that market-oriented modes of reasoning and solutions are necessarily better than others. They are, however, increasingly present – including in Europe. The CJEU recently had to deal with a surrogacy case.93 Although the legality of the principle of surrogacy does not fall under the scope of EU law, the Court had to answer a referral by a British and an Irish court as to whether it was a violation of EU law to deny a commissioning mother who was also a worker a maternity leave. Similarly, as cross-border reproductive care blossoms in Europe and within the EU, Member States are increasingly going to be 93

Cases C-167/12 C. D. v S. T. and C-363/12 Z. v A. Government Department and the Board of Management of a Community School (2014).

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confronted with what I. Glenn Cohen called “circumvention tourism”.94 In other words, reproductive rights seem to be a domain in which the interaction between “fundamental rights” and “economic freedoms” is most visible. In that context, it is necessary to prepare for the new ways in which the issues will continue to arise. Reframing Grogan, and thus reframing the story of reproductive rights in Europe, seems like one way to start doing just that.

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Cohen, I. Glenn, “Circumvention Tourism”, 97 Cornell Law Review (2012): 1309.

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22 Jenkins v. Kingsgate and the Migration of the US Disparate Impact Doctrine in EU Law ioanna tourkochoriti

introduction Jenkins v. Kingsgate1 is a landmark case of the Court of Justice of the EU (CJEU) that demonstrates the travel and change of legal ideas as they migrate from the United States to the European Union. By discussing the idea of “indirect discrimination” in reference to the US experience, Jenkins consolidates the notion of dispelling discrimination due to the adverse impact of a neutral rule or policy.2 In Jenkins, Advocate General Warner of the CJEU referred explicitly to the US Supreme Court case Griggs v. Duke Power Co.3 to trace a parallel between the situation of African Americans in the United States and women in Europe. The story of Jenkins is a stark example of the migration of legal ideas,4 which operates in a different way in the new context. A key explanatory factor in this story is the radically different conception of the role of the government on either side of the Atlantic. Jenkins is in line with wider EU policies favoring an idiosyncratic combination of free market liberal economy that promotes economic redistribution.5 This combination demonstrates an acceptance of state interventions in the EU that is much greater than what is acceptable in the United States, where the government

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Case C-96/80 J.P. Jenkins v. Kingsgate Ltd. [1981] E.C.R. 911. For an analysis, see Julie Suk, Disparate Impact Abroad, Benjamin N. Cardozo School of Law, Faculty Research Paper No. 415, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_ id=2408143. Griggs v. Duke Power Co., 401 U.S. 424 (1971). Sujit Chaudry, Migration as the New Metaphor in Comparative Constitutional Law, in The Migration of Constitutional Ideas (Sujit Chaudry ed.), at 1 (2006). See Anna van der Vleuten, The Price of Gender Equality, Member States and Governance in the European Union, Hampshire, Ashgate, 2007.

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cannot define wages in a way that appears “just” from a moral point of view.6 In the landmark US Supreme Court case Griggs v. Duke Power Co., Justice Burger wrote a majority opinion that, for the first time, referred to the doctrine of “disparate impact.”7 The Court held unanimously that the use of employment tests or educational qualifications as prerequisites for hiring and promotion, a facially neutral practice, amounted to racial discrimination when it operated to disqualify minority applicants at a substantially higher rate than non-minority applicants.8 Lord Anthony Lester, a US-trained lawyer who handled the Jenkins case before the CJEU, played a decisive role in contributing to the migration of the disparate impact doctrine in EU law.9 Although Griggs concerned the access of employees discriminated by race into the labor market, the CJEU in Jenkins applied the concept of disparate impact in the context of remuneration and equal pay for men and women. While the idea of combating systemic discrimination originated in the United States, it evolved in the Supreme Court’s jurisprudence in a way that is arguably more restrictive for plaintiffs’ discriminatory claims than in the EU. In fact, the Griggs doctrine, as interpreted by the CJEU, evolved into a legal tool more protective than its US counterpart against systemic discrimination. Whether a legal doctrine is effective in combatting systemic discrimination depends on how courts evaluate the defenses available to the employer and, in particular, on how they consider the employer’s intent of defining the meaning of employment discrimination. For instance, the CJEU has used “indirect discrimination” in a way that encourages the Member States to engage in wider redistributive policies concerning the calculation of salaries and welfare benefits.10

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See Ioanna Tourkochoriti, ‘Disparate Impact’ and ‘Indirect Discrimination’: Assessing Responses to Systemic Discrimination in the US and the EU, European Journal of Human Rights, 297 (3/2015). 401 U.S. 424 (1971). Unless they had a “manifest relationship to the employment in question.” The Court held that a policy of a power company that imposed a standardized general intelligence test as a condition of employment in or transfer to jobs had a disparate impact on African Americans. This was so because the policy operated to disqualify African Americans at a substantially higher rate than other applicants, and the jobs in question formerly had been filled only by white employees as part of a long-standing practice of giving preference to whites. What is more, the policy was not shown to be significantly related to successful job performance. Currently Baron Lester of Herne Hill, and a Member of the House of Lords, graduate of Harvard Law School’s LLM Program. For an analysis of cases, see infra, the sixth section of this chapter.

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The judicial recognition of a concept of systemic discrimination through the US disparate impact doctrine and the EU concept of indirect discrimination aims at removing distortions in the equal opportunities offered to persons that are due to wider consolidated socially oppressive circumstances.11 These parallel concepts found their way into numerous EU directives against discrimination in the access to employment.12 The elements of indirect discrimination as defined by EU directives are a neutral rule, criterion, or practice that affects a group defined by a protected ground in a significantly more negative way, by comparison to others in a similar situation.13 This kind of discrimination is important because it is not the treatment that differs, but its effects, which will be felt differently by people with different characteristics. Indirect discrimination results from a suspect situation that disproportionally disadvantages the protected group by the use of a forbidden criterion.14 The CJEU was thus receptive to the concept of disparate impact considering that article 119 of the European Economic Communities Treaty EEC and currently article 157 of the Treaty of the Functioning of the European Union (TFEU) encompasses part of the social objectives of the Community that “is not merely an economic union, as its ultimate objective is to ensure social progress and to seek constant improvement of the living and working conditions of its peoples.”15 11

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Ferdinand von Prondzynski and Wendy Richards, Equal Opportunities in the Labour Market: Tackling Indirect Sex Discrimination, 1 European Public Law, 117, 122 (1995). A number of European Council Directives establishing a general framework for equal treatment combating discrimination on the grounds of religion or belief, disability, age or sexual orientation (2000/78/EC), racial or ethnic origin (2000/43/EC), men and women (2002/ 73/EC) as regards employment and occupation, have been influenced by the existing US legislation on the same topic (42 USC. et seq). For instance, Directive 2000/78/EC defines “indirect discrimination” as discrimination that occurs “where an apparently neutral provision, criterion or practice would put persons having a particular religion or belief, a particular disability, a particular age, or a particular sexual orientation at a particular disadvantage compared with other persons”; Directive 2000/78/EC Article 2 § 2(b). A similar clause exists in Article 2 § 2(b) of the Directive 2000/43/EC, against Discrimination on the grounds of racial or ethnic origin, and in article 2 § 2 of Directive 2002/ 73/EC, on the implementation of the principle of equal treatment for men and women. Pierre Garrone, La Discrimination Indirecte en Droit Communautaire: Vers Une Théorie Générale, 30 Revue Trimestrielle De Droit Europeen, 425–49, at 426. Case C-43/75 Defrenne v. Sabena [1976] E.C.R. 445. See Christopher Bovis & Christine Cnossen, Stereotypes Assumptions versus Sex Equality: A Socio-Legal Analysis of Equality Laws in the European Union, Int’l. J. Comp. L.L.I.R., 7, 9 (Spring 1996); Elizabeth F. Defeis, Human Rights and the European Court of Justice: An Appraisal, 31 Ford. Int’l L. J., 1104, 1112 (2008). The CJEU had ruled in Defrenne (§ 24) that article 119 had a “direct effect” on Member States and that it applies not only to the action of public authorities but also to all agreements which are intended to regulate paid labor collectively as well as to contracts between individuals (§ 38–39). Individuals have a right against Members States as well as

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Since the Defrenne decision of 1976, a case dealing with direct discrimination that elaborated on the aims of the community as a whole “to ensure social progress,”16 the Court developed a more sophisticated concept of “indirect discrimination” and its causes, focusing on systemic discrimination. In 2000, the Court’s jurisprudence was codified in the text of the Equality Directives, expanding the characteristics on the basis of which discrimination in the access to the employment market is forbidden.17 Jenkins involved the interpretation of article 119 EEC18 and the Equal Pay Directive.19 The longterm consequences of the cases became obvious much later as the CJEU began expanding the use of the concept of indirect discrimination in a way that today would not be acceptable in the United States, as it would be seen as an intervention in the market definition of wages.20 For instance, in Enderby,21 the CJEU extended the principle of equal pay to “any practice or procedure which puts a predominantly female group of workers at a disadvantage compared with a mainly male group of workers.”22 Jenkins, therefore, became a landmark ruling of the CJEU that deepened the impact of European regulation beyond the existing legislative texts at the time.

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private actors in state Courts independently of whether domestic legislation implementing Article 119 exists (Id, § 40). Case C-43/75 Defrenne v. Societe anonyme belge de navigation aerienne Sabena [1976] E.C.R. 445 § 10. See supra note 11. According to which “Each Member State shall during the first stage ensure and subsequently maintain the application of the principle that men and women should receive equal pay for equal work. For the purpose of this Article, ‘pay’ means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives, directly or indirectly, in respect of his employment from his employer. Equal pay without discrimination based on sex means: (a) that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement; (b) that pay for work at time rates shall be the same for the same job.” Council Directive of 10 February 1975 on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women 75/117/EEC. According to article 1 of the Directive, “The principle of equal pay for men and women outlined in Article 119 of the Treaty, hereinafter called ‘principle of equal pay,’ means, for the same work or for work to which equal value is attributed, the elimination of all discrimination on grounds of sex with regard to all aspects and conditions of remuneration. In particular, where a job classification system is used for determining pay, it must be based on the same criteria for both men and women and so drawn up as to exclude any discrimination on grounds of sex.” See infra part 6. Cf. Katerina Linos, Path Dependence in Discrimination Law: Employment Cases in the United States and the European Union, 35 Yale J. of Int’l L. 115, 136 (2010). Case C-127/92, Enderby v. Frenchay Health Auth. [1993] E.C.R. I-5535. Lord Lester of Herne Hill QC, Making Discrimination Law Effective: Old Barriers and New Frontiers, International Journal of Discrimination and the Law, 167, 176 (1997).

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jenkins v. kingsgate : the background to the ruling Mrs. Jenkins, a part-time employee of Kingsgate (Clothing Productions) Ltd., which manufactured ladies’ clothing in Essex, alleged that her employer unfairly prejudiced against her. She cited that although she was employed part time to perform the same work as that of her male colleagues, who were employed full time, her hourly rate was lower than that of her male counterparts. Part-time workers, defined as those engaged to work less than forty hours per week, were paid at an hourly rate 10 percent lower than that of full-timers. Mrs. Jenkins was employed for more than ten years and was regarded as a very competent and expert worker.23 The Staff Association, employers, and the trade unions agreed to Mrs. Jenkins’s reduced pay rate salary.24 Mrs. Jenkins was one among five other female employees working part time who received some 10 percent less than the employees working full time in the grade in which they were placed.25 At the time, the applicable legislation in the United Kingdom was the Equal Pay Act 1970.26 According to the Act, equal pay for men and women could be claimed if a woman was employed on “like work” with a man in the same employment or work rated as equivalent.27 However, the law foresaw the following exception: “an equality clause shall not operate in relation to a variation between the woman’s contract and the man’s contract if the employer proves that the variation is genuinely due to a material difference (other than the difference of sex) between her case and his.”28 The concept of

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JP Jenkins v. Kingsgate (Clothing Productions) Ltd, 30248/78/E, Industrial Tribunal, 15 January 1979, 1979 WL 466469. Id., § 5 (iii). Observations of the Commission to the President and Members of the Court of Justice of the European Communities, Brussels, 21 May 1980, JUR (80) D/01343, § 2. Which provided that if the terms of a contract under which a woman is employed do not include an equality clause they shall be deemed to include one Equal pay act 1970 section 1 (1). Equal pay act 1970 section 1 (2) reads that the equality clause comes into play (a) where a woman is employed on “like work” with a man in the same employment (as defined in Section 1(4)) or (b) where a woman is employed on work “rated as equivalent” with that of a man in the same employment (as defined in Section 1(5)). Section 1(4) defined the circumstances in which a woman was to be regarded as employed on “like work” with men: “if, but only if, her work and theirs is of the same or of a broadly similar nature, and the differences (if any) between the things she does and the things they do are not of practical importance in relation to terms and conditions of employment; and accordingly in comparing her work with theirs regard shall be had to the frequency or otherwise with which any such differences occur in practice as well as to the nature and extent of differences.” Equal Pay Act 1970 section 1 (3).

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“indirect discrimination” existed in section 1 (1) of the Sex Discrimination Act 1975,29 which did not deal with contractual matters relating to employment. According to the Act, indirect discrimination existed “where a substantial number of one sex is unable, to their detriment, to comply with an apparently neutral rule, applicable to both sexes, which cannot be shown to be related to job performance”.30 Until 1975, the employer maintained a discriminatory pay policy paying female employees less than male ones.31 In November 1975, Kingsgate, after negotiations with its own staff association and with the relevant trade union, introduced new rates of pay under which full-time workers of either sex received an equal hourly rate as did part-time workers of either sex. Parttime workers32 were paid 10 percent less per hour than full-time workers. That lower hourly rate applied to any employee who, although engaged as a fulltime worker, persistently failed to work forty hours a week. Mrs. Jenkins argued before the Industrial Court that when Kingsgate established equal pay between men and women, in reality they perpetuated the previous system by paying their part-time employees less than their fulltime ones. This was because their female staff – by virtue of the jobs that they had to perform at home – were far more likely to be part-time workers, contrary to the Equal Pay Act.33 Kingsgate rebutted that the difference in

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Which entered into force on 29 December 1975. Section 1 (1) of the Sex Discrimination Act 1975. The act applied to requirements or conditions applied by the employer, for instance making a requirement for access to opportunities for promotion or to some non-contractual financial benefit that the worker should be engaged in full-time employment. In this case it would be open to a woman worker to show that the proportion of relevant women who could comply with the requirement was considerably smaller than the proportion of relevant men who could comply with it (i.e., because of the family obligations of many married women workers); see Written Observations on behalf of Mrs. J.P. Jenkins, in the Court of Justice of the European Communities, Case No. 96/80, Registered at the Court of Justice under No 125431, 27 May 1980, p. 8. Scholars criticized the legislation as ineffective; see Erika Szyszczak, Differences in Pay for Part-Time Work, The Modern Law Review, 672, 674 (1981). The 2010 Equality Act, which synthesized all subsequent developments on the issue, repealed both acts. S. 19 of the current UK Equality Act 2010 defines indirect discrimination as: A person (A) discriminates against another (B) if A applies to (B) a provision, criterion or practice which . . . (a) A applies, or would apply . . . to persons with whom B does not share the characteristic, (b) [the provision, criterion or practice] puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it, (c) it puts, or would put, B at that disadvantage, and (d) A cannot show it to be a proportionate means of achieving a legitimate aim. JP Jenkins v. Kingsgate (Clothing Productions) Ltd, 30248/78/E, Industrial Tribunal, 15 January 1979, 1979 WL 466469 § 2. 33 Those working for fewer than forty hours a week. Id., § 3.

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treatment between the part-time and full-time employees aimed to encourage all employees to work full time.34 This arrangement had the advantage of ensuring that their expensive machinery was put to use for as many hours a day as was possible, and discouraged absenteeism.35 The difference appeared to be related neither to the personal characteristics of the employees in question (e.g., age or length of service) nor to their work (e.g., its quality or quantity produced).36 The Industrial Tribunal found that the reduction in Mrs. Jenkins pay rates were agreed to by the Staff Association, employers, and the trade unions involved in May 1975. The Industrial Tribunal found for the employer, citing Handley and Mono.37 Handley concerned lower rates of pay for women machinists who worked part time, compared to men machinists who worked full time in a manufacture of ladies’ fashion outerwear. In Handley, the Employment Appeal Tribunal found that the variation in pay between full-time and part-time workers was a material difference relating to the contribution to the productivity of the company and unrelated to sex discrimination.38 In a reasoning that is neither clear nor based on concrete scientific economic data, the Court stated that part-time workers contributed less to the overall production of the company and to the utilization of the company’s equipment than somebody who worked full time.39 The Court concluded that a “liberal approach” to article 157 TFEU40 requires some exceptions in reference to this material difference.41 UK law, foreseeing these exceptions, is thus consistent with the liberal interpretation of this provision. Applying this precedent in Jenkins, the Industrial court held that as Mrs. Jenkins worked only 75 percent of the hours desired by the employers, there was a material difference that could justify the different rate of pay in reference to Section 1(3) of the Equal Pay Act.42 Nevertheless, the Court noted that although it was not “in a position to alter the law in any way,” it had to remark that the different rates of pay were a “smack of inequality among the sexes because, by the very nature of things, the part-time workers are bound to be mostly women.”43

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Id., § 4. Richard Plender, Equal Pay for Men and Women: Two Recent Decisions of the European Court, 30 Am. J. Comp. L. 627, 632 (1982). Observations of the Commission, supra note 23 § 4. 38 Employment Appeal Tribunal, 10 October 1978, [1979] I.C.R. 147. Ibid. 40 41 Id., at 155. Article 119 of the then EEC. Id., at 155–56. JP Jenkins v. Kingsgate (Clothing Productions) Ltd, 30248/78/E, Industrial Tribunal, 15 January 1979, 1979 WL 466469 § 6. Ibid.

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the litigation strategy before the cjeu When Mrs. Jenkins appealed her case, the Employment Appeals Tribunal submitted a request for a preliminary ruling to the CJEU on three questions.44 First, whether under Article 119 EEC the provision on equal pay without sex discrimination for the same job applied irrespective of whether the work was done full time or part time, or irrespective of whether it was of commercial benefit to the employer to pay a higher rate to full-time than to part-time workers.45 If there was no absolute rule barring a differential between a parttime and a full-time employee for what is the same work, and if the economic advantages to an employer could be taken into account, it was necessary for someone to lay down the criteria to decide whether equal pay applies.46 Second, in deciding the breadth of the provision of Article 119 EEC and Article 1 of the Directive, it was necessary to know whether the fact that a smaller proportion of women were able to work full time affected the general provisions of the Article.47 Third, the Court inquired whether the provisions of Article 119 EEC were directly applicable in a Member State.48 It is important to note that Jenkins Ltd was a comparatively small company, and was not in a strong financial position.49 The Company did not present any argument before the CJEU as, without legal aid, it could not afford to be represented before the Court.50 Nevertheless, the First Chamber turned down an application for legal aid made on its behalf.51 The decision, which would impose a change in UK and more generally European law concerning indirect discrimination against women, concerned a relatively small company that did not even have the opportunity to be heard before the CJEU.52 Lord Lester, who handled the case for Ms. Jenkins before the CJEU,53 was active in litigating on behalf of discrimination plaintiffs under the Race Relations Act. He was also responsible for inserting the reference to “indirect discrimination” in the 1975 Act as he accompanied Roy Jenkins, then UK 44

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J.P. Jenkins v. Kingsgate (Clothing Productions) Limited, Employment Appeal Tribunal, 5 November 1979 [1980] 1 C.M.L.R. 81, 5 November 1979 § 10. 46 47 48 Id., §18. Ibid. Id., § 19 Id., § 20. For the period ending 30 November 1978. Jenkins v. Kingsgate, Opinion of Advocate General Warner, delivered on 28 January 1981, at 932. Ibid. Mrs. Jenkins, on the contrary, was supported by her trade union, the National Union of Tailors and Garment Workers, by the Equal Opportunities Commission established in Great Britain by the Sex Discrimination Act 1975, with power to provide assistance in legal proceedings having as their purpose the elimination of discrimination between men and women. Lord Lester has an LLM from Harvard Law School.

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Home Secretary, on a visit to the United States in 1974.54 Lord Lester describes how they learned about the concept when they visited the United States, and how they “began the argument that eventually persuaded the CJEU, in the Bilka-Kaufhaus case, to adopt indirect sex discrimination as a key part of Community law,” which would eventually also amend defects in domestic UK legislation.55 Lord Lester quoted before the CJEU a part from Chief Justice Burger’s opinion from Griggs that stresses the need to remove “artificial, arbitrary and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or other impermissible classification.”56 What was at stake, according to Lord Lester, was that if a given condition of obtaining equal pay for equal work operates adversely so as to exclude women, and cannot be shown to have a manifest relationship to the services in question, the application of such a condition is contrary to the principle of equal pay.57 Further, he noted that interpreting the fact that the number of hours worked counted, as a “material difference” under Section 1(3) of the Equal Pay Act, was not a correct interpretation of the clause.58 The employer did not suggest that the work performed by Mrs. Jenkins and her male comparison was different, or that her productivity was less. Further, the motives stated by the employers were not related to any difference in the nature, quality, or productivity of the work performed by Mrs. Jenkins and her male comparison, and there was no evidence that Mrs. Jenkins or other “parttime” workers were more likely to be absent from their work than “full-time workers.”59 Before the CJEU, Lord Lester, in parallel to citing Griggs, maintained that the decision of the Industrial tribunal is incompatible with the principle enunciated in previous British case law.60 He also put forward that the double 54

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See Julie Suk, Disparate Impact Abroad, supra note 7 at 5; see also Anna van der Vleuten, The Price of Gender Equality, Member States and Governance in the European Union, supra note 11 at 91. Lord Lester of Herne Hill QC, Making Discrimination Law Effective: Old Barriers and New Frontiers, INT’L. J. D. L., 167, 173 (1997). Griggs, at 431, as cited in the Written Observations on behalf of Mrs J. P. Jenkins, in the Court of Justice of the European Communities, Case No. 96/80, Registered at the Court of Justice under No 125431, 27 May 1980, p. 8. Id., at 18. Written Observations on behalf of Mrs J. P. Jenkins, in the Court of Justice of the European Communities, Case No. 96/80, supra note 26, p. 11. Id., p. 12. According to which the number of hours worked per week and the intentions of the employer are extrinsic circumstances of little relevance as regards proof of the absence of discrimination based on sex Court of appeal in Clay Cross (Quarry Services) Ltd. V. Fletcher [1979] I.C.R. 1.

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economic and social aim of article 119 EEC would be frustrated if the principle of equal pay was confined to full-time workers. This would create competitive disadvantages both for undertakings in countries that applied the principle of equal pay equally to part-time workers and for those in states where the proportion of available part-time workers was lower. If an employer wished to encourage his employees to work longer hours, he should pay a suitable overtime rate and not reduce the pay of those working part-time.

the argument of the commission based on empirical evidence The CJEU was aware that this decision would have a significant impact on the inclusion of women in the labor market: at the time, about 90 percent of parttime workers in the Community were women, mostly married with family responsibilities, whereas male part-time workers were mostly students, elderly, or partially disabled.61 In parallel, the Commission considered part-time work as a “buffer stock” of labor in constant expansion.62 Generally, female participation was increasing, indicating a fundamental change in attitudes toward the employment of women. A considerable part of this new demand for work would be for part-time employment.63 The Commission further considered that in order to facilitate the integration of women into the labor market, 61

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Commission of the European Communities, Voluntary Part-time Work, Annex to Document V/179–4/80-EN, at 12, Opinion of the Economic and Social Committee dated 1 June 1978 on part-time employment and its effects (OJ C 269/56 of 13 November 1978), Olive Robinson “Part-time employment in the European Community” published by the International Labour Organization in the 118 International Labour Review for May–June (1979) 299, J. A. S. Robertson and J. M. Briggs, “Part-time working in Great Britain”, British Department of Employment Gazette, July 1979, p. 671; and a Communication from the Commission to the Standing Committee on Employment dated 17 July 1980 entitled “Voluntary part-time work” (COM(80) 405 final). The proportion of women among part-time workers varied from Member State to Member State. According to the figures resulting from the 1977 “Labour force sample survey” (table 3 annexed to the Commission’s Communication), the proportion was highest in Germany and the United Kingdom (93%), about average in Denmark and Belgium (91% and 88%, respectively), lower in France and the Netherlands (81%), and lowest in Ireland and Italy (68% and 67%). The low figures for Ireland and Italy were connected with the fact that parttime work was less widespread in countries where the employment rate for women was low (see the Commission’s Communication at pp. 3–4). The proportion also varied from one industry to another, being lowest in agriculture and highest in the service industries. For the Commission, part-time labor would be a supply of labor in reserve to meet all sorts of future labor needs; Communication from the Commission on Voluntary Part-Time Work to the Standing Committee on Employment, COM(80) 405 final, Brussels, 17 July 1980, at 4. Commission of the European Communities, Voluntary Part-time Work, Annex to Document V/179–4/80-EN, at 11.

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part-time jobs should include non-discriminatory terms across a broad occupational spectrum.64 According to an inquiry organized by the Commission toward governments, employers’ organizations and trade unions in the Member States, no Member State had legislation requiring the pay of part-time workers to be proportional to the pay of full-time workers.65 Nevertheless, in many Member States collective bargaining had generally achieved that same result.66 For instance, Italian part-time workers achieved, in some cases, a pay proportionally higher than for full-time work.67 Only in the United Kingdom was it common for part-time work to be paid at lower hourly rates.68 Based on these facts, the Commission submitted that “equal pay” implied a basic rate for work at time rates, which should be the same for all employees doing the same job irrespective of the number of hours worked and any amounts additional to the base rate must depend on factors unconnected with the sex of the employee. What is more, as Mrs. Jenkins’s counsel noted, perpetuating the situation where some states applied the principle of equal pay to both full-time and parttime employees and some states did not would create a situation where undertakings in states that applied the equality principle to all employees would suffer a competitive disadvantage.69 The Commission’s arguments before the Court were very interesting as they set out all the different dimensions of the case as well as the policy decisions of the EU concerning gender equality. One could put forward many arguments in favor of excluding equal pay in such a case. First, that working part-time was not “the same job” as working full time, which could justify equal pay under 119 EEC.70 Second, that it was in reality the same job but that working less hours entailed additional charges (principally financial) for the employer, which might be taken into consideration to give the female part-time employee a lower time rate.71 As to the first issue, the Commission pointed

64 65

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68

69

70

Ibid. Communication from the Commission on Voluntary Part-Time Work to the Standing Committee on Employment, COM(80) 405 final, Brussels, 17 July 1980. Commission of the European Communities, Voluntary Part-time Work, Annex to Document V/179–4/80-EN, at 20. European Commission, Note on the situation in the Member States concerning the rate of pay of part-time vis-à-vis full-time workers, Brussels, 28 October 1980, JUR (80) D/03439 JF/ku, p. 5. Commission of the European Communities, Voluntary Part-time Work, Annex to Document V/179–4/80-EN, at 20. Written Observations on behalf of Mrs J. P. Jenkins, in the Court of Justice of the European Communities, Case No. 96/80, supra note 26, p. 15. 71 Written Observations, submitted by the Commission supra note 52, at 6. Ibid.

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out that in languages other than English,72 it would seem to suggest that it is in fact the “post” and not the number of hours worked that should determine whether the two jobs were the same.73 The Commission cited also a previous case where the CJEU held that the nature of her services determines whether a female worker is performing the same work as a male worker.74 If in accordance with subparagraph (a) of the third paragraph of article 119 EEC, pay for the same work at piece rates was to be calculated on the basis of the same unit of measurement, pay for the same work at time rates should obviously be established based on the same time rate.75 The difference with the United States becomes all the more flagrant when one moves to the question as to who bears the extra costs occurred by remunerating full-time and part-time employees on the same rate. The Commission stressed that its position had always been that “factors affecting the cost or the yield of female labor shall not be taken into consideration in case of work paid by time.”76 Any other approach, unless based on an objective expert and detailed analysis, would continue to leave open the door to sex-based discrimination.77 In any case, the Commission noted that part-time work did not need to be more or less costly to the employer than full-time work.78 It could reduce absenteeism and accidents at work, while the flexibility of parttime work made it easier for the employer to distribute the working time of his staff according to the firm’s peak operating periods.79 The drawbacks attached to part-time work for firms were that current social security costs could be higher and firms’ obligations under social legislation could be increased.80

the opinion of advocate general warner In his opinion, Advocate General Warner rejected these submissions on the basis that their content “was political rather than legal.”81 He also considered that the Commission’s submissions assumed discrimination between full-time and part-time workers must always be equated with discrimination between 72

73 75 76

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The Commission cites “slabs arbejde, Arbeitsplatz, poste de travail, posto di lavoro, functie.” Observations of the Commission supra note 52 § 14. 74 Ibid. Macarthys Ltd. V. Smith [1980] I.C.R. 672, March 27. CJEU Jenkins at 610. Referring to its recommendation of July 20, 1960 Bulletin of the European Economic Communities 1960, vol. 6/7, p. 46. 78 79 Observations of the Commission supra note 52, at 5. Ibid. Ibid. The Commission cites, e.g., percentage of handicapped persons, trainees, number of staff representatives, Id. at 5. Jenkins v. Kingsgate, Opinion of Mr Advocate General Warner, delivered on 28 January 1981, at 935.

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men and women regardless of the circumstances of the case. In order to respond to the first question, he put forward a literal interpretation of article 119 EEC to make the point that the wording is consistent with the view that a part-time worker and a full-time worker do not have “the same job,” even though they may do “equal work.”82 Thus, the AG’s response was that neither Article 119 EEC nor Article 1 of the Equal Pay Directive required that pay for work at time rates should be the same irrespective of the number of hours worked each week and of any benefit that the employer might derive from encouraging full-time work.83 Nevertheless, the AG did approve the “Griggs approach” put forward by the Counsel for Mrs. Jenkins. If women were less able to work forty hours a week than men because of their family responsibilities, the requirement that an employee should work forty hours a week to earn the full hourly rate must obviously hit women disproportionately compared to men.84 This did not necessarily mean that there was discrimination, but it did mean that there was prima facie discrimination in effect, which required “some special justification from the employer.”85 Although the Commission described this approach as a “half-way house” that would lead to a system that “could well be difficult to monitor in practice,” the Advocate General considered it the correct approach. In his opinion, it was the only approach that allowed the prevention of indirect discrimination against women disguised as the difference between full-time and part-time workers, and it prevented injustice to an employer who differentiated between full-time and part-time workers for sound reasons unconnected with their sex.86 The approach would not result in a system that would be difficult to monitor, as national courts would be able to evaluate if the different rates were justified on objective grounds, taking into consideration the employer’s intention. According to the Advocate General, the test was clear without the need for further community legislation or national legislation to enable the national courts to apply it.87 As the Advocate General noted, despite the difference in wording between the United States Civil Rights Act of 1964 in question in Griggs v. Duke Power Company and article 119 EEC, “their essential purpose was the same,” despite the provision in Griggs being about racial discrimination, not sex discrimination.88 AG Warner also cited Dothard v. Rawlinson,89 where the Supreme Court applied similar reasoning to sex discrimination. In following the CJEU jurisprudence, the Advocate General presented this way of thinking about discrimination as a matter of results rather than intent to 82 87

Id., at 934. Id., at 937.

83 88

Id., at 938. Id., at 937.

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85 Id., at 936. Id., at 936. 433 U.S. 321 (1977).

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discriminate.90 He established that a rule might infringe upon Community law forbidding discrimination if its application leads to discrimination, unless the differentiation is justifiable on “objective” grounds.91 If these cases accepted this way of thinking about discrimination concerning nationality, the same principle should be applied to sex discrimination.92 Thus, the provisions of article 119 EEC required the employer to show that the difference was justified on objective grounds unconnected to any discrimination on the basis of sex.93

the cjeu reasoning for maintaining social europe and shifting the cost of the employer The CJEU held that a difference in pay between full-time workers and parttime workers did not amount to discrimination prohibited by article 119 EEC unless it was merely an indirect way of reducing the level of pay of part-time workers on the ground that the group of workers was composed exclusively or predominantly of women.94 The Court held that if a considerably smaller percentage of women than men performed the minimum number of weekly working hours required in order to claim the full-time hourly rate of pay, the inequality in pay would be contrary to article 119 EEC if the pay policy of the undertaking in question could not be explained by factors other than discrimination based on sex.95 The Courts should also consider the difficulties encountered by women in arranging to work that minimum number of hours per week. Thus, where the hourly rate of pay differed according to whether the work was part time or full time, the national courts should decide in each individual case whether a pay policy, although represented as a difference based on weekly working hours, is in reality discrimination based on the sex of the worker.96 Because domestic courts were better equipped to consider the facts of the case, its history, and the employer’s intention,97 the Court seemed to instruct the Employment Court of Appeals to look for hidden intent to discriminate. In parallel, the Court acknowledged the difficulties of female workers to engage in full-time work. Where worse treatment of part-time workers disparately affected women, the concept of indirect sex discrimination exposed the unequal division within the family between men and women and 90

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Case C-152/73 Sotgiu v. Deutsche Bundespost [1974] 1 E.C.R. 153, Case 61/77 Commission v. Ireland [1978] ECR 417, Case 237/78 CRAM v. Toia [1979] E.C.R. 2645. Jenkins v. Kingsgate, Opinion of Advocate General Warner, delivered on 28 January 1981, at 937. 93 94 Id., at 937. Id., at 938–39. Jenkins v. Kingsgate § 13. 96 97 Case C-96/80, § 13. Id., § 14. Ibid.

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helped dismantle underlying power structures while also showing the need for social engineering against structural inequality.98 The Court held that article 119 EEC applied directly to all forms of discrimination that could become evident solely with the criteria of equal work and equal pay referred to by the article in question, without domestic or EU measures to define them.99 The UK Employment Appeals Tribunal heard the case after the CJEU expanded the ruling, and opted in favor of an interpretation of article 119 EEC as combatting systemic discrimination independently from the intent of the employer. The Tribunal considered the fact that 93 percent of all part-time workers in the United Kingdom were women, concluding that the impact of lower pay for part-time workers bore much more heavily on women than on men.100 The Tribunal also found that there was no intention by the employers to discriminate against women.101 For the Tribunal, a differential in pay between part-time workers who were predominantly women and full-time male workers could be justified as being due to a material difference by showing that the pay differential did in fact achieve economic advantages for the employer “other than cheap female labor.”102 The Tribunal expanded the protection compared to the CJEU, holding that indirect discrimination existed even where the employer had no intention of discriminating against women on the ground of sex but intended to achieve some different purpose such as the greater utilization of his machinery.103 The Tribunal held that indirect discrimination was unlawful under Section 1(1) (b) of the Sex Discrimination Act 1975, even if it was unintentional.104 The Tribunal cited Griggs and the British Race Relations Act 1976. According to the Tribunal, for the variation in pay to be “due to” a material difference, the employer should prove that there was some other matter that justified the pay differential.105 Showing that the employer had an intention to achieve some other legitimate objective would not be enough; it was also irrelevant whether the employer had no intention to discriminate.106 The employer would have to show that the pay differential actually achieved that different objective.107 98

99 Id., § 13. Id., § 17. Jenkins v. Kingsgate (Clothing Productions) Ltd. Employment Appeal Tribunal, 3 July 1981, [1981] 1 W.L.R. 1485 at 1490. 101 102 103 104 105 Id., at 1496. Id., at 1492. Id., at 1493. Ibid. Id., at 1494. 106 Id., at 1494. 107 Id., at 1494. The Tribunal thus found that to make section 1(3) of the Act of 1970 accord harmoniously with section 1(1)(b) of the Sex Discrimination Act 1975, it should be construed as imposing on the employer the onus of proving that the variation in pay was in fact reasonably required to achieve some other objective. The Tribunal cited Clay Cross, (Clay Cross [1978] 1 W.L.R. 1429, argued again by Lord Lester who presented the disparate impact concept discussing Griggs, Id., at 1494) to make the point that requirements that operated in an 100

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Further, the Tribunal pointed out that the CJEU did not sufficiently clarify the effect of article 119 EEC in relation to unintentional indirect discrimination, although there were passages in the judgment that supported the view that it was not enough for the employer simply to show that he had no intention of discriminating.108 The Tribunal chose to adopt a more extensive interpretation of article 119 EEC and to interpret UK statutes on the issue as conferring greater rights on employees than they enjoyed under the Treaty.109 Therefore, in order to show a “material difference”, an employer should show that the lower pay for part-time workers was reasonably necessary in order to achieve an objective other than one related to the sex of the part-time worker.110 The fact that the applicant was a part-time worker whereas the comparable man was a full-time worker was not in itself a material difference. The Tribunal noted that it was conscious that its decision might have farreaching consequences, involving many industrial and other employers in increased labor costs. As analyzed earlier, the Industrial Tribunal held that in the case of parttime work, the fact that the weekly working hours amounted to 75 percent of the full working hours was sufficient to constitute a material difference between part-time work and full-time work to justify the difference in the rate.111 Even if we suppose that the economic argument is scientifically pertinent, the importance of the CJEU decision lies in the fact that it imposed upon the employer the cost to promote Europe as a “social” union. However, studies undertaken at the time showed that there was no empirical evidence that costs associated with part-time employment such as recruitment, supervision, training, services, and welfare provisions were on average higher than for full-time workers, in spite of the fact that this was a widely held belief.112 Thus, the costs involved in part-time and full-time work were not so different. The decision of the Industrial Tribunal seems to be in line with wider economic policies in the EU according to which employers must bear the cost of integrating women in the labor market.113

indirectly discriminatory fashion had to be objectively justified as being required for some purpose other than a purpose linked to the sex of the person on whom the requirement was imposed. 108 109 110 Id., at 1494. Id., at 1491. Id., at 1495 within section 1(3) of the Act of 1970. 111 Id., § 4. 112 See Erika Szyszczak, Differences in Pay for Part-Time Work, The Modern Law Review, supra at 673. 113 See part (2).

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the migration of the idea of systemic discrimination from the united states to the eu Although the idea to combat systemic discrimination first emerged in the United States, its judicial evolution significantly undermined its application. Contrastingly, in Europe this idea evolved toward an effective legal tool to increase the protection of discriminated groups. Three elements are crucial in understanding this subsequent judicial divergence in the interpretation of two similar legal doctrines: first, the importance of the intention of the employer; second, the kind of cases to which it is applied; and third, the evaluation of the defenses available to employers. First, in Jenkins the CJEU referred to the intention of the employer as an element that domestic courts should evaluate in defining whether the difference in the hourly rate of pay is sex-based discrimination. The initial theory of disparate impact was conceived as a way of combatting systemic discrimination independently from the intention of the employer. Under the disparate impact theory of liability, an employer’s facially neutral policy or practice may be unlawful, even absent a showing of discriminatory intent, if it has a significant disparate impact on a protected group. The disparate impact doctrine focuses on discriminatory consequences,114 and it is typically asserted in class actions challenging superficially neutral employment practices, which do not exist in Europe. Plaintiffs invoke the theory also on an individual basis,115 where they are required to show that the allegedly discriminatory practice directly resulted in harm to them.116 In contrast, in the United States this doctrine has evolved toward combating hidden discrimination where intent is difficult to prove.117 The doctrine of color-blindness weakened the concept even further. In recent interpretations, the anti-discrimination principle is seen as protecting individuals rather than groups. Persons who belong in historically dominant groups are seen as entitled to the same protection with those of non-historically disadvantaged groups. Laws making racial classifications are subject to strict scrutiny, which means that they can be sustained only in exceptional 114 115

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Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 (1977). Bacon v. Honda of Am. Mfg., Inc., 370 F.3d 565, 576 (6th Cir. 2004), Chrisner v. Complete Auto Transit, Inc. 645 F.2d 1251, 1257, 25 FEP 484 (6th Cir. 1981), Coopersmith v. Roudebush, 517 F.2d 818, 820–21 (11 FEP 247 (D.C. Cir. 1975). Pottenger v. Potlatch, Corp. 329 F.3d 740 (9th Cir. 2003), Coe v. Yellow Freight Sys. Inc. 646 F. 2d 444 (10th Cir. 1981). Richard A. Primus, Equal Protection and Disparate Impact: Round Three, 117 Harv. L. Rev., 494, 530 (2003).

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circumstances.118 More recently, fears of “balkanization” – of dividing civil society through the recognition and special protection of racial groups – are winning out.119 Race-conscious, superficially neutral laws that promote equal opportunity, such as disparate impact claims in employment discrimination laws, are upheld to the extent that race is not made salient in a way that threatens divisiveness.120 The Supreme Court in Ricci v. DeStefano held that race-based action, such as a concern to avoid employment policies that may cause disparate impact, is impermissible under federal antidiscrimination legislation.121 As a result, the employer is liable under the disparate impact statute unless it can demonstrate a strong basis that she did not allegedly cause disparate impact.122 Justice Scalia, in his concurring opinion, articulated the idea that Title VII’s disparate impact provisions “place a racial thumb on the scales . . . requiring employers to evaluate the racial outcomes of their policies and to make decisions based on those racial outcomes,” a type of decision-making that is discriminatory.123 In Europe, the indirect discrimination doctrine evolved away from the intention of the employer. When Jenkins returned to the British Employment Appeal Tribunal, Court President Sir Nicolas Browne-Wilkinson stated that the CJEU’s judgment was unclear and that he would apply his own reinterpretation of national law, holding that unintentional indirect discrimination against part-time female workers was contrary to the Equal Pay Act, even if not unlawful under article 119 EEC.124 Following Jenkins, the CJEU recognized that article 119 EEC applied to unintentional indirect discrimination and to policies having discriminatory effects.125 In

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Following US Supreme Court’s decisions in City of Richmond v. J.A. Croson Co. 488 U.S. 469 (1989) and Adarand Constructors v. Pena 515 U.S. 200 (1995). See Reva Siegel, From Colorblindness to Anti-Balkanization: An Emerging Ground of Decision in Race Equality Cases, 120, The Yale Law Journal, 1278 (2011). 121 Id., at 1278. Title V of the Civil Rights Act of 1964. Ricci v. DeStefano, at 557 U.S. 557, at 563. The case concerned an examination system for promoting firefighters adopted by the City of New Haven, which the City decided to discard as it had a disparate impact on minority candidates. Plaintiffs were white successful applicants who were not promoted, since the examination results were set aside. The Supreme Court held that allowing employers to violate the disparate-treatment prohibition based on a mere goodfaith fear of disparate-impact liability would encourage race-based action at the slightest hint of disparate impact; id. at 581. In this case the Court found that there is no strong basis in evidence to establish that the test was not job related and consistent with business necessity. Id., at 594. Catherine Barnard, Indirect Discrimination: Interpreting Seymour-Smith, 58 Cambridge L. J. 399–412, 412 (1999). Case C-170/84 Bilka-Kaufhaus GmbH v. Weber Von Hartz [1986] ECR 1607; Case C-171/88, Rinner Kühn [1989] E.C.R. 2743.

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Bilka-Kaufhaus v. Weber,126 the CJEU held that there was a violation of article 119 EEC when the employer excludes part-time employees from its occupational pension scheme. In addition, it held that there was a violation of article 119 EEC when the exclusion of part-time employees affected a far greater number of women than men unless the exclusion relied on objectively justified factors unrelated to any discrimination on grounds of sex.127 The case was significant because it narrowly defined what constituted an “objective” justification.128 A measure was not “objectively” justified if there was a less discriminatory alternative.129 The case allowed plaintiffs to establish a prima facie case more easily, and made the employer’s burden heavier compared to that in the United States.130 As Catherine Barnard noted, maintaining the prohibition of unintentional discrimination makes EU law more potent than US law in combating systemic discrimination.131 The concept of fighting discrimination in EU law is closer to a goal of “equality of results” rather than simply equal opportunity.132 This stands in sharp contrast with the US context where the dominant ideology favors the latter rather than the former. The US doctrine of disparate impact has evolved toward combatting discrimination where the employer intends to discriminate, but where intent is difficult to 126

Case C-170/84 Bilka-Kaufhaus GmbH v. Weber Von Hartz [1986] ECR 1607. The Case concerned a female employee employed initially as a full time sales assistant, who chose to work part time after eleven years of service. Her employer refused to pay her an occupational pension, since she had not worked full time for at least ten years over a total period of twenty years. Mrs. Weber asserted that the requirement of a minimum period of full-time employment for the payment of an occupational pension placed women workers at a disadvantage, since they were more likely than their male colleagues to take part-time work so as to be able to care for their family and children (Bilka § 6). The employer argued that it was not guilty of breach of the principle of equal pay, since there were objectively justified economic grounds for its decision to exclude part-time employees from the occupational pension scheme. The employment of full-time workers entailed lower ancillary costs and permitted the use of staff throughout opening hours (Bilka § 7). 127 Id, at 1630. 128 Exclusion of part-time employees from an occupational pension scheme on the grounds that the employer seeks to employ as few part-time workers as possible must be an objective served by means that correspond to a real need on the part of the undertaking, and that are appropriate and necessary. 129 See Dagmar Schiek, Lisa Waddington & Mark Bell, Cases, Materials and Text on National, Supranational and International Non-Discrimination Law (2007), at 357. 130 Julie Suk, Disparate Impact Abroad, supra note 8. 131 Cf. Catherine Barnard, Gender Equality in the EU: A Balance Sheet, in The EU and Human Rights, 238 (Philip Alston ed., 2000). 132 Risa L. Lieberwitz, Employment Discrimination Law in the United States: On the Road to Equality?, in New Developments in Employment Discrimination Law, 1, 21 (Roger Blanpain ed. 2008).

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prove.133 This inevitably reduces its scope. In the EU, however, judges can interpret the doctrine of “indirect discrimination” to combat social inequalities and do away with wider systemic discrimination independently of whether hidden intent exists or not. Second, whereas in the United States the disparate impact doctrine is mostly used in the access to the workplace context and promotion therein, the CJEU has referred to the concept in cases concerning remuneration and redistribution, in particular concerning the attribution of welfare benefits. In the US labor system, which is much less protective than the one currently valid in the EU Member States, Title VII works as raising the standards of protection for employees in case some of the criteria that affected the employers’ choice are one of the prohibited grounds of discrimination.134 The “at will” doctrine of employment (which serves to facilitate the movement of employees among different employers) is limited by Title VII, which institutes a system of limits in the freedom of choice of employers. These limits operate as if there were a good-cause requirement on the regulation of the access to employment and the circumstances of promotion of the categories of employees protected by the act. The disparate impact doctrine thus has the effect of limiting the discretion of employers in their choice of qualified employees for the posts they have available. A similar argument as the one that the CJEU upheld, that consolidated social inequality of women may lead to market wages that have a disparate impact on women, was rejected by US courts. For instance, a federal court held that the doctrine of disparate impact refers only to employment practice concerning a single point in the “job selection process.” The Supreme Court has not been favorable to using the disparate impact theory in its interpretation of the Equal Pay Act.135 It held that courts should not substitute their judgment for the judgment of the “employer . . . who [has] established and applied a bona fide job rating system.”136 It also held that employers are allowed to differentiate in pay based on seniority, merit, quantity, or quality of production

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Ioanna Tourkochoriti, ‘Disparate Impact’ and ‘Indirect Discrimination’: Assessing Responses to Systemic Discrimination in the US and the EU, supra at 303. Title VII of the Civil Rights Act of 1964 (Pub. L. 88-352) (Title VII), as amended, as it appears in volume 42 of the United States Code, beginning at section 2000e. Title VII prohibits employment discrimination based on race, color, religion, sex, and national origin. County of Washington v. Gunther, 452 U.S. 161, 170–71, City of Los Angeles Dep’t of Water & Power v. Manhart, 435 U.S. 702, 710 n. 20. For an analysis, see Julie Suk, Disparate Impact Abroad, supra at 8, Nicole Buonocore Porter and Jessica R. Vartanian, Debunking the Market Myth in Pay Discrimination Cases, 12 Geo. J.G.L., 159 at 182. County of Washington v. Gunther, 452 U.S. 161, at 171.

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or any other factor other than sex, even though such differentiation might otherwise violate the act.137 Overall, US courts have not been sympathetic to disparate-impact claims of part-time workers.138 In contrast, the CJEU has used the concept to amend precisely the circumstances that result in less pay for women. Jenkins stands as an example of legal translation that operates differently in the new legal context compared to the one from which it emerged.139 In the EU, judges have interpreted the doctrine of indirect discrimination as a medium of expanding welfare and filling in gaps in the protection that are seen as assuring the free movement of employees.140 The concept has played an important role in facilitating free movement by enabling the addition of time periods taken into consideration by the different national legislations and greater benefits in favor of immigrant workers and the beneficiaries associated with them for the calculation of welfare benefits. The Court has also been conscious of its limits and that only the creation of a unified system of social security can fully suppress obstacles to the free circulation of persons, which is not within the powers of the Community.141 Third, there is a difference between how courts across the Atlantic evaluate the defenses foreseen in reference to the employer policies. Whether a rule against discrimination is effective or not depends on the exceptions that are carved in it. The US doctrine of disparate impact and the EU doctrine of indirect discrimination foresee some legal defenses in favor of the employer. A broad interpretation of those legal defenses weakens anti-discrimination policies. A policy that causes disparate impact can be upheld if it is imposed by “business necessity” and is related to “job performance”.142 The application of these concepts by US courts has led to a weakening of the antidiscrimination policies. Economic necessities that benefit business practices very often win out against anti-discrimination goals.143 US courts have interpreted the business necessity requirement to accept a more broad range of policies imposed by the employer to justify discriminating measures. According to recent case law, these policies “need not be perfectly tailored to be consistent with business necessity”, so that employers “need not set the bar so low that

137

138 Id., at 169. Illhardt v. Sara Lee Corp. 118 F.3d 1151, 1157 (5th Cir. 1997). See Maximo Langer, From Legal Transplants to Legal Translations: The Globalization of Plea Bargaining and the Americanization Thesis in Criminal Procedure, 45 Harv. J. Int’l L. 1, 1–39 (2004). 140 Pierre Garrone, La Discrimination Indirecte en Droit Communautaire: Vers Une Théorie Générale, 30 Revue Trimestrielle De Droit Europeen, 425–49, at 439. 141 142 Ibid. Griggs, 01 U.S. at 431, 39 USL.W. at 439. 143 See Ioanna Tourkochoriti, ‘Disparate Impact’ and ‘Indirect Discrimination’: Assessing Responses to Systemic Discrimination in the US and the EU, supra. 139

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they consider an applicant with some, but unreasonably low probability of successful performance.”144 Under EU law, a prima facie neutral measure amounts to indirect discrimination only if it is not objectively justified. Under the definition of indirect discrimination in the Racial Equality and Employment Equality Directives, objective justification means that a measure leading to apparent indirect discrimination has a legitimate aim and that the means chosen to achieve it are appropriate and necessary.145 The CJEU’s interpretation of “objective justification” has strengthened the indirect discrimination doctrine. Even though it is broader than the concept of “business necessity, European Courts accept that the requirement is rarely met.”146 The CJEU interpreted objective justification in two elements: the definition of an objective that a prudent employer should have in mind, such as the attraction of labor that is of a caliber and number required for the enterprise; and an appraisal of the efficacy of the disputed policy in achieving that objective.147 Objective justification requires a legitimate aim and must pass a proportionality test: “[T]he measures chosen by the employer correspond to a real need on the part of the undertaking, are appropriate with a view to achieving the objectives pursued, and are necessary to that end.”148 Purely budgetary considerations cannot serve as an objective justification.149 The CJEU has been reluctant to accept differential treatment based on reasons of management that are related to economic concerns, while it is more willing to accept differential treatment based on broader social policy goals with fiscal implications.150 The CJEU found that there was an objective justification when the very survival of an insurance compensatory scheme was at stake.151

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El v. Southeastern Pennsylvania Transportation Authority, 479 F.3d 232, at 242 (3d Cir. 2007). The CJEU laid down this three-stage test for the national court to apply in Case C-170/84 BilkaKaufhaus [1986] E.C.R. 1607 § 36. The measures must “correspond to a real need on the part of the undertaking,” they must be “appropriate with a view to achieving the objectives pursued,” and they must be “necessary to that end.” 146 Tourkochoriti, supra note 136. 147 Richard Plender, Equal Pay for Men and Women: Two Recent Decisions of the European Court, supra at 651. 148 Case C-170/84 Bilka-Kaufhaus GmbH v. Weber Von Hartz [1986] E.C.R. 1607. Thus a pension scheme excluding part-time employees from occupational pension constitutes indirect discrimination against women because they constitute the majority of part-time workers, unless the difference in enjoyment can be justified. 149 Joined Cases C-4/02 and C-5/02 Hilde Schönheit v. Stadt Frankfurt am Main and Silvia Becker v. Land Hssen [2003] E.C.R. I-12575, § 85. 150 European Union Agency for Human Rights and Council of Europe, Handbook on European Non-Discrimination Law, 45 (Luxemburg, 2011). 151 Case C-317/93 Nolte v. Landesversicherungsanstalt Hannover [1995] E.C.R. I-4625, 14 December 1995. 145

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Thus, the jurisprudence on systemic discrimination varies across the Atlantic where in the EU Courts have indicated that the state should intervene in order to impose redistributive policies to a greater extent than in the United States.

reassessing the divergence between the eu and the united states The CJEU previously held that a different salary rate for two different professions might be discriminating against women where more women than men happen to pursue the profession with the lower salary rate. In Enderby,152 the CJEU found discrimination even in the difference in pay between two jobs of “equal value” where more women than men happen to pursue the profession with the lower salary rate. The case concerned salary rates for speech therapists and pharmacists – the first carried out almost exclusively by women and the later conducted predominantly by men.153 The Court interpreted article 119 EEC as requiring the employer to show that the difference was based on objectively justified factors unrelated to any discrimination on grounds of sex.154 The fact that the respective rates of pay agreed on by a collective bargaining processes that – although carried out by the same parties – were distinct and taken separately had in itself no discriminatory effect, and as such was not sufficient objective justification for the difference in pay between those two jobs.155 It was for the domestic courts to determine, if necessary by applying the principle of proportionality, whether and to what extent the shortage of candidates for a job and the need to attract them by higher pay constituted an objectively justified economic ground for the difference in pay between the jobs in question.156 This case was in between direct and indirect discrimination, a case of “quasi-direct discrimination.”157 The court first considered separate structures of collective bargaining as well as market forces, which played some part in the disparity in pay since there was a shortage of pharmacists, resulting in higher salaries to entice job applicants into the labor market.158 In this case, although there was no neutral rule, there was a disparate impact between different social groups.159 152

153 157

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Case C-127/92 Enderby v. Frenchay Health Auth. [1993] E.C.R. I-5535. The CJEU found discrimination even in the difference in pay between two jobs of “equal value,” speech therapists and pharmacists, which were, however, remunerated differently, the first carried out almost exclusively by women and the later predominantly by men. 154 155 156 Id., at 5568. Id., at 5572. Id., at 5574. Id., at 5576. Simon Forshaw and Marcus Pilgerstorfer, Direct and Indirect Discrimination: is there something in between?, Industrial Law Journal 347, 351 (2008). 159 Ibid. Id., at 352.

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A similar argument stressing that market salary rates may have a disparate impact on women due to their social circumstances also came before the US courts, without success. The court did not uphold that the State of Washington’s practice of taking market rates into setting wages had an adverse impact on women.160 The Court held that the disparate-impact analysis concerns only “a single point in the job selection process.”161 The decision to base compensation on the competitive market, rather than on a theory of comparable worth, involved the assessment of factors not easily ascertainable to be appropriate for disparate-impact analysis. Reliance on a free market system that compensated employees in male-dominated jobs at a higher rate than employees in dissimilar female-dominated jobs was not in and of itself a violation of Title VII. The employer in this case determined through a “comparable worth” study that it was paying women less for jobs comparable in value to those performed mostly by men.162 Commentators of this Atlantic divide put forward different interpretations. Katerina Linos addresses it as a phenomenon of path dependence.163 According to Linos, critical junctures lead to choices, which are reinforced later, creating a feedback loop that results in momentous consequences later in time.164 These critical junctures are intervals during which judge’s ideologies, legislators’ preferences, and social movements efforts have their greatest influence on doctrinal development.165 Because early claims involved race in the United States, as soon as the doctrine of race-blindness gained ground, it affected the response of the United States to key doctrinal questions.166 In Europe, on the contrary, gender consciousness and the belief that certain socially relevant attributes are intrinsically connected and worthy of protection guided EU courts’ answers to the same questions.167 However, path dependence does not operate in a vacuum; rather, it operates through the support of different political ideologies held by lawyers and judges justifying more or less state intervention. The ideology of Europe as a social Union that should promote integration of marginalized groups or populations takes place to some extent at the expense of the employers’ interests. In contrast, the libertarian ideology in the United States has

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AFSCME v. State of Washington, 770 F.2d 1401 (9th Cir. 1985) citing Atonio v. Wards Cove Packing Co. 768 F.2d 1120. 161 Id, at 1405. 162 AFSCME, 770 F2d at at 1403. See also Nicole Buonocore Porter and Jessica R. Vartanian, Debunking the Market Myth in Pay Discrimination Cases, 12 Geo. J.G.L., 159 at 162. 163 Katerina Linos, Path Dependence in Discrimination Law: Employment Cases in the United States and the European Union, supra. 164 165 166 167 Id., at 117. Id., at 117. Id., at 117. Id., at 117.

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prevented state intervention in discriminatory practices in a way that would burden employers. This difference in the conception and interpretation of systemic discrimination is due in part to a different ideological consideration of the systemic factors that cause the discrimination. For instance, the US legal order is primarily oriented toward integrating employees into the labor market. Courts have deployed the doctrine of disparate impact to protect the right against discrimination in hiring and promotion.168 Finally, state intervention in the United States is very limited, and although there can be a minimum wage, this is not the result of what appears “just” from a moral point of view.169 In contrast, the EU courts have interpreted the concept of “indirect discrimination” in a way that encourages Member States to engage in wider redistributive policies concerning the calculation of salaries and welfare benefits.170 Jenkins shows that a marketimposed salary rate may be indirectly discriminating against women if it affects them disproportionately. In Europe, the government can legitimately intervene in the economy in order to limit negative liberties in view of protecting positive liberties.171 For instance, governments can legitimately impose wider redistributive policies through labor and employment schemes.

the background to the divergence The notion that a common social policy was essential to integration so that the population of the Member States could identify with European-level solidarity was omnipresent ever since the creation of the EEC.172 Equality in pay was 168

The Supreme Court adopted the doctrine in Griggs v. Duke Power Co 401 U.S. 424 (1971), see supra note 7. See also Julie Suk, Discrimination at Will: Job Security Protections and Equal Employment Opportunity In Conflict, 60 Stan. L. Rev. 73 (2007). 169 Imposing a minimum wage is consistent with a libertarian theory of government intervention in the economy to the extent that it is necessary for the function of the economic system, as Friedrich Hayek has also shown; see Friedrich Hayek, The Essence of Hayek, 87 (Chiaki Nishiyama & Kurt R. Leube eds. 1984). Apart from that, however, the government is not legitimized to define further wages in any other way that might seem just on the basis of non market criteria. 170 For an analysis, see Ioanna Tourkochoriti, Freedom of Expression and the Protection of Human Dignity and Privacy in the French Legal Order and the Legal Order of the United States: A Study on two Different Constitutional ex ante Understandings (24 September 2010) (Dissertation Manuscript in French, École des Hautes Études en Sciences Sociales, Paris, France). James Whitman, The Two Western Cultures of Privacy: Dignity versus Liberty, 113 Yale L. J. 1151 (2004), James Q. Whitman, “Consumerism and Producerism: A Study in Comparative Law”, 117 Yale L. J. 340 (2007). 171 Id. 172 Anna van der Vleuten, The Price of Gender Equality, Member States and Governance in the European Union, supra at 71.

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one of the key objectives of the Social Action Program, and the European Commission played an important role in the inclusion of equality of rights.173 With France setting the standards, the Directive on Equal Pay174 became a norm that was above the minimum common denominator level at the time in Europe. The debates on the elaboration of both the equal pay and the equal treatment directive indicate that European governments such as France managed to impose it on countries for which this would imply high costs, such as Britain.175 Jenkins, thanks to the idea of disparate impact, promoted this policy even further. More generally, after a number of preliminary rulings, governments amended their legislation on issues of equal pay and gender discrimination to avoid the risk and economic cost of litigation.176 In parallel, CJEU rulings strengthened the actual contents and impact of the directives, taking governments by surprise as to the implementation of directives and bringing about results that they were not able to foresee when they approved the directives.177 Thus, the Court became a central agent of the promotion of social cohesion in Europe. European social cohesion was based on promoting redistributive goals. Furthermore, a trend emerging on the level of the states toward equalizing social security provisions for part-time and full-time workers was consolidated on the EU level by a directive on part-time work. This directive sought to eliminate discrimination between part-time workers and full-time workers.178 This led progressively to the elaboration of Directive 2002/73/EC, which reinforced protections against sex-based discrimination and strengthened the protections for pregnant women or women on maternity leave. The directive also imposed a number of costly gender equality policies.179 In the United States, scholars were skeptical about the effectiveness of the Equal Pay Act to bring about effective equality in pay. The “comparable worth” approach was elaborated in an attempt “to reform the market so that female-dominated work is valued as highly as male-dominated work”.180 Nevertheless, US courts did not seem very willing to accept arguments based on this.181 Although market defenses were not successful in early Equal Pay Act cases, they became more attractive in modern ones.182 Employers are

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174 175 176 177 Id., at 72. See supra note 19. Id., at 86–87. Id., at 133. Id., at 133. 179 Directive 97/81/EC. See Id., at 151. Id., at 161. 180 Deborah Thompson Eisenberg, Money, Sex And Sunshine: A Market-Based Approach to Pay Discrimination, 43 Ariz. S.L.J., 951, at 956. 181 Sims-Fingers v. City of Indianapolis, 493 F.3d 768, 771 (7th Cir. 2007), Am. Nurses Ass’n v. Illinois, 783 F.2d 716, 720 (7th Cir. 1986), Christensen v. Iowa 563 F. 2d 353, 356 (8th Cir. 1977). 182 Deborah Thompson Eisenberg, Money, Sex And Sunshine, supra at 965–66. 178

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usually successful in asserting market-based reasons other than sex-based reasons.183 There is a split in federal courts that revolves around the acceptability of market defenses in pay discrimination cases. Some courts are continuing to reject market defenses and others readily accept them.184 When plaintiffs argue that the wage market systemically discriminates against women, courts put the burden on them to prove such systemic intentional discrimination.185 In the EU, the absence of the intent requirement in CJEU case law combined with the narrowing of what constitutes an “objective” justification for discrimination law seeks to mitigate market imposed, structural inequalities. This makes it harder for employers to justify their policies.

conclusion: migration and the different evolutions of anti-discrimination doctrine While in the United States the doctrine of disparate impact started as a medium to combat unconscious and unintended discrimination, it progressively evolved in federal jurisprudence toward protecting hidden discrimination regardless of intent. On the contrary, the CJEU initially looked for intent but later focused on wider systemic discrimination that affected the remuneration of the persons concerned. Progressively, the Community extended already existing protections, standards, and concepts to cover discrimination on other grounds. It issued a number of directives that prohibited discrimination on the grounds of racial or ethnic origin186 and on the grounds of religion or belief, disability, age, and sexual orientation.187 These directives include the concept of “indirect” discrimination and define its content as elaborated in the case law of the Court of Justice.188 They define indirect discrimination as occurring “where an apparently neutral provision, criterion or practice would put persons [. . . who possess that characteristic . . .] at a particular disadvantage compared with other persons.”189 Inspired by this definition, the European Court of Human Rights (ECtHR) held that “a difference in Treatment may take the form of disproportionately prejudicial effects of a general policy or measure which, though couched in 183 185 186 188

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184 Id., at 966. Id., at 969. Wernsing v. Dep’t Human Servs., 427 F.3d 466, 470 (7th Cir. 2005). 187 Directive 2000/43/EC, O.J. 2000, L 180/22. Directive 2000/78/EC, O.J. 2000, L 303/16. See Lisa Waddington and Mark Bell, More Equal than Others: Distinguishing European Union Equality Directives, 38 Common Market L. R. 587, 591 (2001). Racial Equality Directive Article 2(2)(b), Employment Equality Directive art. 2(2)(b), Gender Equality Directive Article 2(1)(b), Gender Goods and Services Directive, Article 2(b).

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neutral terms, discriminates against a group.”190 Jenkins became the first in a line of legal cases that further strengthened the indirect discrimination doctrine. The CJEU has created a legal instrument in the area of remuneration and welfare benefits that protects individuals against systemic discrimination more effectively than the disparate impact doctrine posed by the US Supreme Court in Griggs and elaborated in subsequent case law. Nevertheless, as the CJEU examines future cases that concern discrimination on the basis of race and other criteria forbidden by the directives against discrimination,191 it will very likely find inspiration in the valuable legal tools elaborated by US courts, despite a recent tendency toward weakening them in the country of origin. Hopefully, the strategic use of foreign legal doctrines by the CJEU will show the same commitment to promoting the social integration toward these other groups that are and have historically experienced discrimination as shown in the case of women developing an equally robust doctrine.

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D.H. and Others v. the Czech Republic (Application no. 57325/00), 13 November 2007, § 184, Opuz v. Turkey, Application no.33401/02, 9 June 2009, § 183, Zarb Adami v. Malta, Application no 17209/02, 20 June 2006, § 80. See supra note 11.

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23 Mademoiselle Gravier and Equal Access to Education Success and Boundaries of European Integration

gisella gori

introduction It is not uncommon in European Union (EU) law that certain judgments of the European Court of Justice (ECJ) continue to have effects and implications for a long time after they have been delivered. Gravier1 is one of such cases in respect to EU action in the field of education and training, fields which traditionally fall within the powers of the Member States. On the one hand, the Gravier decision has been instrumental in building up the case for students’ mobility in the EU through a litigation jurisprudence that progressively developed the individual right to free movement for education and training purposes only.2 On the other hand, the Gravier jurisprudence propelled and strongly informed the evolution of EU education and vocational training policy-making competence. Subsequent ECJ decisions, consolidations of EU Treaty provisions and lengthy discussions on the legal basis of EU education and vocational training action programmes in the institutional arena were to a large extent prompted by this pivotal case. Thus Gravier was, and remains, one of the most emblematic jurisprudential inroads into Member States’ competencies and, concurrently, of EU (read Commission) innovative policy-making on education and training. However, the Gravier saga also shows that there are limits to what can be achieved on the basis of extensive judicial interpretation of treaty provisions. Significant inroads in their competence notwithstanding, Member States, in the end, remained in charge of ‘setting the boundaries’ when amending the EU treaties and they established institutional limits to EU education and

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Case C-293/83, Gravier v City of Liege, [1985] E.C.R. 593. It should not be forgotten that the free movement in the common market at the time meant free movement of workers and their families.

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vocational training competence in the Maastricht Treaty. While codifying the acquis, the restrictive approach characterizing the institutionalization of such competence was at the time the price to pay for the success of the ECJ judicial action and the related EU policy developments.3 But the Court case law legacy in term of individual rights has nonetheless continued to evolve through the notion of European citizenship. Gravier also represented the turning point of a litigation strategy in which the Commission was a smart player aiming to legitimise EU action on the subject matter. In fact, behind the case law and policy developments, there was the ECJ, but also the European Commission, which undeniably played a double role of litigant and policy-maker all along.4 Starting from scanty Treaty provisions, the institutional interaction between the ECJ and the Commission allowed the development of unanticipated EU competencies and legislative developments in the field of education and training. Simultaneously, the role played by some services of the Commission (i.e. the Task Force for Human Resources, Education, Training, and Youth first and the Directorate General of Education, Training and Youth – DG22 – later,5 as well as the Legal Service), and the dynamic of their interaction with the Member States, which often opposed the Commission’s stance, also resulted in a remarkable development of EU action. Generally, Member States (either individually or in the

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Consolidation occurred with the Maastricht Treaty which introduced articles 126 and 127, Education, vocational training and youth, subsequently renumbered as articles 165 and 166, Education, vocational training, youth and sport, in the 2010 consolidated version of the Treaty on the Functioning of the European Union. The role of the Commission as initiator and all along supporter of the development of the EU action on education and vocational training, notwithstanding the “legal wrangling” with the Member States, is extensively analyzed in “The history of European cooperation in education and training”, published by the European Commission, Office for Official Publications of the European Communities, in 2006. The publication was prepared by many of the leading actors from within the institutions of the time and thus provides a “first-hand” presentation of the evolution of the EU policy and the role played by the various institutions and the Member States. While recognizing the major impact of the Gravier judgment on the evolution of the education policy, the publication focuses on the policy-making process and the action programs put in place rather than on the judicial background; http://biblioteka-krk.ibe.edu.pl/ opac_css/doc_num.php?explnum_id=301 In the 1970s, education was dealt with by the Directorate General for Research. In 1981, it was moved into DG Employment and Social Affairs, renamed DG Employment, Social Affairs and Education. In 1989, the Delors’ Commission decided to set up a separate structure, the Task Force for Human Resources, Education, Training, and Youth, led by H.C. Jones. This became a full-fledged DG in 1995, named DG 22 - Education, Training and Youth. D. Lenarduzzi, who was heavily involved in developing the EU education action from the 1980s along with several other officials, led it as interim DG and then deputy. See “The history of European cooperation in education and training”, p. 36.

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Council of Ministers of the EU formation) tried to reassert their position when litigating cases before the Court, when negotiating new treaty provisions (Maastricht), and when adopting a new generation of education and vocational training programmes (Socrates and Leonardo) in the Council of the European Union. The divergences between the Commission and the Member States generally materialised in the different interpretation of the basic texts and the acquis communautaire, supported by the case law of the Court of Justice. Nonetheless, there were occasions when the Directorate General for Education, Training and Youth did not hesitate to espouse a more political vision at the expense of a strictly legal interpretation of the acquis purported by the Legal Service, and to assert and develop the Community competence in a way more likely to be accepted by Member States. The far-reaching expansion of EU competences and students’ rights occurred through the ECJ’s generous interpretation of the old provision on vocational training of the Rome Treaty to cover higher education (currently modified as article 166 TFEU).6 This extensive interpretation, combined with the application of the principle of equal treatment, made it possible to develop individual educational rights for any citizen of the Member States. Simultaneously, the gradual recognition of the vocational training provision as the legitimate legal basis for EU vocational training policy (including higher) education allowed the Commission to go further in proposing legislative action and action programs in the field. Gravier is thus a perfect example of judicial law-making in which the Court case law provided the ground for developing a new education policy (see discussion in the next section). It also demonstrates the Commission’s clever follow-up in creating a successful dynamic of integration by law following the paradigm of negative/positive integration, from the prohibition of discrimination amongst EU citizens to the launching of an education and training policy7 (see discussion in the third section of this chapter).

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For the sake of clarity, the article on vocational training is always referred to by its current number. However, it shall be kept in mind that its content was thoroughly amended by the Maastricht Treaty. Legal doctrine generally defines the dichotomy between negative and positive integration as one between “measures increasing market integration by eliminating national restraints on trade and distortions of competition and common European policies to shape the conditions under which markets operate”, where the first materialises through judge-made law and the supranational nature of EU law, while the second depends upon the agreement of national governments in the Council of Ministers. See Negative and Positive Integration in the Political Economy of European Welfare States, by F. Scharpf, in G. Marks, ed., Governance in the European Union, 1996, p. 15.

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mademoiselle gravier, or individual education and vocational training rights for everyone Gravier was a young French woman who wished to enroll in a four-year higher education art course to become cartoonist at the Academie Royale des Beaux Arts in Belgium, and who was asked to pay a higher enrolment fee than Belgian students paid. Gravier called upon the Court to ascertain whether a higher entrance fee to higher education imposed by universities on foreigners (so-called minerval) because of their nationality infringed upon article 18 TFEU on non-discrimination. The novelty of Gravier was to bring before the Court the question of whether an EU national who was just a student and was not exercising any freedom of movement of workers’ related right could seek equal access to a higher education course. This forced the Court to clarify if higher education was also vocational training, the latter being a notion that the Court had only dealt with in a line of case law dealing with education of EU workers exercising the freedom of movement for themselves and their families. Hence, to understand the meaning and impact of Gravier, it is necessary to put the case in context and briefly summarize how the evolution of education and vocational training rights and competencies occurred in the EU legal order up to Gravier and after such pivotal decision.

1974 to 1985 – Before Gravier As a consequence of the economic finality of European integration, the Rome Treaty addressed only vocational training8 and not education. Vocational training was, in fact, considered relevant to economic development in terms of providing young people with skills geared to a job. In most European countries, it traditionally consisted of technical training and/or apprenticeship at the secondary level, separate from general education. Education, which was considered essentially academic, was originally the object of scanty intergovernmental cooperation among Member States. When mentioned in secondary EU legislation, it was in relation to workers moving to another country

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The Treaty Establishing the European Economic Community, Mar. 25, 1957, art. 128 [hereinafter referred to as art/ 166 TFEU] wording was quite vague: “The Council shall, acting on a proposal from the Commission and after consulting the Economic and Social Committee, lay down general principles for implementing a common vocational training policy capable of contributing to the harmonious development both of national economies and of the Common Market.”

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to work, such as in Regulation 1612/68 on the free movement of workers.9 This is why the Court started to build Community competence in the subject matter by providing equal educational and training rights to EU workers and their family members moving to another EU country for work purposes. Regulation 1612/68 provided for the right to vocational training for workers themselves (article 7)10 and for access to education and training for their family members (article 12).11 Through the combined application of these provisions and the right of migrant workers not to be discriminated on the basis of nationality regarding social benefits (article 7, paragraph 2), the Court was able to affirm that children of workers who moved to another country were entitled to equal treatment with the nationals of the host Member State not only in regard to access to education but also with respect to all facilities provided to facilitate educational attendance, which included admission fees and maintenance grants.12

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The basic pieces employed by the Court have been the previous version of current article 18TFEU, i.e. Article 12 of the EEC Treaty, and EEC Regulation 1612/68 on the free movement of workers, OJ L 257/2 of 19/10/1968, in particular its Article 12. This Regulation has been repealed by Regulation (EU) no. 492/2011 of the European Parliament and the Council of 5 April 2011 on freedom of movement for workers within the Union, OJ L 141/2011. The new text has codified the related case law; however, the articles relevant to this analysis have not undergone substantial changes. Article 12 has become Article 10. Article 7 read: “1. A worker who is a national of a Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and should he become unemployed, reinstatement or re-employment. 2. He shall enjoy the same social and tax advantages as national workers. 3. He shall also, by virtue of the same right and under the same conditions as national workers, have access to training in vocational schools and retraining centers. 4. Any clause of a collective or individual agreement or of any other collective regulation concerning eligibility for employment, employment, remuneration and other conditions of work or dismissal shall be null and void in so far as it lays down or authorizes discriminatory conditions in respect of workers who are nationals of the other Member States.” Article 12 read: “The children of a national of a Member State who is or has been employed in the territory of another Member State shall be admitted to that State’s general educational, apprenticeship and vocational training courses under the same conditions as the nationals of that State, if such children are residing in its territory. Member States shall encourage all efforts to enable such children to attend these courses under the best possible conditions.” Cases C-9/74, Casagrande v. Landeshauptstadt München [1974] E.C.R. 773; C-235/87 Annunziata Matteucci v. Communauté française of Belgium and Commissariat général aux relations internationales of the Communauté française of Belgium [1988] E.C.R. 5589; C-3/90 M. J. E. Bernini v. Minister van Onderwijs en Wetenschappen [1992] ECR I-1071; C-308/89 Carmina di Leo v. Land Berlin [1990] ECR I-4185; Joined cases C-389 and 390/87, G.B.C. Eternacht and A.Moritz [1989] ECR 723.

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When presented with a series of cases13 concerning equal access to education and vocational training by EU nationals – including access to fees and maintenance grants – the Court generally followed one option of a twofold track determined by whether the applicant qualified as a worker or just as a student. The line of jurisprudence concerning the status of student-worker shows how generously the Court interpreted the current article 45 TFEU and the applicable secondary legislation in order to guarantee equal treatment, including access to social benefits. The extensive interpretation of the retention of the status of worker and the link between previous working activity and studies engaged in were the basic criteria referred to by the Court in its case law.14 In so doing the Court of Justice developed negative integration by building up case law centred on individual education and the vocational rights of nationals of Member States, and their family members, who exercised their freedom of movement to work in another European country. The Commission made extensive use of this common market–related jurisprudence to enlist a social dimension to the economic integration’s goal of the treaty. At the time, some Member States, particularly those who had a tradition of exporting manpower, such as Italy, were supportive of the Court’s far-reaching interpretation of secondary legislation providing their nationals with equal treatment in the receiving Member State, as in the Casagrande case.15 Other Member States, like Germany in that specific case, objected, stating that the EU lacked competence to intervene on education. While the Court acknowledged this argument, it eventually concluded that to achieve the goal of economic integration, Member States could be forced to adjust the organization of their education systems in a way not to discriminate against the children of nationals of other member States16. 13

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The majority of cases consisted in preliminary rulings which provided the ECJ with the opportunity to interpret EU law while leaving to national jurisdiction the task of applying it in the national legal order. The Court included trainee teachers and part-time worker with a pay lower than the minimum income as long as the activity was effective, genuine and not merely ancillary to the studies to be engaged (cases 53/81 D.M. Levin v. Staatssecretaris van Justitie [1982] ECR 1035; C-66/85 Deborah Lawrie-Blum v. Land Baden-Württenberg [1986] ECR 2121; C-39/86 Sylvie Lair v. Universität Hannover [1988] ECR 3161; C-197/86 Steven Malcolm Brown v. The Secretary of State for Scotland [1988] ECR 3205). See note 10. Casagrande was the son of a deceased migrant worker who was denied the awarding of an allowance to attend school in Germany because of his Italian nationality. Para.12 of the judgment reads: “[A]lthough educational and training policy is not as such included in the spheres which the treaty has entrusted to the Community institutions, it does not follow that the exercise of powers transferred to the Community is in some way limited if it is of such a nature as to affect the measures taken in execution of a policy such as that of education and training.”

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1985 – The Gravier Case and Its Implications The Gravier17 case inaugurated a line of jurisprudence that provided EU nationals moving only for study purposes with a right to equal treatment regarding fees imposed for access to education and vocational training. To achieve this goal, the Court looked at the exercise of the free movement of these persons from the perspective of a preparatory step for a future economic activity. The Court, at the time, excluded equality of treatment for the awarding of maintenance grants.18 The question for the Court in Gravier was whether the treaty also covered the conditions of access to higher education so that the non-discrimination principle (current article 18 TFEU) applied. The Court was able to recognize the equal right of access to higher education for students in a logical series of steps. First, it broadly interpreted current article 166 TFEU recognizing that it provided a competence sufficient to lay down a vocational training policy, which was ‘gradually being established’ by the Court.19 Building on a previous case, Forcheri,20 the Court concluded that the combined effect of article 166 and Council Decision 63/266 laying down general principles for implementing a common vocational training policy were sufficient to recognize the existence of such policy.21 It is worth noting that, contrary to previous case law, in Gravier the Court asserted that only ‘educational and organization and policy are not as such included in the spheres which the Treaty has entrusted to the Community institutions’, thereby suppressing the reference to vocational training.22

17 18

19 20

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Case C-293/83 Françoise Gravier v. City of Liège [1985] ECR 593, That is, any form of financial assistance provided to students for their subsistence and not geared towards tuition. Following jurisprudence has partially reverted this point too (see iv below). Case C-293/83, para. 23. Case C-152/82, Forcheri v. Belgian State, [1983]ECR 2323. Forcheri was the wife of a Community official who was asked to pay a higher fee than Belgian students to enroll in a nonuniversity further education establishment in Belgium. The objectives of vocational training policy included also that of providing EU nationals with the opportunity to follow vocational training courses in Member States where they intend to work or whose vocational training programs includes the subject desired. See also Case C-152/ 82, para. 15. In Forcheri the Court affirmed: ‘[A]lthough it is true that educational and vocational training policy is not as such part of the areas which the treaty has allotted to the competence of Community institutions, the opportunity for such kinds of instruction falls within the scope of the treaty’ (para. 17).

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Second, the Court held that non-university artistic higher education fell under the notion of vocational training to the extent that it prepares students for an occupation. In particular, the Court affirmed that ‘any form of education which prepares for a qualification for a particular profession, trade or employment or which provides the necessary training and skills for such a profession, trade or employment is vocational training, whatever the age and the level of training of the pupils or students, and even if the training program includes an element of general education’.23 Hence, since higher education was vocational training, it was covered by the Treaty and the general principle of non-discrimination on the ground of nationality applied. As a consequence, the imposition of higher registration fees on Community nationals constituted discrimination on grounds of nationality, and was thereby contrary to article 18 TFEU.24 Gravier was innovative and pivotal for three main reasons. First, the Court legitimized the provisions of individual rights to Community nationals who were not, at least directly, economic agents. Even if the indirect link to market integration persisted to the extent that the vocational training has an economic consequence, it was nonetheless a remote connection. As a “fallout” of market integration, the Gravier case helped scores of EU students to gain equal access to higher education institutions around Europe. Secondly, the decision brings along an extensive interpretation of article 166 TFEU to include at least some forms of higher education (artistic in this case). Some Member States vigorously opposed this interpretation (Belgium, Germany and the United Kingdom) at the time of the judgment and, from then, on every appropriate occasion. In a following case, Blaizot,25 the Court extended its definition of vocational training to include traditional university higher education, such as a course in veterinary science. Blaizot and sixteen other plaintiffs brought a case before a national court against the refusal of the University of Liège, the Catholic University of Louvain, the Free University of Brussels and the University Centre of Notre Dame de la Paix, Namur, to repay the supplementary

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Case C-293/83, para. Article 18 (ex Article 12 TEC) reads: “Within the scope of application of the Treaties, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited. The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may adopt rules designed to prohibit such discrimination.” C-24/86 Blaizot [1988] ECR 379. The Court has subsequently reaffirmed that both higher education and university education constitute vocational training in case C-147/03 Commission of the European Communities v. Republic of Austria [2005] ECR I-05969.

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enrollment fees (minerval) which they paid before 13 February 1985, the date of delivery of the Gravier judgment. On that occasion the Court further developed the Gravier’s definition of vocational training to include ‘university studies which are intended to provide students, at academic level, with certain knowledge, training, and skills as preparation for specific occupations’ and independently from whether ‘the final academic examination directly provides the required qualification for a particular profession.’ The Court set, nonetheless, some boundaries where it affirmed that ‘the only exceptions are certain courses of study which, because of their particular nature, are intended for persons wishing to improve their general knowledge rather than prepare themselves for an occupation.’26 Finally, equality of treatment in regard to university entrance fees went to the core of Member States competence of deciding how their education system is organized since fees are a relevant component of the financing of education. The only self-restraint the Court exercised was in regard to maintenance grants, which were excluded from falling under the scope of nondiscrimination. This distinction is at the origin of much more litigation and legal activism by the Court (see III (iv)).

The Dynamics behind Gravier: The Role of the Commission and the Reaction of the Member States The role played by the Commission was essential to the extension of the Court’s jurisprudence to students, and the Gravier and Blaizot cases are symbolic of the Commission vision. The involvement of the Commission services in charge of education and vocational training and Legal Service in helping to forge the case law through the systematic intervention in the cases discussed before the Court followed a double-track strategy: it first made full use of individual cases litigated before the Court, and then switched to infringement procedures and inter-institutional litigation to consolidate the new acquis communautaire. In the individual cases, the Commission first aimed to refine the educational rights of the children of migrant workers using at length common market legislation (Regulation number 1612/68). It then opted in Gravier to make use of the free movement of workers provisions 26

Case C-24/86, paras. 18–20. The Court nonetheless did not recognized the plaintiffs’ right to be reimbursed because article 18TFEU may not be relied on in support of claims regarding supplementary enrolment fees improperly charged prior to the date of this judgment, except in respect of students who brought legal proceedings or submitted an equivalent claim before that date.

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(articles 45, 49 and in particular Article 56 TFEU) combined with article 166 TFEU to provide equal treatment to actors who were not prima facie economically active in the common market. It was only as an alternative that the Commission contended that the imposition of a fee amounted to discrimination on the basis of nationality (article 18 TFEU). When the principle of non-discrimination became the solution retained instead by the Court in Gravier, the Commission quickly rallied, as demonstrated by the case law following that decision, which mainly concerned access to education in Belgium. Some of these cases were prompted by the Gravier ruling, which induced other foreign students to seek recovering the higher enrolment fees paid to the Belgium universities (Blaizot and Barra).27 But the Commission also took the further step of bringing an infringement procedure against Belgium itself, which had meanwhile amended existing legislation after the Gravier ruling to reiterate that foreign students, including EU nationals, were charged a higher enrolment fee than Belgians (the minerval) for entrance into university and non-university higher education.28 The Commission this time contended that the law infringed upon article 18 TFEU, but the Court dismissed the case for procedural violations29. Such a decision was not problematic, however, because on the same day the Court delivered judgments in the Blaizot and Barra cases, thereby ensuring the application of the principle of non-discrimination via the extension of the notion of vocational training to university education. Because this definition created a rather delicate issue which Belgium (the defendant), as well as Denmark and United Kingdom, pronounced themselves against in the litigation process, it is likely that the Court opted to rule indirectly through preliminary rulings, thereby leaving to national courts the task of declaring national law incompatible with Community law. While it is impossible to ascertain precisely the extent of the role played by the Commission in the making of this jurisprudence,30 it is nonetheless clear that it was a 27

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Cases C-24/86, above, and C 309/85, Bruno Barra v Belgium State and City of Liège, [1988] ECR 355. Case C-293/85, Commission of the European Communities v. Kingdom of Belgium, [1988] ECR 305. The Commission had not given sufficient time to the Belgian government to react before bringing the action in front of the Court of Justice. It is worth noting that the Commission (DG Lenarduzzi) recognized that “the case-law of the Court of Justice had a crucial role in European cooperation in the field of education.” The Gravier ruling adopted by the Court of Justice of the European Communities in 1985 was another crucial event in cooperation in the field of education. This allowed higher education to be included in the scope of the treaty and as a result the Commission was able to propose the adoption of ambitious programs such as Comett, Erasmus, Lingua, PETRA, FORCE and

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fundamental actor in the litigation and also made full use of the outcomes of the judicial proceedings to legitimize its further competence to act. The Member States, on the other hand, articulated their resistance to the expansion of Community competence around two main arguments. First, they opposed the broad interpretation of the old version of article 166 TFEU as a matter of principle. Notwithstanding its language referring to the Commission to “lay down general principles for implementing a common vocational training policy”, article 166 TFEU was first implemented by a series of acts aiming at reinforcing intergovernmental cooperation rather than establishing a policy. In the pre-Gravier phase, Member States’ participation in litigation was irregular and determined by the applicant’s nationality. Generally, with the exception of Belgium, Member States complied with the case law and even supported it (e.g. Italy in the Casagrande case).31 It was from the Gravier case onwards that a group of Member States, particularly Belgium, Denmark, France, Germany, the Netherlands and the United Kingdom, started to systematically express their opposition to include higher education under the definition of vocational training. In Blaizot, Belgium argued that the term “vocational training” refers not to university education, which is essentially academic in nature, but to apprenticeship or technical training.32 Universities across Europe expressed the same opinion on several occasion. Moreover, Member States endeavoured to maintain their full sovereignty over the education system by stressing the diversity of national education traditions and the need to preserve them. The second argument made by the Member States focused on the financing of higher education. The reason why Belgium faced a net influx of foreigner students was due to the fact that it did not apply measures such as enrolment quotas, high entrance fees or selective admission procedures that other neighbouring Member States did. Belgium claimed that this trend was putting its higher education under strain, and that providing equal access to nationals of other Member States had a serious impact on the viability of its education system. Therefore, the only available solution was to have foreign students pay for tuition in the receiving country, where they were not charged as taxpayers. The United Kingdom and Denmark also defended the state competence to treat its own nationals more favourably, particularly in regard

31

‘Youth for Europe’, which we all know to have been highly successful within education and among the public in general”; see The history of European cooperation in education and training”, p. 38. 32 See note 10 to this chapter. Case C-24/86, para.13.

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to access, scholarships and grants, and other social facilities provided for students. Member States expressed their opposition intervening in pending cases before the Court or attacking the legal basis of EU action. The Commission, however, underlined on several occasions that the real impact of EU students was in practice quite limited due to the low numbers of students moving on a long-term basis.33

1985 to 1995 – after gravier : codification of education and vocational training competences and further evolution of individual rights The switch in the Commission’s strategy towards a more active role as initiator of policy-making became clear from the day following the Gravier ruling. Starting from the premise that a policy was established on the basis of the EU vocational training competence, the Commission launched the legislative process for two action programs, respectively on higher education (Erasmus) and vocational training (Comett),34 and, later on, as part of its positive integration, strategy, a directive on the right of residence for students35 (see the following section). When Member States opposed these initiatives, the Commission moved to inter-institutional litigation with the clear objective of giving the Court the possibility of consolidating its case law and legitimizing the policy-making competence. The broad legal and political discussions surrounding the adoption of the action programs, which also intertwined with the rendering of the Blaizot ruling, had a strong impact not only on the codification of the relative EU competence in the Maastricht Treaty (current articles 165 and 166) (see discussion later in the chapter) but also on the second generation of EU education (Socrates) and vocational training (Leonardo da Vinci) programs (see discussion that follows). All these developments are characterized by a dynamic between the Commission and the Member States where the latter were often trying to contain

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It noted this also as regards the Netherlands in Case C-357/89, V. J. M. Raulin v. Minister van Onderwijs en Wetenschappen, [1992] ECR I-1027. Respectively, Decision n. 87/327, OJ L166 of 25/6/87 and Decision n. 86/365, OJ L222 of 8/8/86. Directive 96/93/EEC of the Council of 29 October 1993 on the right of residence for students, as repealed by Directive 2004/38/EC of the European Parliament and of Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territories of the Member States, OJ L 158/2004. The 1990 Directive was part of a package which included two others dealing respectively with the right of residence of retired people and not economically active people.

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what was perceived as an excessive expansion of the EU competence in a field reserved to national sovereignty.

Implementing Gravier: The First Generation of Education and Vocational Training Programs The recognition by the Court that higher education was vocational training was immediately put to fruition by the Commission with the proposal of launching the Erasmus and Comett programs with article 128 of the Rome Treaty (currently amended as article 166TFEU) as the only legal basis. The new legal basis allowed the EU to take a new kind of action in the fields of education going beyond classical intergovernmental cooperation as it was the case until then.36 Erasmus aimed at establishing a Community action scheme to improve university students’ mobility and increasing cooperation among universities across Europe. Comett was meant to strengthen and stimulate intra-Community cooperation between universities and enterprises regarding vocational training. What was innovative in the programs was that while they were still oriented towards cooperation activities, such as transnational exchanges and establishing networks, they imposed upon Member States an obligation to cooperate. Moreover, Erasmus targeted universities notwithstanding the pending Blaizot decision. Because they addressed universities and envisaged a range of cooperation activities, the two programs were meant to have a substantial impact on the organization of the national education system. This is why Member States reacted by imposing article 352 TFEU (implied powers) as additional legal basis in both proposals.37 By choosing to base its proposals only on article 166 TFEU, the Commission made adoption of the programs more probable than if it had added article 352 TFEU from the beginning. If it had proposed a program based on both provisions at the outset, the Member States could have rejected the entire proposal by arguing that it was not in the aims of the Treaty to adopt an action program on education (Gravier notwithstanding). Indeed, the addition of the implied powers provision by the Member States sent a twofold message: first, they did not recognize the Community to have a

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See also EC, The history of European cooperation in education and training, note 6, which describes in details the first steps of European cooperation on education between the European institutions, Member States and academia since the 1970s. See also EC, The history of European cooperation in education and training, note 6, pp. 112–20 for a description of the legal bases discussion from a more political perspective.

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competence as such on education; second, by imposing unanimity, they wished to contain any further unchecked development of this competence. The inter-institutional litigation that ensued from the change in the legal basis showed once again the Commission’s mastery of having recourse to judicial proceedings to legitimize its own competence, as well as Member States’ disagreement with such an evolution. Although article 352 was added to both decisions, the Commission opted to seek the annulment of the Erasmus (higher education) decision only,38 since the sanction of article 166 TFEU as the legitimate legal basis for a program dealing with education would have automatically applied to the program on vocational training.39 The Member States intervening together as Council, and some of them also individually, i.e. France, Germany and the United Kingdom, argued that article 166 TFEU as interpreted by the Court did not suffice to adopt a program like Erasmus encompassing cooperation activities for all university education, which could only be partially considered vocational training. When ruling on the Erasmus case, the Court had meanwhile decided Blaizot, thereby rendering void the Member States’ classical argument that the notion of vocational training of article 166 TFEU did not extend to include university education. In the view of the Court, higher education was considered vocational training with some exception, such as for very general education courses. However, since these courses were exception, they did not prevent a program like Erasmus from being adopted pursuant to article 166. Nonetheless, the Court concluded that article 352 was necessary because the program also covered research activities. The “research” point did not stand the test of time, however, and it was dismissed by the Court in the Comett II decision,40 notwithstanding the Member States claim that article 352 TFEU was again necessary because of the research component of the program. Moreover, the latter provision was not added as legal basis to the Erasmus II decision. Hence, it appears that the Court made reference to it in the Erasmus decision in order to make the extensive interpretation and recognition of the EU competence in the field more palatable to Member States. Member States realized that the Erasmus case, building upon Gravier, also represented a turning point in the recognition of the existence of a 38

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Case C-242/87, Commission of the European Communities v. Council of the European Communities, [1989] ECR 1425 (Erasmus). See K. Lenearts, Education in the European Community law after Maastricht, in (1994)31 CMLRev. 7. Joined cases C-51/89, C-90/89, and C-94/89, United Kingdom of Great Britain and others v. Council of the European Communities, [1991] ECR 2757.

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Community competence in a field they considered to pertain to national competence. By the game of inter-institutional litigation, and the coherence and self-developing nature of the Court’s legal reasoning, they were generally defeated in Court. As a consequence, they started to protect their competence more consistently by bringing the decision-making process back to the political arena and, when the occasion arose, amending the treaties they sought to consolidate and contain the development of higher education competence. The occasion came with the opening of the 1991 Intergovernmental Conference, which led to the adoption of the Maastricht Treaty.

Codifying the New Competencies: the Maastricht Treaty The progressive evolution of EU education and vocational training competencies represents a perfect example not only of functional integration, but also of judicial policy-making. Gravier and its follow-up jurisprudence prepared the ground for a Commission–Member States “animated negotiation” at the hour of the treaties revision. If initially the Commission aimed for the institutionalization of the judicial status quo, the debate ended up being more convoluted, since Member States perceived the treaty revision during the Maastricht intergovernmental conference as an opportunity to reframe EU competence. After years of judicial activism transposed into policy by the Commission, which was tolerated rather than accepted, Member States aimed rather at setting clear boundaries to EU competence and asserting their own vision of a European dimension of education. In a nutshell,41 the Commission approached the treaty revision taking the case law as the starting point and striving to amend article 166 TFEU in order to have a clear-cut vocational training competence that included higher education activities. On the basis of such competence, the Commission envisaged implementing a full-fledged policy geared towards the completion of the internal market, which nonetheless respected the diversity of national vocational training systems. Article 165 on education, instead, was meant to provide limited competence to the EU in complementing Member States’ 41

A twofold debate developed roughly over the period 1989–1993: the substantial debate framed by the Commission through the launch of policy documents looking for Member States and other stakeholders’ reaction (EC, Memorandum on Higher Education in the European Community (COM(91)349) and EC, Vocational Training in the European Community in the 1990s (COM(91)397), and the legal debate proper over the drafting of the treaty legal provisions in the Intergovernmental Conference (1991). The different positions are drawn by the above documents and the acts of the IGC.

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efforts to improve the quality of their education through transnational cooperation rather than legislation. Such a low-key approach for education was reflected in the scope of that article, as envisaged by the Commission, which covered only general education throughout compulsory schooling while excluding higher education.42 Member States, in particular Denmark, France, Germany, the Netherlands and the United Kingdom, intended to set clear boundaries upon Community competencies and bring higher education under the cover of a new article dealing with education only to provide a sound basis for Community action, if necessary even by “reframing” the previous Court’s decisions. Member States’ positions were more nuanced about the kind of activities the Community could carry out under such competence. While the general approach was in favour of a limited competence, some were open towards a Community policy (Greece) or at least a common framework of principles and guidelines (Belgium, France, Ireland, Italy and Portugal), while others (Germany) considered the Community task to be only that of organizing specific programs. How education and vocational training were finally codified, respectively, in current articles 165 TFEU on education and 166 TFEU on vocational training43 was far from the initial intent. But it was nonetheless a symbolic achievement after all the years of “judicial” policy-making.44 In transposing the acquis communautaire, coupled with the vigorous assertion of the Member States’ vision of what an EU policy in the field of education and training consisted of, the codification led to at least three different consequences. First, the institutionalization provided the EU with a clear-cut legal basis to implement education and vocational training policies whose scope consolidates what has been done so far and to a certain extent enlarges it in terms of fields covered. For example, under article 165 the EU continues its activities of mobility, cooperation and exchange of information, but they now cover all levels of education and not only higher education. A second consequence of

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EC Com(89)236, ‘Education and Training: guidelines for the medium-term 1989–1992’. Article 165 and 166 TFEU are reproduced at the end of the chapter. See H.C. Jones, “The new Articles 126 and 127, once they are ratified, will provide a clear basis for the future. The wording of these articles and the terms of reference set out in them are no accident, as they are in the logic of everything that has been developed at Community level since 1976. They represent the natural culmination of that period of work and the achievements to date. And they represent, too, an expression of the mutual confidence and trust of the Member States’ authorities and their goodwill to further develop education cooperation”, in Education in a Changing Europe, Educational Review, vol. 44, No 3, 1992. See also The History of European Cooperation in Education and Training, note 6, pp. 143ff.

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the codification was that higher education, by virtue of the case law, was still covered by both the provision on education (article 166) and that on vocational training (166). Hence, codification did not solve the question of the definition of higher education as vocational training, notwithstanding Member States’ expectation to the contrary. This brought along the third consequence, which is the levelling between the two competences. The codification somehow represents a deadlock since the acquis has been transposed into provisions that only allow for cooperation and make it unlikely the adoption of any kind of new measures45. Articles 165 and 166 bestow on the EU two similar competencies on education and training but define them as complementary to those of the Member States, who remain fully responsible for the content and organization of their national system. This means that the EU is entrusted with the task of promoting and supporting the cooperation of the Member States, who considers the EU’s role to be mainly one of a promotional and financing authority.46 Moreover, if to a certain extent the material scope of the EU action is extended (e.g. all education levels are now covered), the competencies per se cannot develop any further, since any reference to the dynamic element of market integration has disappeared. Hence, although the overlapping in the definitions of higher education and vocational training had not been solved, its dynamic was somehow neutralized by levelling the two competencies and disconnecting from economic integration. From this perspective, the Member States achieved their goal in redefining the contours of EU action, since, even if article 166 mentions the implementation of a vocational training policy, the explicit limits contained it its wording prevents this from being a full-fledged policy. This tight legal framework was the direct consequence of the spillover evolution of an education competence from economic integration and the far-reaching interpretation of vocational training by the ECJ which the Member States wanted to stop developing any further.47

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In Jones’s words: ‘The terms of the two Articles 126 and 127 make it quite clear that any idea of harmonization of the education and training systems as such is a dead duck; the explicit terms of these two articles gives that notion a definitive deathblow’, in Education in a changing Europe, note 45, EU countries expressed this position in their reactions to the memoranda mentioned earlier. The scope of this chapter prevents an extensive analysis of the nature of the new competences; cf. Gisella Gori, Towards an EU Right to Education. The Hague: Kluwer Law International, 2001, 77.

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Testing the Newly Codified Competences: The Socrates and Leonardo da Vinci programs Owing to the fact that all education and vocational training programs were to expire at the same time the new Treaty on the European Union was entering into force in 2001, the Commission seized the occasion to launch two new education and vocational training programs aiming to rationalize and reorganize the EU action. These programs – Socrates on education48 and Leonardo da Vinci on vocational training49 – were meant to implement the new provisions, that is articles 165 and 166 TFEU. While Leonardo, which also covers university cooperation with enterprises with a view to enhancing training and life-long education, was easily adopted,50 the debate around the legal basis of the Socrates program mirrored that on the consolidation of competences in the Maastricht Treaty.51 While Member States pushed for its adoption on the sole basis of article 165 TFEU, thereby trying to “reframe” the existing case law at the light of the new treaty provisions, the Commission played the role of the guarantor of the acquis communautaire. This Commission vs. Member States dynamic was further complicated by a second debate internal to the Commission. The Commission’s Task Force on Human Resources, Education, Training and Youth originally proposed to base the Socrates program only on article 165 TFEU, considering it provided enough competence for such an action program which aimed to continue student mobility and university transnational cooperation. The Legal Service of the Commission, instead, took a more conservative standing, arguing that the respect of the case law implied to base the program only on article 166 TFEU. Such an attitude was probably due to the purpose of maintaining the coherence of the evolution of EU legal order, even though according to the Task Force it underestimated the lengthy and substantial discussion surrounding, since the beginning, the choice of a legal basis of EU action on education. Once again the Task Force was nonetheless able to steer the legal process to reach its policy goals. In particular, the Task Force was able to shift the Legal

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Decision n. 819/95/EC of the European parliament and the Council of 14/3/0995 establishing the Community action program Socrates, OJ L87/10 of 20/4/1995. Socrates grouped the following expired programs: Erasmus and Lingua. Council Decision of 6/12/1994 establishing an action program for the implementation of a European Community vocational training policy, OJ L340/8 of 29/12/1994 Leonardo grouped the following expired programs: Comett, Eurotechnet, Petra and partially Lingua. The Leonardo program adopted on the sole legal basis of article 165 was not contested. See also The History of European Cooperation in Education and Training, note 6, pp. 181ff.

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Service position adducing, inter alia, arguments relating to the position of the Member States, which it had itself opposed for a long time. In particular, the Task Force noted that Member States considered education to fall under article 165 TFEU, and that they supported the introduction of such an article primarily to provide the EU with the competence of adopting programs as Socrates. It also underscored that the intent of the legislator when drafting article 165 was to include higher education and student mobility, issues covered by the Socrates program. It thus followed, in the views of the Task Force, that both articles 165 and 166 contained the acquis communautaire and that the higher education’s objectives of article 165 were not new. As a consequence, the Task Force proposed as a compromise to use both provisions as legal basis and the Legal Service rallied. Member States instead were not in favour of a double legal basis. In line with their previous position and the rationale behind the Maastricht negotiations, those Member States who were generally active in litigating before the Court (Belgium, Denmark, Germany, the Netherlands and United Kingdom), claimed that article 165 was the only appropriate basis. Belgium and the Netherlands were concerned by the fact that article 165 provided only for cooperation, while article 166 also for implementing a policy. The United Kingdom and Germany were instead concerned with the content of the program. The United Kingdom considered all activities to be carried out under Socrates as educational, while Germany wished to make clear that higher education was covered only by article 165. These different approaches demonstrated that Member States considered the ambiguous relation between higher education and vocational training solved once for all by the Treaty and that the distinction between the two competences was now clear-cut. Nonetheless, Member States finally rallied to the double legal basis proposal, in exchange of an additional recital clarifying its meaning,52 establishing the nature of the committee dealing with the program53 and reducing the program’s budget. The reduction of the budget was in particular supported by the group of Member States regularly opposing EU action fearing a financial

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The additional clause reads: “whereas a part of the measures provided for in this Decision concern vocational training and therefore go beyond general education (including higher education) as covered by Article 126 (today 165TFEU); whereas reference should also therefore be made to Article 127 (today 166TFEU) of the Treaty for the said measures, without thereby implying that the Socrates program can be considered as one of the measures for implementing vocational training policy within the meaning of Article 127.” It was opted for a mixed committee that is an advisory and management committee at the same time.

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burden determined by the increasing presence of foreign students and the necessary systemic adjustments in their universities. 1999 to 2012 – The Legacy of Gravier: Additional Individual Educational Rights under the Notion of European Citizenship Although Member States had succeeded reframing articles 165 and 166 TFEU with a view to contain the impact of the acquis on the development of EU education and vocational training policy, and although the right of access to education was no longer an issue for EU cooperation programs, the codification of the EU competencies did not prevent educational and training rights to continue evolving under the track of negative integration. In fact, the subsequent ECJ jurisprudence continued to refine and frame educational and vocational training rights of individuals through the expanding concept of EU citizenship and the evergreen principle of non-discrimination on the basis of nationality.54 The notion of EU citizenship (article 21 TFEU) and its interpretation by the Court as “the fundamental status of nationals of the Member States enabling them to enjoy the same treatment in law irrespective of their nationality”55 provided a new impetus for the development of educational rights in the EU context. The European Union Charter of Fundamental Rights, finally, “consecrated” the recognition of a right to education in Article 14.56 In a series of cases dealing with students’ equal access to higher education and equal treatment regarding social benefits and maintenance grants, the Court used the notion of citizenship to extend the material scope of educational rights of students. Once again, this happened through the combined application of EU citizenship and article 18 TFEU (direct and indirect discrimination on the ground of nationality). When dealing with restrictions to 54

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See also Gisella Gori, “Article 14.” In Commentary to the EU Charter of Fundamental Rights, edited by Steve Peers, Tamara Hervey, Jeff Kenner and Angela Wood. Bloomsbury Publishing, 2014. Case C-147/03 Commission of the European Communities v. Republic of Austria [2005] ECR I-5969 and Case C-73/08 Nicolas Bressol and others v. Gouvernement de la Communauté française [2012] ECR I-2735. The former dealt with additional qualifications requirements imposed by Austria to upon non-nationals seeking access to a specific higher or university course, which the Court of Justice did not find justified. In Bressol, Belgian legislation restricted the number of non-resident students who may enroll for the first time in medical and paramedical courses. Being a preliminary ruling, the Court concluded that it was for the competent national authorities to assess in depth if the legislation was justified in light of the objective of protection of public health. An analysis on the scope of this right in the EU legal order goes beyond the scope of this chapter. See G. Gori, Article 14, in The EU Charter of Fundamental Rights: A Commentary, ed. by S. Peers, T. Hervey, J. Kenner, and A. Ward, Hart Publishing, 2014, p. 401.

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access to higher education, such as additional requirements imposed to holders of foreign diplomas or enrolment quotas applying to non-resident students, the Court held that the opportunity for students coming from other Member States to gain access to higher education “constitutes the very essence of the principle of free movement of students guaranteed by the Treaty.”57 In the Bidar case dealing with students’ equal treatment regarding maintenance grants,58 the Court of Justice affirmed that students could not be discriminated against on ground of nationality if these advantages fell under the material scope of the Treaty.59 However, the Court added that maintenance loans or grants could only be provided to students showing a certain degree of integration in the society of the host Member State60. In Bidar, it decided that three-year-long lawful residence coupled with the fact that the applicant had received a substantial part of his secondary education in that same state were sufficient to provide him with the right to equal treatment as regards maintenance grants. In Förster,61 the Court affirmed that the five-year requirement imposed by Directive 2004/38 on free movement was legitimate to ensure that the student has attained a certain level of integration in the Member State in question62. In so doing the Court seemed to give priority to secondary legislation (the Residence Directive) over Treaty provisions.63 In a following case relating to Austria, however,64 the Court reaffirmed the pre-eminence of the Treaty on

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Id. Case C-209/03 The Queen, on the application of Dany Bidar v. London Borough of Ealing and Secretary of State for Education and Skills, [2005] ECR I-2119 concerning a French citizen who applied for a maintenance grant in the UK. See also Case C-184/99 Rudy Grzelcczyk v. Centre public d’aide sociale d’Ottignires-Louvain-la-Neuve [2001] ECR I-6193 concerning a French national who had worked part-time in Belgium during the first three years of his university studies. After a maintenance grant was withdrawn from him because of his nationality, he applied for the minimex, which is a non-contributory social benefit. 60 Case C-209/03 para. 32 and 33. Case C-209/03 para. 59. Case C-158/07, Förster v Hoofdirectie van der Informatie Beheer Groep, ECR [2008] I-08507. The Förster case concerned a German national settled in the Netherlands. While pending the transposition of the Directive at issue, the Dutch government issued a policy rule imposing a five-year residence requirement in order for students to become entitled to maintenance grants. The Court also drew a difference with the Bidar ruling by making reference to the fact that the UK legislation imposed not only a residence requirement but also the status of “settled person”. However, this legislation also precluded the possibility of students acquiring such status while studying, and this independently from their degree of integration in the society. Case C-158/07 para. 58. See S. O’Leary, Equal Treatment and EU Citizens: A New Chapter on Cross-Border Educational Mobility and Access to Student Financial Assistance, (2009) 34 E.L. Rev. 612. Case C-75/11, Commission of the European Communities v. The Republic of Austria, judgment of 4/10/2012. The case concerned Austrian reduced transport fares for students which

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secondary legislation, and held that enrolment in a public or private establishment for the principal purpose of following a course of study, including vocational training, was sufficient proof of a genuine link of integration of the student in the host Member State65. The Court concluded that reduced transport fares granted to students represents aid to maintenance, but the five years requirement did not apply since it was not a question of ‘student grants or student loans.’ Interestingly enough, one may safely conclude that the old negative integration dynamic still works: educational rights of the EU citizens continue to develop through the Court’s jurisprudence related to their right to free movement and residence, coupled with the principle of equal treatment. Member States, on the other hand, kept litigating the ECJ jurisprudence extending their obligations to treat all incoming EU students equally.

conclusion This chapter shows how a single judgment, Gravier, with its definition of higher education as vocational training, has reverberated for years in the judicial and policy-making arenas. The Commission, in particular the Task Force on Education, Training and Youth, made full use of the interinstitutional legal and political dynamics of European integration to achieve the aims of ensuring equality of treatment for students moving around the EU and launching far-reaching mobility programs. The Commission played a double role, first as an audacious litigant and then as a policy-maker. Through an innovative case law, the first phase of negative integration led by the Court resulted in the progressive affirmation of individual educational rights. The second, post-Gravier phase of positive integration sees the Commission assuming a more prominent role as policy initiator launching a broad and successful policy of cooperation programs. The Commission leadership in this second phase led undoubtedly to the advancement of the EU education policy, but it also brought along some forms of retaliation from the Member States at the moment of the codification of the acquis in the treaties. Eventual diverging positions within the Commission played in favor of the development of EU competence thanks to the ability of the Task Force for Education and Vocational Training.

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in principle are granted only to students whose parents are in receipts of family allowances. See also Joined cases C-22/08 and 23/08, Athanasios Vatsouras and Josif Koupatantze v. Arbeitsgemeinschaft (ARGE) Nürnberg [2009] ECR I-4585 at 44. Case C-75/11 para. 64.

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These legal and policy developments have had a real impact on students all across Europe, as well as unanticipated consequences on national education policies. On the one hand, to put them in numbers, student mobility in the framework of EU programs has grown from 3,000 in 1987–88 to 270,000 students in 2012–13 for a total of about 3 million students since the launching of the first Erasmus program. Notwithstanding the fact that Member States litigated their legal basis, they were nonetheless more in favour of the shortterm mobility exercised in the framework of the EU program than the spontaneous student mobility across countries.66 This is due to the fact that the cost of mobility in such programs is limited for Member States and supported by the EU budget. On the other hand, the fact that Member States continued to litigate, and often lost, cases where the main theme was extending equal treatment of students moving spontaneously across countries for study purposes only demonstrate their wish to continue having as much control as possible. Although numbers remain lower for long-term mobility,67 by following a legal rationale dictated by the common market the Court imposed progressive financial burdens onto the Member States, which determined policy changes at national level for the financing of education. The obligation to treat equally and impose the same registration fees to EU citizens, when for nationals’ access to education is supported by taxpayers, means additional education costs for countries which, as the United Kingdom and Belgium, are net importer of students. The flow of foreign students into these Member States has also been one of the reasons at the origin of important changes in the organization of financial support to students in the United Kingdom, in particular the extensive substitution of grants by loans. Beyond the will to maintain the singularity of their education system, much of the Member States’ objections were also due to more practical reasons, which sometimes

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Short-term mobility within EU programs is organized as far as access, financial support and recognition of the time spent abroad is concerned. Spontaneous mobility is not framed and imposes to Member States higher costs deriving from the obligation of equal treatment of students who are EU citizens. There are not comparable data available, but roughly, in 1995, long-term student mobility was estimated to apply to about 35,000 students (EC, Key data on education, 1998). In 2006 about 45,000 or 2.5% out of 19 million students who are EU nationals of a given country, studied in another country in Europe (Eurostat, The Bologna Process in Higher Education in EuropeKey indicators on the social dimension and mobility, 2009, http://ec.europa.eu/eurostat/ documents/3217494/5713011/KS-78-09-653-EN.PDF/3eb9f4ec-dc39-4e51-a18b-b61eb7c2518b and EC, Key data on education, 2009). However, these data are not disaggregated according to the length of the mobility period.

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have been “shadowed” by the EU goal of promoting student mobility as part and parcel of European integration. Treaty on the Functioning of the European Union Article 165 (ex Article 149 TEC) 1. The Union shall contribute to the development of quality education by encouraging cooperation between Member States and, if necessary, by supporting and supplementing their action, while fully respecting the responsibility of the Member States for the content of teaching and the organisation of education systems and their cultural and linguistic diversity. The Union shall contribute to the promotion of European sporting issues, while taking account of the specific nature of sport, its structures based on voluntary activity and its social and educational function. 2. Union action shall be aimed at: - developing the European dimension in education, particularly through the teaching and dissemination of the languages of the Member States, - encouraging mobility of students and teachers, by encouraging inter alia, the academic recognition of diplomas and periods of study, - promoting cooperation between educational establishments, - developing exchanges of information and experience on issues common to the education systems of the Member States, - encouraging the development of youth exchanges and of exchanges of socio-educational instructors, and encouraging the participation of young people in democratic life in Europe, - encouraging the development of distance education, - developing the European dimension in sport, by promoting fairness and openness in sporting competitions and cooperation between bodies responsible for sports, and by protecting the physical and moral integrity of sportsmen and sportswomen, especially the youngest sportsmen and sportswomen. 3. The Union and the Member States shall foster cooperation with third countries and the competent international organisations in the field of education and sport, in particular the Council of Europe. 4. In order to contribute to the achievement of the objectives referred to in this Article: - the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, after consulting the Economic and

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Social Committee and the Committee of the Regions, shall adopt incentive measures, excluding any harmonisation of the laws and regulations of the Member States, - the Council, on a proposal from the Commission, shall adopt recommendations. Article 166 (ex Article 150 TEC) 1. The Union shall implement a vocational training policy which shall support and supplement the action of the Member States, while fully respecting the responsibility of the Member States for the content and organisation of vocational training. 2. Union action shall aim to: - facilitate adaptation to industrial changes, in particular through vocational training and retraining, - improve initial and continuing vocational training in order to facilitate vocational integration and reintegration into the labour market, - facilitate access to vocational training and encourage mobility of instructors and trainees and particularly young people, - stimulate cooperation on training between educational or training establishments and firms, - develop exchanges of information and experience on issues common to the training systems of the Member States. 3. The Union and the Member States shall foster cooperation with third countries and the competent international organisations in the sphere of vocational training. 4. The European Parliament and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee and the Committee of the Regions, shall adopt measures to contribute to the achievement of the objectives referred to in this Article, excluding any harmonisation of the laws and regulations of the Member States, and the Council, on a proposal from the Commission, shall adopt recommendations.

disclaimer At the time of the writing the author was Senior Political Adviser at the European Union Delegation to the United States. The opinions expressed in this chapter are those of the author and do not necessarily reflect those of the institution mentioned above.

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24 The Early Retirement Age of the Hungarian Judges ga´ bor halmai

introduction The retirement age for Hungarian judges was reduced from seventy years to sixtytwo years, starting on the day the new constitution, entitled the Fundamental Law of Hungary entered into force on 1 January 2012.1 This change forced around 274 judges into early retirement. Those judges included six of the twenty court presidents at the county level, four of the five appeals court presidents, and twenty of the seventy-four Supreme Court judges. First, in mid-2012, the Hungarian Constitutional Court declared the unconstitutionality of this regulation.2 Also, the Opinion of the Venice Commission of the Council of Europe of 15 October 2012 called upon the Hungarian legislators to adopt provisions reinstating the dismissed judges in their previous positions without requiring them to go through a re-appointment procedure. In November, the European Court of Justice (ECJ) in Commission v. Hungary established the violation of EU law.3 But unfortunately, none of these decisions were really able to reinstate the fired judges into their original position and stop the Hungarian government from seriously undermining further the independence of the judiciary and weakening other checks and balances with its constitutional reform.4 In addition, on 1 January 2012, the Fundamental Law terminated the term of office of András Baka, President of the Supreme Court, three and a half

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For the ‘official’ English translation of the Fundamental Law, see www.parlament.hu/ documents/125505/138409/Fundamental+law/73811993-c377-428d-9808-ee03d6fb8178 Decision 33/2012 (VII.17). ECJ, 6 November 2012, Case C—286/12. See a more detailed analysis on the lack of checks and balances in M. Bánkuti, G. Halmai and K. L. Scheppele, “From Separation of Powers to a Government without Checks: Hungary’s Old and New Constitutions” in G. A. Tóth (Ed.), Constitution for a Disunited Nation: On Hungary’s 2011 Fundamental Law, CEU Press, Budapest, 2012.

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years before its normal date of expiry. Mr. Baka turned to the European Court of Human Rights (ECtHR) complaining that he was dismissed in connection with his views and public position expressed in his capacity as President of the Supreme Court on issues of fundamental importance for the judiciary. On 23 June 2016 the Grand Chamber of the ECtHR, similarly to the prior second chamber judgment of 27 May 2014, stated that Hungary had infringed upon Mr. Baka’s rights, because his removal may have been related to his criticism of the transformation of the organization of the courts.5 Although the judgment indicates the violation of judicial independence by the State of Hungary, due to the nature of the individual complaint procedure of the ECtHR, it could not explicitly rule on this. Equally, while the ECtHR could provide some financial compensation to Mr. Baka, it was not able to reinstate him to his former position. So, due to the nature of the referrals to these three courts, only the Hungarian Constitutional Court was able to reinstate the judges, and both the Hungarian Court and the ECJ was in the position to reinforce national judicial independence, while the ECtHR could not possibly achieve either of these goals, only to provide some remedy for the applicant Chief Justice. Both the forced early retirement of the judges, especially those in leading position at various courts, and the early dismissal of the President of the Supreme Court were aimed at limiting the independence of the judiciary and bypassing one of the most important checks and balances of the executive power. This was set against the background of the rise of the populist Fidesz Party and its victory in the April 2010 elections, which gave the party and the new prime minister, Viktor Orbán, the necessary two-thirds parliamentary majority to effect constitutional change. Therefore, it is important to investigate what a national review powers, such as the Constitutional Court, and the judicial institutions of both the European Union and the Council of Europe can do to force one of their Member States to comply with the common European principles and values.

the independence of the judiciary after the fundamental law Beyond the new retirement age of the judges, the general independence of the judiciary has been essentially changed since the Fundamental Law took effect in 2012. However, the original text of the Fundamental Law of 2011 did not 5

Baka v. Hungary, Judgment of 23 June 2016. Application no. 20261/12.

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provide sufficient guarantee of judicial autonomy. The passages of the Fundamental Law pertaining to the administration of justice were missing a number of important guarantees and symbolic elements. These deficiencies permitted changes to public law that could threaten the autonomy of the courts. Unlike the previously effective constitution, the Fundamental Law made no mention of the judicial levels and did not name the elements of the judicial system. It did not deal with the administration of the courts: even prior to 1997 the wording of paragraph (5) of Section 25, which mentions the participation of organs of judicial self-government in court administration, proved to be an insufficient guarantee in the face of excessively broad interpretations of government powers.6 The Fundamental Law, therefore, does not prevent the creation of an administration model in which there are no counterbalances to central governmental powers. The classic constitutional principle of equality under the law is also missing from among the guiding principles pertaining to the operation of the judicial system. A declaration that the courts are the protectors of constitutional order, and of rights and lawful interests, is absent from the Chapter on the courts. The wording that “[The] Courts shall administer justice” does not guarantee the courts’ monopoly on administering justice. Thus, a classic element of the division of powers is also missing. Section 28 of the Fundamental Law addresses the judicial interpretation of law, with a text that defies interpretation. The statement that judges should interpret legal norms not only in accordance with the Fundamental Law but also based on the assumption that they serve common sense, the public good and a moral and economic purpose is obscure and therefore gives rise to legal uncertainty. Concerns relating to the interpretation of legislation are also raised by the section of the Fundamental Law that permits the restriction of fundamental rights on the basis of constitutional values, the substance of which is obscure: “A fundamental right may be restricted to allow the exercise of another fundamental right or to defend any constitutional value to the extent absolutely necessary, in proportion to the desired goal and in respect of the essential content of such fundamental right.”7 The constitutional reforms of 2011–13 have also seriously undermined the independence of the ordinary judiciary through changing the appointment

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Fleck Zoltán, Gadó Gábor, Halmai Gábor, Hegyi Szabolcs, Juhász Gábor, Kis János, Körtvélyesi Zsolt, Majtényi Balázs, Tóth Gábor Attila, ‘Vélemény Magyarország Alaptörvényéről. Amicus Brief a Velencei Bizottságnak’ [Opinion on Hungary’s Fundamental Law. Amicus Brief for the Venice Commission], Fundamentum, 2011/1, 61–77, at 72. Article I (3) of the Fundamental Law.

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and reassignment process for judges. According to the cardinal acts, the head of the National Judicial Office can select either any judge from among the top three candidates recommended by the judicial council of the court where the appointment would be made, or alternatively could decide not to choose any of them. If s/he decides against the top candidate, or against any of the candidates listed, s/he only has to report the reasons to the National Judicial Council, a new body that has a merely advisory role in this matter. While formally the President of the Republic must sign off on all new judicial appointments, the decision of the head of the National Judicial Office alone is necessary in order to promote or demote a judge presently sitting anywhere in the judiciary. The new law contains no procedures through which a sitting judge can contest such a reassignment. On January 17, the European Commission started accelerated infringement proceedings against Hungary over three issues jointly regulated by the Constitution and the new Cardinal Acts on the Structure of the Judiciary and the Legal Status of Judges8: the sudden and mandatory lowering of the retirement age of the judges was one of them. On 16 February, the European Parliament called on the European Commission to request the opinion of the Venice Commission on the legislative package consisting of the new constitution, the Transitional Provisions, and the cardinal acts as a whole, including the one on the judiciary.9 The Venice Commission noted in its initial review of the Fundamental Law that the independence of the judiciary was insufficiently protected in the constitution itself.10 At that time the Venice Commission recommended that a clearer statement of the independence of the judiciary be included in the cardinal acts on the judiciary, though it also noted that explicit commitments to the separation of powers and the right to a fair trial helped in assuring that the constitution intended to protect the judiciary as an institution. On 1 April 2013, the Fourth Amendment to the Fundamental Law took effect, rebuffing requests by the European Union; the Council of Europe urged the government to seek the opinion of the Venice Commission before bringing the amendment into force. The Fourth Amendment entrenches in the constitution itself powers of the President of the National Judicial Office (NJO) that the Venice Commission has previously criticized as excessive. In 8

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Act CLXI of 2011 on the Organization and Administration of the Judiciary and Act CLXII of 2011 on the Legal Status and Remuneration of Judges. European Parliament resolution of 16 February 2012 on the recent political developments in Hungary (2012/2511(RSP). Opinion on the Fundamental Law of Hungary, Adopted by the Venice Commission at its 87th Plenary Session, 17–18 June 2011, Opinion no. 621/2011, Strasbourg, 20 June 2011, para. 102.

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Article 13(1) of the Fourth Amendment, the president of the NJO is given the power to perform the central responsibilities of administration while the judicial self-governing organizations merely participate in this task. In addition, Article 14 of the Fourth Amendment gives the president of the NJO the power to move particular cases from the courts to which they have been assigned by law to any other court of her choosing. Upon the request of the Secretary General of the Council of Europe, the Venice Commission at its plenary session on 14–15 June adopted opinion 720/ 2013 on the Fourth Amendment to the Fundamental Law of Hungary.11 The opinion comes to the conclusion that the Fourth Amendment perpetuates the problematic position of the President of the National Judicial Office endangers the constitutional system of checks and balances. Upon the request of the European Parliament, its Committee on Civil Liberties, Justice and Home Affairs (LIBE) also prepared a report on the Hungarian constitutional situation, including the impacts of the Fourth Amendment to the Fundamental Law of Hungary.12 The report is named after Rui Tavares, the Portuguese MEP who was the rapporteur on a detailed study of the Hungarian constitutional developments since 2010. On 3 July 2013, the report passed with a surprisingly lopsided vote: 370 in favour, 248 against and 82 abstentions. In a Parliament with a slight majority of the right, this tally refuted the Hungarian government’s claim that the report was merely a conspiracy of the left.13

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Opinion on the Fourth Amendment to the Fundamental Law of Hungary Adopted by the Venice Commission at its 95th Plenary Session, Venice, 14–15 June 2013, at www.venice.coe .int/WebForms/documents/?pdf=CDL-AD(2013)012-e www.europarl.europa.eu/sides/getDoc.do?type=REPORT&reference=A7-2013-0229& language=EN With about 50 of the 754 MEPs absent, the total number of ‘yes’ votes was still larger than the total number of MEPs of all of the left parties combined. In short, even if all MEPs had been present, the left alone still could not account for all of those votes. And since the 82 abstentions had the effect of allowing the report to go forward, they should be read as soft ‘yeses’ rather than undecided or negative votes. Most of the abstentions no doubt came from Fidesz’s own party in the European Parliament, the European People’s Party (EPP). Many EPP members signaled ahead of time that they could not back Orbán but also would not vote overtly against the position of their party, which officially supported him without whipping the votes. Fidesz had been counting on party discipline to save it. But then it became clear that Fidesz was terribly isolated within the EPP. The tally on the final report was not a roll-call vote, so we do not know for sure who voted for it in the end. But the roll-call votes on the proposed amendments to the bill revealed that many members of the EPP and the even-more-conservative group of European Conservatives and Reformists (ERC) voted to keep the report from being diluted at crucial junctures. Each attempt to weaken the report was rejected openly by 18–22 EPP votes and by 8–12 ERC votes. We can guess that the MEPs who rejected the hostile changes must have voted in favour of the report in the end, along with even more of their colleagues who

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The report contains the following to-do list for the Hungarian government on the independence of the judiciary: – to fully guarantee the independence of the judiciary by ensuring that the principles of irremovability and guaranteed term of office of judges, the rules governing the structure and composition of the governing bodies of the judiciary and the safeguards on the independence of the Constitutional Court are enshrined in the Fundamental Law; – to promptly and correctly implement the aforementioned decisions of the Court of Justice of the European Union of 6 November 2012 and of the Hungarian Constitutional Court, by enabling the dismissed judges who so wished to be reinstated in their previous positions, including those presiding judges whose original executive posts are no longer vacant; – to establish objective selection criteria, or to mandate the National Judicial Council to establish such criteria, with a view to ensuring that the rules on the transfer of cases respect the right to a fair trial and the principle of a lawful judge; – to implement the remaining recommendations laid down in the already cited opinions of the Venice Commission. These harsh criticisms forced the governing majority to slightly amend its initial idea concerning the administration of courts, the core of which has been the creation of a centralized one-man-led administrative organ with an exceptionally broad jurisdiction and competence lacking any substantial control or balances. Hence the Fifth Amendment to the Fundamental Law enacted in September 2013 abolished the right of the President of the NJO to appoint a court other than a court of general competence to proceed, and gave some rather formal functions in the general management of the courts to the National Council of Judges, composed by elected judges and the President of the Curia.14

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could vote anonymously at that point. See Kim Lane Scheppele, In Praise of the Tavares Report, Hungarian Spectrum, 4 July 2013. http://hungarianspectrum.wordpress.com/2013/07/ 03/kim-lane-scheppele-in-praise-of-the-tavares-report/ Three Hungarian human rights NGOs, the Hungarian Helsinki Committee, the Eötvös Károly Policy Institute and the Hungarian Civil Liberties Union call this latter part of the amendment rather cosmetic. See Comments on the Fifth Amendment to the Fundamental Law of Hungary, 18 September 2013, http://helsinki.hu/wp-content/uploads/NGO_comments_on_ the_5th_Amendment_to_the_Fundamental_Law_October2013.pdf

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the government’s action lowering the retirement age In April 2011, immediately before the final vote on the Fundamental Law of Hungary and without any consultation or impact study, the text of the Transitional Provisions of the new constitution came to include a new rule that changed, from one day to the next, the upper age limit for serving judges from seventy years to sixty-two for the general age of pension entitlement. This amendment, chiefly due to the lack of preparation, professional grounding and the speed of its introduction, clearly breached the principles pertaining to the protection of the judges’ status. In an act adopted in June 2011, the Parliament suspended all appointment procedures (including for judges who were already submitted) until 1 January 2012. This moratorium withdrew the authority of the President of the Supreme Court András Baka to appoint judicial leaders, reserving the power to appoint these judges for the new administration.

the decision of the constitutional court: violation of judicial independence More than one hundred prematurely retired judges brought their cases to the Constitutional Court, and in July 2012, the Court declared that the suddenly lowered retirement age for judges was unconstitutional and therefore retroactively null and void. The Court held that the lowering of the retirement age violated the independence of judges because it was an arbitrary change in their status. Without allowing for a longer phase-in period, so that the judges would have time to plan and adjust their lives to a new term of office, the sudden change in the retirement age constituted an interference with judicial independence. The majority opinion argued that tenure and irremovability are key elements in the independence of judges. The majority also relied upon the fact that in all EU Member States the retirement age of judges is higher than sixty-two years (except for Slovakia, where it is the same as in the new Hungarian regulation). Moreover, the change in the judicial retirement age was made not in the cardinal acts on the judiciary, but instead in an amendment to unrelated law on pensions15 that did not have the high level of constitutional entrenchment that the Constitution required with regard to the key features of judicial appointments. Finally, the retirement age, though generally forcing judges to retire at age sixty-two instead of at age seventy, was different for different categories of judges in the pension law, and there had been no adequate 15

Act No. LXXXI. of 1997 on social security retirement benefits.

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explanation for why judges should be treated differently depending on their prior expected dates of retirement. The Court added that the principle of judicial irremovability has long been entrenched in Hungarian law, pointing out that judicial protection from arbitrary dismissal had been guaranteed since the first judiciary act of 1869. In that law, the retirement age for judges had been set at seventy years and it had never been altered since. Hungary’s historic constitution, according to the Court, entrenched the retirement age at seventy. Judges elected through the governing party’s new two-thirds parliamentary majority, without the consent of any opposition party, wrote a number of dissenting opinions explaining their views. Some (Justices Balsai and DienesOehm) argued that judicial independence only guarantees independence of decision-making in the concrete case and does not guarantee a continuing judicial appointment. As a result, judges may never be removed from particular cases, but the Constitution does not protect them from being removed from their positions by a general law. Others (Justices Szívós, Lenkovics and Szalay) noted that the retirement age was lowered both in the pension law and also in a constitutional amendment, which meant to them that the Court could not review it because the Court had no power to review constitutional amendments. These justices had a point: different sources of law said different things on the retirement age. But only the constitution said that judges must retire by the “general retirement age”, and that is precisely what the Court’s majority opinion said was problematic in the new pension law, because, in fact, no retirement age was “general”. Still others (Justices Pokol and Stumpf) argued that the judges had no standing to bring the case in the first place either because they should have gone first to the labour courts (Pokol) or because they had already been fired and so their cases were moot (Stumpf). It is interesting to note that even the majority decision was dominated by internal argumentation based on Hungarian constitutional law quoting only one relevant recommendation of the Council of Europe.16 Although the judges knew that the ECJ was also dealing with the case, they avoided involving the issue of age discrimination in their review, seeking assistance in the law of the EU to interpret the amendments of the Fundamental Law in the Transitory Provisions, or seeking direct contact to the Luxembourg court through initiating a preliminary ruling procedure.17

16

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Recommendation CM/Rec(2010)12 of the Committee of Ministers to member states on judges: independence, efficiency and responsibilities. See Nóra Chronowski, “The Fundamental Law within the Network of Multi-Level European Constitutionalism”, in Zoltán Szente, Fanni Mandák and Zsuzsanna Fejes (eds.), Challenges

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Prime Minister Orbán was furious with the Court for obstructing his attempt to remake the judiciary. In a press conference the day after the Constitutional Court ruling, Orbán angrily insisted that the system would remain in place even after it had been declared unconstitutional.18 And unfortunately he had a point, namely that the Constitutional Court decided the case more than one year after the petitions of the judges have arrived, and by that time all of the judges had already been fired. Even the majority reasoning states that the decision itself cannot automatically reinstate the status of the judges, who were fired on the basis of an unconstitutional and retroactively annulled legal norm. The President of the NJO, who was entitled to ask the President of the Republic to reinstate the judges, argued that the judges should seek remedy before a labour court, but even if they were reinstated by order of the courts, the newly hired and promoted judges would not be displaced.19 The President of Hungary also announced that he had no power to withdraw his own previous decision, in which he released all the judges who reached the age of sixty-two.20

the judgment of the european court of justice: age discrimination In this situation, taking the view that the changes in the judges’ retirement scheme constituted a breach of the EU age discrimination provisions of Directive 2000/78/EC, the European Commission sent a letter of formal notice and a reasoned opinion to Hungary. Since the Hungarian government disputed the violation, the Commission referred the case to the Court of Justice and submitted a request for the accelerated procedure. The president of the Court granted the accelerated procedure.21

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and Pitfalls in the Recent Hungarian Constitutional Development. Discussing the New Fundamental Law, L’Harmattan, Paris, 2015. 231–32. “Döntöttek: Alkotmányellenes a Bírók Kényszernyugdíjazása.” Stop, 16 July 2012. Accessed 23 Februar 2015, www.stop.hu/belfold/dontottek-alkotmanyellenes-a-birokkenyszernyugdijazasa/1065707/ MTI [Hungarian Press Agency] on 16 July 2012: www.szon.hu/birak-nyugdijazasa-c-az-abdontese-nincs-kozvetlen-hatassal-a-nyugdijazasokra/2032533 “Notice the Constitutional Court IV / 2096/2012 in Relation to Resolution No. Office of the President. July 26, 2012. Accessed February 23, 2015. www.keh.hu/sajtokozlemenyek/1631Kozlemeny_az_Alkotmanybirosag_IV20962012._szamu_hatarozataval_kapcsolatban&pnr=1. (Statement of the Office of the President). Interestingly enough, the last group of judges were released by the president just days before the decision of the Constitutional Court was announced, which indicates that the president knew the content of the decision in preparation. Order of the President of the Court of Justice of 13 July 2012 in Case C-286/12.

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The Court ruled in November 2012 that Hungary had failed to fulfil its obligations under the Directive, since the national compulsory retirement scheme gave rise to a difference in treatment on grounds of age, which was not proportionate in regard to the objectives pursued.22 In the judgment the ECJ emphasized that the case was admissible despite the fact that the Hungarian Constitutional Court declared part of the contested national law unconstitutional and repealed those provisions retrospectively from 1 January 2012. The reason for this was, first of all, that the decision of the national Court did not affect the termination of the judges’ employment relationships. Therefore, these persons were not automatically reinstated to their position, but were obliged to bring proceedings for their reinstatements, and the outcome of such proceedings was uncertain. Regarding the substance of the case, the Court of Justice held that the compulsory retirement gave rise to a difference in treatment based directly on age because the national measures of compulsory retirement directly imposed less favourable treatment of individuals engaged in those professions, as compared with younger employees in the same profession who could remain in their post since they had not reached the age limit. After finding discrimination on the ground of age, the ECJ examined whether according to Article 6(1) of the Directive examined the challenged provisions were objectively and reasonably justified by a legitimate aim, and whether the means of achieving that aim were appropriate and necessary. In this respect, the Court first examined the standardization of the compulsory retirement age in the public sector, and found that it can constitute a legitimate employment policy objective and that, in principle, the Hungarian measures were appropriate means of achieving this aim23. But on the other hand, the Court stated that the contested provisions were not necessary to achieve this objective because they abruptly and significantly lowered the compulsory retirement age, without introducing transitional measures24 to protect the legitimate expectations of the persons concerned that they would remain in office until the age of seventy.25 Similar to the Hungarian Constitutional Court, the ECJ took into account that after 1 January 2012, judges had a very short period to prepare for the consequences of the new law, and to take the necessary financial measures since they were required to retire after six months or, at best, one year. As a

22 23 24 25

ECJ, 6 November 2012, Case C—286/12, Commission v. Hungary. ECJ, 6 November 2012, Case C—286/12, Commission v. Hungary, §§ 61–62. ECJ, 6 November 2012, Case C—286/12, Commission v. Hungary, §§ 67 and 69–70. ECJ, 6 November 2012, Case C—286/12, Commission v. Hungary, §§ 68 and 71–72.

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result, the interests of judges affected by the lowered retirement age were not taken into account in the same way as those of other public sector employees. Regarding the second objective of the law, namely to establish a more balanced age structure facilitating access for young lawyers to these professions, the Court also acknowledged that such an objective can constitute a legitimate aim of employment and labour market policy.26 But again, the chosen measures were not appropriate to achieve that objective, because the positions would be occupied for a long time by young lawyers who entered the profession in 2012 and 2013 due to their colleagues’ early retirement, and for whom the compulsory retirement age would be raised progressively from sixty-two to sixty-five27. Therefore the short-term effects were liable to call into question the possibility of achieving a truly balanced age structure in the medium and long terms. The decisive element of the Court’s analysis in the case was the proportionality of Hungarian law, that is, whether it was appropriate and necessary with regard to the goals highlighted.28 Commission v. Hungary was the first judgment where the Court of Justice found a standard national statutory retirement measure to be in violation of EU law. The other peculiarity of the case was that the application of a strict proportionality test, a “balancing approach,” changed the outcome of the case. However, the justices acknowledged the right of Member States to use pensionable age to manage the labour market as such, thus national laws encouraging retirement at a certain age are still in principle presumptively proportionate, but the provisions are not necessary if they abruptly and significantly lower the age limit for retirement without introducing transitional measures to protect the legitimate expectations of the persons concerned. This means that the strict proportionality analysis applies to the execution of such changes; in other words, if a Member State wants to change the age limit, it has to provide a sufficient anticipation period. The decision of the Court of Justice did not touch upon the issue of independence of the judiciary, unlike the Advocate General, who similarly to the Hungarian Constitutional Court argued that the sudden retirement of a large number of judges raises doubts concerning the independence of the judiciary, since this principle includes the precept that the executive has to avoid any external intervention or pressure on members of the court. According to the Advocate General’s opinion, even if the direct objective of this law was not direct intervention into the judiciary, since it did not concern 26 27 28

ECJ, 6 November 2012, Case C—286/12, Commission v. Hungary, § 77. ECJ, 6 November 2012, Case C—286/12, Commission v. Hungary, § 78. ECJ, 6 November 2012, Case C—286/12, Commission v. Hungary, § 79.

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individual judges or cases, the principle of judicial independence requires that even indirect breaches of this principle must be avoided.29

the aftermath of the decisions In December 2012, shortly after the ECJ’s judgment, the Hungarian government submitted a new bill to pass special rules for those who were unlawfully dismissed and to comply with the requirements following from the Court of Justice decision. Act 20 of 2013 was passed on 11 March 2013 and entered into force on 25 March 2013. According to this new law, the retirement age of judges, prosecutors and notaries will be gradually reduced from seventy years to sixty-five years by 1 January 2023. In the meantime, the general statutory retirement age will be increased to sixty-five years. This means that judges who would be entitled to an old-age pension will have to choose between receiving the pension and working as a judge. Any affected judge will have sixty days to make the decision, and if he/she fails to request the suspension of the payment of pension, he/she will be dismissed in a fast-track disciplinary proceeding. According to Act 20 of 2013, unlawfully dismissed judges (as well as prosecutors and notaries) have the following three possibilities, which are equally applicable to the earlier judgments and in the transitional period until the age limit will be decreased to sixty-five years. First, if they request reinstatement into their former position, they then shall be fully compensated for their financial losses. The reinstatement of judges who were serving previously as heads of judicial panels is automatic; thus, they shall be reinstated irrespective of whether their post has been filled or not. Any other judges who previously filled a leading administrative position can regain their position only if it has not been filled in the meantime. If the position has been filled, the judge must be reinstated to another position but he/she shall receive the leadership allowance until the end of the leadership term. The judges concerned must make a statement within thirty days of the new Act coming into force should they wish to be reinstated. Second, unlawfully dismissed judges may choose retirement instead of reinstatement. In this case such a judge shall be paid a general compensation of a twelve-month salary, but any damage exceeding this amount shall be enforced in a lawsuit. Third, judges may also choose to be placed in a “reserve” position. These judges will stay retired but may be instructed to work in judicial positions for a maximum of two years in every three years for certain purposes (for example, as a replacement, or to reduce 29

Opinion of the Advocate General Kokott, European Commission v. Hungry, C-286/12 [2012], 54–55.

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extraordinary workload). In return for this work they will receive an allowance in addition to their pension. Due to the new regulation, the retirement age of the lawyers concerned will be gradually increased after a long transitional period, and the employment and social situation of the judges affected by the unlawful provisions will be adequately settled. One hundred and sixty-four of the affected judges launched a court procedure against their employers, and in all cases the labour courts found that the termination of employment was unlawful. Their judgments obliged the employing courts to reinstate the judges in their former employment and executive positions, if the judges asked for reinstatement. Fifty-six of them did so, and they were reinstated as judges, even if not necessarily into their previous leading administrative position, since in most of the cases it has already been filled in the meantime. Therefore, on 20 November 2013, the European Commission formally closed the legal proceedings launched against Hungary in January 2012 over the country’s forced early retirement of around 274 judges. According to the press release, the Commission is satisfied that Hungary has brought its legislation in line with EU law.30

the decision of the ecthr: the early dismissal of the chief justice While the Hungarian government was able to get rid of many court leaders by the early retirement legislation in the Transitional Provisions of the Fundamental Law, the term of Chief Justice, who was younger than sixty-two, had to be terminated in a different way. But the solution still came through the Fundamental Law, and its Transitional provisions. The Fundamental Law of 25 April 2011 established that the highest judicial body would be the Curia (the historical Hungarian name for the Supreme Court.), and the Transitional Provisions provided that the mandate of the President of the Supreme Court currently in office would be terminated upon the entry into force of the Fundamental Law. That meant that András Baka,31 President of the Supreme 30

31

Commission Press Release, IP/13/1112 (Nov. 20, 2013), http://europa.eu/rapid/press-release_IP13-1112_en.htm András Baka is a Hungarian national who was born in 1952 and lives in Budapest. Before the democratic transition of 1989, he was a researcher at the Legal Institute of the Hungarian Academy of Sciences. After the first democratic election in 1990, he became a member of the Hungarian Parliament as a representative of the Hungarian Democratic Forum, the governing party of Prime Minister József Antall. In 1991, he was nominated to the position of a judge at the European Court

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Court, would be fired on 1 January, the same day as the rules on the early retirement of the judges entered into force. The only formal argument given for removing him was that the Supreme Court’s title had been changed to the Curia, even though the structure and the authority of this body is not much modified; only a few technical aspects of its jurisdiction and the official name were changed. It seems hard to escape the conclusion that the logic of this personnel change was purely political: Baka criticized the new laws on the administration of judiciary and some other acts of Parliament concerning judges, including the reduction of the compulsory retirement age of judges. The Venice Commission’s (an advisory body of the Council of Europe) report on the Fundamental Law anticipated this problem in two ways: it raised the question whether the change of the name of the highest judicial body would result in replacement of the Supreme Court’s president by a new president of the “Curia” at § 107, and it also cautioned that the Transitional Provisions should not terminate the ongoing mandate in office of current office holders at § 140. The termination of Judge Baka’s term as president of the Supreme Court/Curia runs directly against both of these cautions.32 As Baka has been denied access to any Hungarian tribunal to defend his rights relating his premature dismissal, he submitted a complaint to the ECtHR under Article 6 (1) of the European Convention on Human Rights, contending that his dismissal was a result of enactments of both the former and the new Constitution, thereby depriving it of judicial review, even by the Constitutional Court. He also complained under Article 10 of the Convention that he was dismissed in connection with his views and public position expressed in his capacity as President of the Supreme Court on issues of fundamental importance for the judiciary. On 23 June 2016, the Grand Chamber judgment of the ECtHR stated that Hungary had infringed Baka’s right to fair trial, and his right to free expression was also infringed, because his removal may have been related to his criticism of the transformation of the organization of the courts.33 Whereas the mandate of the president was terminated by the Transitional Provisions to the Fundamental Law – an act with a quasi-constitutional

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of Human Rights. He served in Strasbourg until 2008. In 2009, he was elected by the Parliament of Hungary as President of the Supreme Court of Hungary for a six-year term, until June 2015. Opinion on the Fundamental Law of Hungary, Adopted by the Venice Commission at its 87th Plenary Session, 17–18 June 2011. Opinion no. 621 / 2011, Strasbourg, 20 June 2011. www.venice .coe.int/webforms/documents/default.aspx?pdffile=CDL-AD(2011)016-e Baka v. Hungary, Judgment of 23 June 2016. Application no. 20261/12.

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status – only the vice president could lodge a constitutional complaint, as his term was terminated pursuant to the Act on the organization and administration of courts. The Constitutional Court with a narrow majority of 8 to 7 found that the transformation of the organization of the courts and the significant modification of the scope of responsibilities of the Curia, its presidents and vice president provide sufficient constitutional justification for the shortening of their mandates.34 In other words, while President Baka’s access to the Constitutional Court has been denied, his deputy’s challenge was rejected, and as he did not turn to the ECtHR, he did not get any financial compensation either. Neither of the two could have been reinstated by the Strasbourg Court anyway. With its limited power to influence a Member State’s compliance with the Convention through deciding individual cases, the Committee of Ministers of the Council of Europe in 2004 adopted a resolution and a recommendation which provided the political ground for future pilot judgments. The Resolution invited the Court “to identify in its judgments . . . what it consider[ed] to be an underlying systemic problem and the source of that problem, in particular when it [was] likely to give rise to numerous applications”.35 In turn, the Recommendation adopted conjointly was addressed to member states and pointed out that, in addition to individual remedies, states have a general obligation to solve the problems underlying the violations found.36 Given that Central and East European states only enabled access to the Council of Europe in the 1990s,37 it seems questionable whether it would have been possible and advisable for the ECtHR to issue such a pilot judgment, designed to force governments to repeal rules incompatible with Europe’s fundamental values in the Baka case. In other words, the question is whether the legal solution of the dismissal of the Chief Justice represented a systemic defeat of the national law, which should be solved in abstracto. Unfortunately, the answer to this question is no. It is true that the rule 34 35

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Decision 3076/2013. (III. 27.) Resolution Res(2004)3 of the Committee of Ministers on judgments revealing an underlying systemic problem, 12 May 2004, available at: https://wcd.coe.int/ViewDoc.jsp?id.743257&Site .CM&BackColorInternet.9999CC&BackColorIntranet.FFBB55&BackColorLogged.FFAC75 Recommendation Rec(2004)6 of the Committee of Ministers to Member States on the improvement of domestic remedies, 12 May 2004; (2004) 26 HRLJ 116, available at: https://wcd .coe.int/ViewDoc.jsp?id.743317&Site.CM&BackColorInternet.9999CC&BackColorIntranet .FFBB55&BackColorLogged.FFAC75 About pilot judgment against these new Member States of the CoE, see W. Sadurski, ‘Partnering with Strasbourg: Constitutionalisation of the European Court of Human Rights, the Accession of Central and East European States to the Council of Europe, and the Idea of Pilot Judgments, Human Rights Law Review, 9:3 (2009), 397–453.

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regarding the early dismissal of the incumbent Chief Justice Baka seems to be a normative one, meaning that it is applied every time a similar situation occurs. In reality, the rule applied in the case of the termination of Baka’s term will not be applied ever again, as it was a transitory provision of the Fundamental Law to solve this one concrete case. For this reason, this concrete rule cannot be the subject of a pilot judgment, because this institution aims at changing unacceptable abstract norms in a national legal system, and this is not the case here. As this rule was made a transitory provision, after Baka’s dismissal it does not even exist anymore, and therefore even a pilot judgment would have been unable to force the Hungarian government to repeal it.

conclusion: a happy ending? Seemingly the three judgments in one way or another have been successful in solving this legal conflict. It is true that the common conclusion of the three decisions on the retirement age issue is that it is not the termination of employment due to the retirement age which is unlawful, but its rapid execution without an appropriate transitional period. Apart from this joint conclusion, the three decisions show remarkable differences in several respects. The Constitutional Court did not examine the aims and focused merely on the institutional, larger constitutional effects of the new law, namely the rapid turnover of one-tenth of the Hungarian judiciary. The Constitutional Court could also have, at least partly, based its judgment on the social consequences of this measure, and at least try to solve the problems of the fired judges. On the other hand, the issue of the joint European values and constitutional principles, such as judicial independence, were neglected by the judgment of the ECJ, and age discrimination became their exclusive concern. As to the third judgment, that of the ECtHR, even though provided remedy for the dismissed applicant Chief Justice, due to the jurisdictional limitations of the Court, it was unable to address the issue of judicial independence. The Constitutional Court, while declaring the legal regulation unconstitutional for the future, missed the opportunity to provide remedy for those who asked for it. This was certainly a political decision by a court, which at the time of the decision was packed by the governing majority, and was constantly threatened existentially by this same majority.38 The ECJ, in contrast, by 38

During the preparation of the Fundamental Law there were widespead rumours that the government seriously considered to degrade the Constitutional Court into a chamber of the Curia.

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choosing a rather technical way to tackle the issue on the merits, missed the opportunity to clarify the meaning of judicial independence in the Charter of Fundamental Rights of the European Union, and the criteria for the de facto dismissal of the judges. Some commentators argue that it is understandable that the ECJ wanted to stay away from the Hungarian internal politics. They suggested that it was far easier to approach the matter as if they were merely enforcing the existing EU law rather than politically evaluating the constitutional framework of a Member State.39 And this was also a political decision by the ECJ. Those who praise the judgment of the ECJ argue that it is understandable that the judges in Luxembourg did not touch upon the issue of judicial independence, since it concerns the constitutional order of Member States, which is arguably part of their national identity that the Court of Justice has to respect under Article 4(2) of the Treaty of the European Union (TEU).40 But one can wonder why this Article is more important than Article 2 TEU, which guarantees the respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail. Independence of the judiciary as elements of a democracy governed by the rule of law certainly belongs to these values, which is also a precondition for the enjoyment of human rights, and the ECJ has to protect them, and in the case of conflict with Article 4(2) even give priority to them.41

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41

See Mark Dawson and Elise Muir, “Hungary and the Indirect Protection of EU Fundamental Rights and the Rule of Law”, 14 German Law Journal, 2013. 1970. More generally, see also Mark Dawson and Elise Muir, “Enforcing Fundamental Values: EU Law and Governance in Hungary and Romania”, 4 Maastricht J. of Eur. and Comp. L. 469, 2012. Conversely cf. Armin von Bogdandy et al., “Reverse Solange – Protecting the Essence of Fundamental Rights Against EU Member States”, Common Market L. Rev. 489, 2012. See T. Gyulavári and N. Hős, “Retirement of Hungarian Judges, Age Discrimination and Judicial Independence: A Tale of Two Courts,” Indust. L.J., Vol. 42, No. 3, September 2013, 289–97, at 297. Realizing that referring to Article 2 TEU in an infringement procedure is unusual, even if not excluded, for the ECJ, there is a proposal for a so-called systematic infringement action, according to which the Commission could signal systemic complaints against a Member State by bundling a group of individual infringement actions together under the banner of Article 2 with the argument that the set of alleged infringements rises to the level of a systemic breach of basic values. See Kim Lane Scheppele, “EU Commission v. Hungary: The Case for the ‘Systemic Infringement Action’.” Verfassungsblog on Matters Constitutional, 22 November 2013. Accessed 23 February 2015. www.verfassungsblog.de/en/the-eu-commission-v-hungary-thecase-for-the-systemic-infringement-action/#.VOuCfrMbA-B.

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The mentioned European Parliament Resolution of 3 July 2013 on the Situation of Fundamental Rights: Standards and Practices in Hungary regrets “that not all unlawfully dismissed judges are guaranteed to be reinstated in exactly the same position with the same duties and responsibilities they were holding before their dismissal”.42 And the aim of the Hungarian government with the reduction of the retirement age of the judges was exactly to get rid of the most of the court presidents, and replace them with new ones, loyal to the government. Since this aim has been fulfilled, and with this the independence of the judiciary is undermined, the two judgments cannot be deemed as a success of the rule of law in a Member State of the European Union. If the institutions of the European Union are not able to defend the very principles of the Treaty, more and more Member States will be encouraged not to comply with them, as we have just witnessed in the behaviour of the EastCentral European countries during the refugee crisis. As a consequence of this dangerous development, the Union will cease to be a community of values. The judgment of the ECtHR in the case of Baka v. Hungary is different from the two other decisions discussed here. On the one hand, it is not about the normative regulation of the retirement age of the judges, which indeed concerned a lot of them; on the other hand, it was an individual complaint of one applicant, and the remedy directly also concerned also this only person. But there are certainly joint elements in the retirement age cases and the dismissal of the Chief Justice. While the former aimed at getting rid of as many aged court leaders, who were presumably not loyal to the government, as possible, the aim of the early termination of the Supreme Court President’s term was to replace the head of the entire judiciary, who was critical towards the new judicial system, which curtailed the independence of the judiciary. In this respect, the Baka case was also an issue of judicial independence, threatened by legislative means, even if this was the new Fundamental Law itself. In such cases the ECtHR could have considered a pilot judgment, but as we just demonstrated, due to the fact that the transitory rules on the early dismissal were applied only at one occasion in the case of Mr. Baka, and are not in force anymore, the ECtHR was unable to issue a pilot judgment. Therefore, contrary to the decisions of Constitutional Court of Hungary and the ECJ, we cannot consider the judgment of the ECtHR as a missed opportunity to enforce judicial independence. 42

See } 32 of the so-called “Tavares Report”: European Parliament Resolution on the Situation of Fundaments Rights: Standards and Practices in Hungary, www.europarl.europa.eu/sides/ getDoc.do?type=TA&language=EN&reference=P7-TA-2013-315

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part vi

Beyond the EU Borders

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25 Viking’s ‘Semantic Gaps’ Law and the Political Economy of Convergence in the EU

peter l. lindseth

introduction The Viking judgment of the European Court of Justice (ECJ) of December 2007,1 together with the decision in Laval in the same month,2 are famous for subjecting the right to strike under national law to certain potential limitations deriving from European law. In the case of Viking specifically, those limitations flowed from the need to balance the right to strike against the freedom of establishment under ex Article 43 EC (now Article 49 TFEU). To the critics of this jurisprudence (and there are many),3 the shocking nature of Viking was the idea that the right to strike, no matter how ‘fundamental’ in national law, could not trump the supranational right to free establishment, but rather could merely restrict it, and then only proportionately. The specific holding in the case, however, as well as the ensuing controversy in the EU legal literature, are not really our concern here, or at least not directly. Rather, the focus of this chapter is on what the judgment does not say – on its ‘semantic gaps’, so to speak – most importantly between the ECJ’s emphasis on balancing ‘rights’ in a constitutional/legal sense and the 1

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Case C-438/05, International Transport Workers’ Federation and Finnish Seamen’s Union v Viking Line ABP and OÜ Viking Line Eesti, 2007 ECR I-10779 (hereinafter ‘Viking’). Case C-341/05, Laval un Partneri Ltd v Svenska Byggnadsarbetareförbundet and Others, 2007 ECR I-11767 (hereinafter ‘Laval’). The literature on the Viking and Laval decisions is vast, and in the interest of space I will not provide a long string of citations here. For an article that collects and discusses the literature (particularly of a critical nature), see Mitchel Lasser, ‘Fundamentally Flawed: The CJEU’s Jurisprudence on Fundamental Rights and Fundamental Freedoms’, 15 Theoretical Inquiries in Law 229, 230–31, nn. 2–4 (2014); see also Damjan Kukovec, ‘Law and the Periphery’, 21 European Law Journal 406, 412–13, n. 29 (2015). For a comprehensive analysis of the literature, see Catherine Barnard, ‘The Calm after the Storm: Time to Reflect on EU (Labour) Law Scholarship Following the Decisions in Viking and Laval’, in A. Bogg, C. Costello and A.C.L. Davies, Research Handbook on EU Labour Law (Edward Elgar 2016).

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European Commission’s more technocratic/political role as manager of the Cohesion Policy, which necessarily emphasizes economic and social factors.4 By focusing on these differing institutional and policy perspectives, this chapter seeks to refocus our attention on the broader challenge of legal, political and economic ‘convergence’ that lies at the heart of the integration process, particularly after the EU’s enlargement in 2004. The attempt at a combined perspective here also seeks to understand the tensions flowing from enlargement in the context of the political economy of market integration, with an eye to the historical experience in the North Atlantic world stretching back to the nineteenth century.

the right to strike, freedom of establishment and convergence Before proceeding to that broader discussion, however, a look at the standard legal understanding of Viking is in order, at least by way of background. The judgment famously arose out of the effort by the Viking Line to shift the registration of one of its passenger ferries (the Rosella) from Finland to Estonia, a move that also included Viking’s establishment of a new Estonian subsidiary. The stated purpose of the reflagging was to take advantage of lowercost Estonian crews in order to return the ferry to profitability in the lucrative Helsinki-Tallinn market. Viking intended to negotiate a new labor agreement with an Estonian union as part of the reflagging. The case thus seemed, from a labor-law perspective (especially in Western Europe), a classic instance of ‘social dumping’ in which an employer relocated certain operations to another country (Estonia) in order to escape higher-cost labor rights in the country of origin (Finland). From that perspective, collective action was eminently justified and almost inevitable. And in fact, the Finish Seamen’s Union (FSU), aided by the London-based International Transport Workers Federation (ITF), did indeed take collective

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This chapter’s focus derives from my participation in an April 2010 conference at Harvard Law School on ‘Developing Europe: Regional Policy and Free Markets in European Legal Discourse’. I thank Daniela Caruso, one of the conference organizers (and a fellow contributor to this volume), for suggesting the idea of ‘semantic gaps’ as a focus of my analysis. This chapter builds on my intervention on the first panel, ‘The ECJ as Development Institution: Viking Meets the Regions’. For a flavor of the differing views presented on that panel, compare Lasser, supra note 3, and Kukovec, supra note 3. See also Damjan Kukovec, ‘Whose Social Europe? The Laval/Viking Judgments and the Prosperity Gap’, IGLP Working Paper Series 2011/#3, Institute for Global Law and Policy, Harvard Law School (April 16, 2010), available at http:// papers.ssrn.com/sol3/papers.cfm?abstract_id=1800922 (last visited 19 April 2015).

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action against Viking as a consequence of the reflagging. This included not just strike action by the FSU itself but also the issuance of a circular by the ITF, pursuant to its so-called ‘Flag of Convenience’ policy (about which more below). This circular called on other member unions (including the Estonian, an obvious beneficiary of the reflagging) not to negotiate with the Viking Line or face sanction, the worst being exclusion from the ITF itself. As these sorts of transnational disputes almost inevitably do in Europe, a lawsuit ensued – by Viking in London, the ITF’s seat – challenging both the FSU’s strike action in Finland and the ITF’s circular throughout Europe. The lawsuit in turn led to the preliminary reference that gave rise to the Viking judgment in December 2007. In their arguments before the ECJ, the FSU and ITF both claimed that the right to strike was by its nature ‘fundamental’ in a constitutional sense and thus could not be subjected to a limitation flowing from an employer’s freedom of establishment under EU law.5 The ECJ disagreed, finding that the right to strike, although it could well justify a restriction on the freedom of establishment, could not be used in a manner that was disproportionate to the purpose of protecting workers.6 The decision was profoundly disappointing to those who hoped the Court would take this opportunity to give preeminence to the social dimension of integration over its seemingly excessive neo-liberal orientation.7 The standard legal understanding of Viking, however, is arguably incomplete, at least from the perspective that this chapter seeks to advance. The judgment of the Court, and to a lesser extent the opinion of the Advocate General Miguel Maduro, arguably danced around an issue that the Commission, in its role as administrative manager of the EU’s Cohesion Policy, must confront directly. I am referring, of course, to the difficult challenge of ‘convergence’, a term that appears nowhere in the Court’s judgment or Maduro’s opinion. Yet at the time of the dispute, convergence was in fact the number one priority of the Cohesion Policy – the so-called ‘convergence objective’ – taking up 80 per cent of the total structural/cohesion budget and 35 per cent of the total EU budget in the 2007–2013 budgetary period.8 From the Commission’s perspective, convergence referred to the effort to close the

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Viking, 2007 ECR I-10825–29, paras. 38–55. 7 Viking, 2007 ECR I-10834–38, paras. 75, 85, 87 and 90. See supra note 3. See European Commission, Cohesion Policy 2007–13: Commentaries and official texts, available at http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2007/ publications/guide2007_en.pdf (last visited 28 February 2015); on the budget allocations under the 2007-13 Financial Framework, see ‘Where does the money go?’ available at http://ec .europa.eu/budget/explained/budg_system/fin_fwk0713/fin_fwk0713_en.cfm (last visited 28 February 2015).

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wealth gap between the richest and poorest regions in the EU, measured in terms of per capita GDP. At the time of accession, Estonian GDP per capita fell below 75 per cent of the EU average (in fact, as measured against the EU15, it came in around 45 per cent). This meant that Estonia easily qualified for funding under the Commission’s convergence objective and, as a consequence, the country was scheduled to receive €3.4 billion of development aid from its EU partners over 2007–2013.9 This came on top of the aid that Estonia had already received for purposes of facilitating accession in 2004, under the two major pre-accession cohesion programs, PHARE and ISPA.10 The pre-accession funding (especially under the PHARE program) is of particular interest here, because its purpose was to assist Estonia in bringing its laws, regulations and administrative capacity up to EU standards. This was obviously a wide-ranging undertaking, but several EU-funded pre-accession projects suggest how the cohesion funding might have helped to pave the way, at least indirectly, for the Viking dispute. Most importantly, the Commission provided extensive funding to Estonia to implement the Community’s transport acquis, and this also specifically extended to a number of efforts in the maritime sector. The latter included investments in infrastructure (which had degraded during the Soviet era), reforming Estonia’s statutory and regulatory regime as well as its administrative capacity with regard to maritime safety and inspections (so-called ‘flag state controls’ and ‘port state controls’), and finally a range of various other tasks relating to vessel traffic service, winter navigation, quality management, human resource development, the carriage of dangerous goods, and training.11 It is difficult to imagine that the Viking Line would have risked its brand by reflagging the Rosella without Estonia meeting these essential EU regulatory and safety requirements. Indeed, meeting the requirements of the maritime acquis was one of the conditions to Estonia’s accession, without which Viking could not have exercised its freedom of establishment in the first place. Thus, if the PHARE funding could not be said to have been a proximate cause of the eventual labor dispute, it could nonetheless be said to

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Estonia: Results of the Negotiations of Cohesion Policy Strategies and Programmes 2007–13, available at http://ec.europa.eu/regional_policy/sources/docoffic/official/communic/ negociation/country_ee_en.pdf (last visited 28 February 2015). Regarding PHARE, see http://europa.eu/legislation_summaries/enlargement/2004_and_2007_ enlargement/e50004_en.htm (last visited 28 February 2015); regarding ISPA, see http://ec .europa.eu/regional_policy/archive/funds/ispa/ispa_en.htm (last visited 28 February 2015). See generally Dan Heering, Estonian Maritime Academy, Estonia, ‘EU Phare Twinning Project: Strengthening Enforcement of Maritime Safety’, available at www.solomonchen .name/download/7ms/1-006-s2-heering.pdf (last visited 28 February 2015).

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have been one of the causes-in-fact given its essential role in the necessary legal/regulatory convergence that made Estonian accession possible.

from legal/regulatory to economic convergence: the perspective of history This is all very interesting, of course, but it really does not capture the full importance of the concept of convergence as it relates to this case. Convergence is not simply a bit of Brussels jargon in the administration of the Cohesion Policy, nor is it limited to the legal/regulatory dimension of integration. Rather, convergence is also a core concept used by trade economists and, perhaps more importantly, economic historians to understand the process of globalization over the course of the late nineteenth and early twentieth centuries. Understanding convergence in terms of political economy, I suggest, helps us to better appreciate some of the unstated tensions underlying the Viking judgment. To exemplify this particular dimension of the case, I turn to the work of Kevin O’Rourke and Jeffrey Williamson (economic historians at Oxford and Harvard respectively) and their co-authored volume, Globalization and History: The Evolution of the Nineteenth-Century Atlantic Economy, which appeared in 1999.12 For O’Rourke and Williamson, the key indicator of the integration of two markets is the increasing convergence of prices (which in the case of labor means the convergence of real wages). This sort of convergence can occur in two ways. First, it can occur through the removal of legal barriers to free movement (crucial in the modern European case, of course, but also important in nineteenth-century Europe through an array of bilateral trade agreements). Second, it can occur through technological developments that lead to the lowering of transportation or communication costs to such an extent that any remaining legal barriers could be overwhelmed (this was the decisive factor in the case of the nineteenth-century Atlantic world, where price convergence was a consequence of steam power and the telegraph – the so-called ‘transportation and communication revolutions’). As markets become more open to external influences in these ways, prices set in (previously isolated) market A can begin to affect the prices in (previously isolated) market B – and vice versa. This price convergence signifies the creation of a new, larger, integrated market with a better price mechanism and more allocative efficiency, thus leading to greater overall wealth creation. Or 12

Kevin O’Rourke and Jeffrey Williamson, Globalization and History: The Evolution of the Nineteenth-Century Atlantic Economy (MIT Press 1999).

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so the theory goes. However, the process of convergence is never so seamless as the theory might predict. There are always potential complications flowing from political and legal opposition/contestation (the strike actions underlying Viking are simply modern examples of this persistent phenomenon). In other words, the forces of convergence always operate under threat of backlash by social groups whose interests are threatened by market integration. Indeed, the story of the evolution of the Atlantic economy in the mid- to late nineteenth and into the twentieth century is a case in point. O’Rourke and Williamson recount how dramatically declining transportation costs for commodities (e.g., wheat) led to market convergence through the decline in prices in Europe and an increase in prices for these commodities in the New World. Conversely, mass migration from labor-rich Europe to the relatively labor-poor New World led to a measurable convergence in real wages between the two sides of the Atlantic over the same period. Was political backlash therefore inevitable in these circumstances? Not necessarily. The political consequences of price convergence could be managed, O’Rourke and Williamson suggest, as long as the integrating markets and polities enjoyed similar ‘factor endowments’ (for example, as to the prevailing price of key trade commodities or the cost of labor). It is only when the process of convergence takes place between markets and polities with very different factor endowments that one sees serious backlash over the distributional consequences of convergence. This was in fact the case in the mid- to late nineteenth-/early twentiethcentury Atlantic economy. As the transportation revolution reduced the costs of moving key commodities such as wheat over long distances, this led powerful landed interests in Europe to demand higher tariffs on imported foodstuffs. Similarly, as the transportation revolution facilitated mass migration, target countries such as the United States imposed increasingly stringent immigration controls. These were often instituted at the behest of the nascent domestic US labor movement, which was vulnerable to the resulting downward pressure on real wages. The import of this historiography to our discussion of Viking should be obvious. The driving force behind the Viking dispute was the dramatically lower labor costs in Estonia, which explained both the Viking Line’s decision to reflag the Rosella and the FSU’s decision to strike, as well as the decision to enlist the aid of the ITF through its circular enforcing solidarity among member unions. The very purpose of the collective action was to prevent Viking, even if it successfully reflagged the Rosella, from paying the new crew the wage rates that prevailed in Estonia (in effect, to prevent downward ‘convergence’ toward Estonian wage levels). The irony, of course, was that

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the Commission’s cohesion funding – particularly its pre-accession funding to implement the maritime acquis – helped to pave the way for the Viking Line to exercise its freedom of establishment under EU law and thus to seek to reflag the ship. Indeed, this arguably was the purpose of the pre-accession and cohesion funding: to help Estonia to attract foreign direct investment (FDI) by, inter alia, increasing investors’ confidence in the country’s legal and administrative infrastructure, thus allowing them to take advantage of Estonia’s lower labor costs. Seen in this light, the gap between the Commission’s ‘administrative’ cohesion policy and the rights-based ‘constitutional’ balancing of the Viking court is not just ‘semantic’ but perhaps also ‘substantive’. The Commission, in its administrative role in implementing pre-accession funding and the Cohesion Policy, necessarily focused on facilitating convergence not just in legal/ regulatory but also in ultimately economic terms, albeit within significant budgetary constraints. In the Viking judgment, however, the ECJ was compelled to recognize, as a matter of EU law, the legitimacy of collective action for ‘the protection of workers’13 (a phrase ambiguous enough to extend to strikes to combat any downward pressure on wages as a consequence of the 2004 enlargement).14 The Court was thus not merely cognizant that European integration should entail a ‘social dimension’; rather, it was also apparently sensitive to the need to manage the potential distributional consequences of market integration that such a dimension would entail. Distributional consequences of this type were unavoidable, of course, given the very different factor endowments – labor costs – between Finland and Estonia, and by proxy between the EU-15 versus the countries of Central and Eastern Europe that acceded in 2004. Hence the Court’s struggle to strike a balance between the (national) right to strike and the (supranational) freedom of establishment in these circumstances, as exemplified by the following two passages from the Viking judgment: [T]he right to take collective action for the protection of workers is a legitimate interest which, in principle, justifies a restriction of one of the fundamental freedoms guaranteed by the Treaty [i.e., freedom of establishment].15 (. . .) That restriction may, in principle, be justified . . . provided that it is [also] established that the restriction is suitable for ensuring the attainment of the

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Viking, 2007 ECR I-10834–38, paras. 77, 90. Viking, 2007 ECR I-10834, para. 77.

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Viking, 2007 ECR I-10836, paras. 81, 83–84.

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legitimate objective pursued and does not go beyond what is necessary to achieve that objective.16

The Court chose to leave it to the national court to determine whether or not the collective action undertaken by the FSU and the ITF met the conditions of suitability and proportionality. However, the ECJ tipped its hand a bit about what it thought was the correct solution by stressing that the actions of the FSU and ITF needed to be viewed in quite different lights. Although the Court noted some potential factual questions regarding the FSU’s actions,17 it nonetheless articulated a presumption that operated decidedly in favor of the national union: ‘[I]t should be borne in mind that it is common ground that collective action . . . may, in the particular circumstances of a case, be one of the main ways in which trade unions protect the interests of their members.’18 By contrast, the Court viewed with much more skepticism the ITF’s circular enforcing solidarity among other national unions based on its so-called ‘Flag of Convenience’ (FOC) policy. According to the FOC policy, ‘only unions established in the State of beneficial ownership have the right to conclude collective agreements covering the vessel concerned’.19 The Court found that the FOC policy ‘cannot be objectively justified’ even if its purpose was ‘to protect and improve seafarers’ terms and conditions of employment’.20 One of the principal problems, the Court noted, was the indiscriminate nature of the policy, which applied regardless of whether the second State ‘guarantees workers a higher level of social protection than they would enjoy in the first State’.21 The real problem with the ITF’s circular, however, did not relate to its potential logical flaws but its impact on economic convergence of the type discussed by O’Rourke and Williamson above. On this point specifically, there truly was a ‘semantic gap’ in the Court’s reasoning, forcing us to look beyond the wooden and often opaque language of the judgment to the more accessible opinion of the Advocate General. As Miguel Maduro eloquently explained, the ITF’s circular did not merely seek to protect Finnish wages and jobs; rather, it sought to ‘partition’ the labor market by inhibiting the possibility of any convergence pressures being felt at all: Collective action that has the effect of partitioning the labour market and that impedes the hiring of seafarers from certain Member States in order to protect the jobs of seafarers in other Member States would strike at the heart

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Viking, 2007 ECR I-10838, para. 90. Viking, 2007 ECR I-10837, para. 86. Viking, 2007 ECR I-10838, para. 88.

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Viking, 2007 ECR I-10836, paras. 81–84. Viking, 2007 ECR I-10812, para. 8. Viking, 2007 ECR I-10838, para. 89.

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of the principle of non-discrimination on which the common market is founded.22 (. . .) A policy of coordinated collective action could easily be abused in a discriminatory manner if it operated on the basis of an obligation imposed on all national unions to support collective action by any of their fellow unions. It would enable any national union to summon the assistance of other unions in order to make relocation to another Member State conditional on the application of its own preferred standards of worker protection, even after relocation has taken place. In effect, therefore, such a policy would be liable to protect the collective bargaining power of some national unions at the expense of the interests of others, and to partition the labour market in breach of the rules on freedom of movement.23

Although Maduro cast the foundation of his concern in normative terms (‘non-discrimination’), his real point was unavoidably economic, and it went to the heart of convergence as a crucial dynamic in market integration. The problem with the ITF’s FOC circular, as Maduro suggested, was that it ‘entirely negate[d] the rationale of the common market’24 – i.e., the establishment of a price linkage between markets A and B as we were discussing above. In other words, it was one thing for the national union to strike to protect Finnish jobs and wages, but it was quite another to enlist the aid of the ITF to enforce solidarity among all national unions, including the Estonian (and against its own immediate interests). In order for market integration to have any hope of succeeding, one could not use the ‘social dimension’ of integration to hermetically seal national labor markets from convergence pressures entirely. European integration must strike a balance, respecting the existence of certain social rights (hence the favorable view of the actions of the FSU) but also somehow institutionalizing a certain degree of legal, political and above all economic permeability in order to allow convergence forces to be felt. That is where one finds ‘the rationale of the common market’ in an economic sense.

viking and the process of institutional and legal change in europe Economy, however, is not destiny, as the old saying goes, at least insofar as historical processes of institutional and legal change are concerned. In order 22

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Opinion of Advocate General Poiares Maduro delivered on 23 May 2007 (hereinafter ‘AG Opinion in Viking’), 2007 ECR I-10784, I-10801, para. 62. AG Opinion in Viking, 2007 ECR I-10804, para. 71. AG Opinion in Viking, 2007 ECR I-10803, para. 68.

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to understand those processes in this case – that is, as a concrete manifestation of the struggle over the creation of an integrated labor market in the EU – one must undertake an examination along three interrelated historical dimensions:  The first is functional, in which existing institutional structures and legal categories are brought under pressure and even transformed as a consequence of social and economic demands that governing bodies seek to address or facilitate (e.g., the extension of markets beyond national borders, international competition, transnational environmental or financial challenges, etc.).  The second is political, in which divergent interests struggle over the allocation of scarce institutional and legal advantages in responding to these structural-functional pressures.  The third is cultural (in the sense that a historian uses the term), encompassing the ways in which competing notions of legitimate governance – conceptions of ‘right’ (often legally expressed) – are then mobilized to justify or resist these changes in institutional and legal categories or structures. The interaction of these dimensions results in a complex interplay of reciprocal influences that can only be explored historically, through an analytical narrative of institutional and legal evolution that tries its best not to privilege change along any single dimension at the expense of the others. This process of change is punctuated, finally, by the quest for ‘settlement’, in which actors seek to reconcile developments in the various dimensions in some roughly stable way. The reconciliation aims at satisfying structural-functional and political demands while still allowing the outcome to be experienced in terms of persistent, though evolving, cultural conceptions of legitimacy.25 The Viking case can be understood as an instance in which all three dimensions of institutional change were at play. The core purpose of European integration – its functional sine qua non – has always been market integration through the removal of barriers to free movement/free establishment. This functional removal inevitably acts in tension with ancillary legal and institutional advantages, which sets off an essentially political process 25

For a work applying this theory of institutional change to European integration, see Peter L. Lindseth, Power and Legitimacy: Reconciling European and the Nation-State (Oxford University Press 2010). For further elaboration, see Peter L. Lindseth, “Between the ‘Real’ and the ‘Right’: Explorations Along the Institutional-Constitutional Frontier,” in Constitutionalism and the Rule of Law: Bridging Idealism and Realism, ed. Maurice Adams, Ernst Hirsch Ballin, and Anne Meuwese (Cambridge University Press forthcoming), http://papers.ssrn.com/sol3/ papers.cfm?abstract_id=2716185.

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(in this case, between a ship owner and a seafarer’s union, not to mention between the divergent interests of workers in Finland and Estonia). This political process involved a struggle over existing or potential institutional advantages, not to mention money pure and simple. In this process of interest conflict, however, the parties necessarily mobilized cultural conceptions of ‘right’ (e.g., ‘free establishment’, the ‘fundamental’ character of the ‘right’ to strike, or indeed the idea of ‘social dumping’) in order to defend or realize institutional advantages in the face of functional pressures for change.26 Was the ECJ’s attempted ‘settlement’ in Viking the last word of the matter? Although scholars who are fixated on the idea of the Court as the ultimate ‘constitutional’ arbiter in the EU might assert otherwise, the answer is obviously ‘no’. In the quest for an enduring settlement in the process of market integration, the Court articulated what it thought should be the appropriate reconciliation among the various dimensions of change – functional, political and cultural. But it, too, was and is a player within (and not external to) this multidimensional process of contestation. In the shadow of an overarching functional commitment to market integration contained in the treaties, the Court nonetheless tried to remain sensitive to the existence of deeply embedded ‘social models’. It thus sought to balance the right to strike with freedom of establishment. In doing so, however, the Court introduced a clear proviso that the former could not be used indiscriminately to defeat the latter (hence the holding with regard to the ITF’s circular under the FOC policy). Indeed, one could argue that in many respects the Court was simply completing judicially the task that the Commission had begun administratively with its pre-accession and cohesion funding. The Court’s balance, at least insofar as the ITF’s actions were concerned, was ultimately one that went hand in hand with cohesion funding to promote FDI. In this regard, despite the semantic gap between the Court’s ‘constitutional’ balancing of ‘rights’ and the Commission’s ‘administrative’ implementation of the convergence objective, there was a deeper inter-institutional coherence, at least with regard to the ITF and its purported impact on market ‘partitioning’. In this regard, the Viking judgment might have seemed less shocking if only

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However, as Damjan Kukovec quite rightly points out, in the current array of power relations within the EU, these cultural conceptions of ‘right’ understandably reflected a structural bias in favor of the interests of the ‘centre’ (whether capital or labor) over those of the ‘periphery’. In these circumstances the crucial divide was perhaps east-west rather than left-right. See generally Kukovec, supra note 3.

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observers had paid more attention to the EU’s prior cohesion activities in the accession process.27

continuing contestation over convergence in a ‘demoi-cratic’ europe Nonetheless, from the perspective of those who saw the right to strike as ‘fundamental’ (a normative claim for which there was a good deal of support in national legal systems),28 this could hardly be the end of the discussion. And indeed, it was not; rather, the locus of contestation simply shifted elsewhere. In the aftermath of Viking, the European Trade Union Confederation (ETUC) quickly issued a call in March 2008 for a ‘Proposal for a Social Progress Protocol’ that would specify: ‘Nothing in the Treaties, and in particular neither economic freedoms nor competition rules shall have priority over fundamental social rights.’29 The European Commission in turn sought to reassure ‘that the recent ECJ judgments such as Viking and Laval do not jeopardise Member States’ choice of organisation of industrial relations, including the Nordic social model’.30 Over the next two years, consultations ensued, a report was commissioned (by a former internal market commissioner, Mario Monti)31 and the Commission then proposed a draft regulation (known as the ‘Monti II Regulation’), which by its terms sought to establish 27

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Cf. Catherine Barnard, ‘EU “Social” Policy: From Employment Law to Labour Market Reform’, in Paul Craig and Gráinne de Búrca, eds., The Evolution of EU Law (Oxford University Press 2011), p. 645 (‘seeds were sown for the problems that lay ahead, problems which culminated in the decisions of Viking and Laval’). See generally Carmen La Macchia, ed., The Right to Strike in the EU: The Complexity of the Norms and Safeguarding Efficacy (Ediesse 2011). European Trade Union Confederation, ‘Proposal for a Social Progress Protocol’, Brussels, 18/ 03/2008, available at www.etuc.org/proposal-social-progress-protocol (last visited 28 February 2015); see also Andreas Bücker, ‘A Comprehensive Social Progress Protocol is Needed More than Ever’, 2013(1) European Labour Law Journal 4–23. For an overview of reactions to Viking and related cases from the perspective of labor in the two years following the judgment, see Andreas Bücker and Wiebke Warneck, eds., Viking–Laval–Rüffert: Consequences and Policy Perspectives, Report 111, European Trade Union Institute, Brussels, 2010, available at www.etui .org/Publications2/Reports/Viking-Laval-Rueffert-consequences-and-policy-perspectives (last visited 28 February 2015). Statement by President J. M. Barroso and Commissioner Vladimir Spidla on the Adoption of the Recommendation on Posting of Workers, http://ec.europa.eu/commission_barroso/ president/pdf/statement_20080403_en.pdf, quoted in Bücker and Warneck, supra note 29, at 122. Mario Monti, A New Strategy for the Single Market, 9 May 2010, available at http://ec.europa .eu/internal_market/strategy/docs/monti_report_final_10_05_2010_en.pdf (last visited 28 February 2015).

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‘general principles and rules applicable at Union level with respect to the exercise of the fundamental right to take collective action within the context of the freedom of establishment and the freedom to provide services’.32 The proposed Monti II Regulation, however, proved deeply unsatisfactory to critics of Viking, precisely because it seemed to codify the balance struck by the ECJ rather than reasserting the primacy of the (national) right to strike over (supranational) market freedoms.33 Fortunately for Viking opponents, however, the new Treaty of Lisbon of 2009 offered another avenue of political contestation: the so-called ‘yellow card’ procedure under the new ‘subsidiarity early-warning mechanism’. This procedure requires the Commission to reconsider a legislative proposal if one-third of national parliaments submitted ‘reasoned opinions’ outlining objections. Following a political effort at the national level in which labor lobbying figured prominently, in early 2012 the Monti II Regulation became the first instance in which the requisite number of national parliaments mobilized against a Commission proposal, leading to its withdrawal.34 The fact that many of the national-parliamentary objections did not in fact go to subsidiarity proved immaterial; the strong manifestation of political opposition, often backed strongly by labor interests, was enough to make the Commission back down.35 As of this writing (April 2015), that is where the situation still effectively stands. The Viking jurisprudence remains in force but deeply contested. No EU-level treaty or legislative changes have been adopted to address the

32

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Proposal for a Council Regulation on the exercise of the right to take collective action within the context of the freedom of establishment and the freedom to provide services COM(2012) 130 final (‘Monti II Regulation’), Article 1(1). See, e.g., ETUC Declaration on the Commission Proposals for a Monti II.Regulation and Enforcement Directive of the Posting of Workers, 19 April 2012, available at http://etuc.org/a/ 9917 (last visited 28 February 2015); see also Keith Ewing, ‘The Draft Monti II Regulation: An Inadequate Response to Viking and Laval’, An IER Briefing, The Institute for Employment Rights, March 2012, available at www.ier.org.uk/resources/draft-monti-ii-regulation-inadequateresponse-viking-and-laval (last visited 28 February 2015) (‘there is nothing of merit in the Draft Monti II Regulation, the contents of which reflect a failure to understand the serious implications of the Viking and Laval decisions’). Letter by President Barroso to the President of the European Parliament, Mr Martin Schulz, Brussels, 12 September 2012, available at http://europa.eu/rapid/press-release_MEMO-12–661_ en.htm (last visited 28 February 2015); see generally Ian Cooper, ‘A Yellow Card for the Striker: How National Parliaments Defeated EU Strikes Regulation’, paper presented at the meeting of the European Union Studies Association, Baltimore, 9–11 May 2013, available online at http:// euce.org/eusa/2013/papers/12g_cooper.pdf (last visited 28 February 2015). For a critical analysis, see Federico Fabbrini and Katarzyna Granat, ‘“Yellow Card, But No Foul”: The Role of the National Parliaments under the Subsidiarity Protocol and the Commission Proposal for an EU Regulation on the Right To Strike’, 50 Common Market Law Review (2013), 115–44.

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tension. Short of a ‘Social Progress Protocol’ of the type advocated by the ETUC,36 opponents of Viking by necessity have been forced to place their faith in national parliaments and national politics more generally as their best line of protection. This recourse to the national dimension has, in some sense, only deepened in the context of the broader Eurozone crisis since 2010. Supranational discipline (now also of a fiscal and monetary rather than simply legal nature) continues to place considerable strain on social protections in any number of countries in the EU periphery.37 In such an environment, national democratic commitments in the integration process understandably intensify. This, in turn, may only further accentuate the polycentric – dare I say it, ‘demoi-cratic’38 – character of European political culture as it confronts a technocratic and juristocratic system of supranational governance, one perceived as increasingly detached and distant from national concerns or identities. Thus, as the struggle for ‘convergence’ in European market integration continues, the gap between supranational regulatory power and national democratic legitimacy will likely loom large, just as it has since the inception of European integration in the postwar decades.39 The struggle to overcome this gap will not be merely ‘semantic’ – something easily papered over by legal 36

37

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See supra note 29; see also ETUC, ‘Free movement, YES! Social Dumping, NO!’, February 26, 2015, available at www.etuc.org/publications/free-movement-yes-social-dumping-no# .VPH9k7PF8i4 (last visited 28 February 2015). See Claire Kirkpatrick and Bruno de Witte, eds., Social Rights in Times of Crisis in the Eurozone: The Role of Fundamental Rights’ Challenges, EUI Department of Law Research Paper No. 2014/05, 22 April 2014, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_ id=2428855 (last visited 1 March 2015). On this point, Christian Joerges reminded me in comments on this chapter that the initial impact of Viking and Laval in Italy was purportedly ‘zero’, at least until the European Central Bank, in the form of a letter from outgoing and incoming ECB Presidents Jean Claude Trichet and Mario Draghi, informed Italy of its pressing need to undertake labor market reforms in response to the Eurozone crisis. Compare Patrick Actis Perinetto, ‘Viking and Laval: An Italian Perspective, A Case of No Impact’, 3 European Labour Law Journal (2012), pp. 270–99, with Jean Claude Trichet and Mario Draghi, Letter to Prime Minister Silvio Berlusconi, 5 August 2011, available at www.corriere.it/ economia/11_settembre_29/trichet_draghi_inglese_304a5f1e-ea59-11e0-ae06-4da866778017 .shtml (last visited 9 March 2015). ‘Demoi-cracy’ refers to the idea that the ultimate legitimacy of European integration is disbursed among the various Member States, as multiple ‘demoi’, rather than embodied in the EU’s various supranational institutions as representatives of a single European ‘demos’. We owe the notion of European demoi-cracy to the pioneering work of Kalypso Nicolaïdis. See, e.g., Kalypso Nicolaïdis, ‘The Idea of European Demoicracy’, in Julie Dickson and Pavlos Eleftheriadis, eds., Philosophical Foundations of European Union Law (Oxford University Press, 2012); see also Peter L. Lindseth, ‘Equilibrium, Demoi-cracy and Delegation in the Crisis of European Integration’, 15 German Law Journal 529 (2014). See generally Lindseth, Power and Legitimacy, supra note 25.

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engineering at the supranational level – but also deeply, and perhaps painfully, ‘substantive’. It will entail a contest over legal, institutional and indeed economic advantages, as well as the mobilization of various conceptions of ‘right’ whose validity will not necessarily find universal acceptance in the various corners of the European market polity.40 In the quest for settlement, ‘[t]he main question’ is likely to become, as one commentator has put it, ‘which/whose social and which/whose free movement considerations are to be honoured and which are not to be honoured’.41 The process, however, need not necessarily be zero-sum; rather, a reciprocal, if difficult process of ‘reconciliation’ may be possible. However, this will be true only ‘if structural-functional and political demands are satisfied but the outcome is still recognizable from the perspective of persistent, although evolving, cultural conceptions of legitimacy’.42 That is the essence of institutional change. As the political and economic stakes of market integration become ever higher in the context of the Eurozone crisis, however, there will inevitably be more contestation, more backlash and more mobilization of various conflicting conceptions of ‘right’, at least before an enduring reconciliation and settlement, if any, can be found.

acknowledgements I would like to thank Daniela Caruso, Bill Davies, Christian Joerges, Damjan Kukovec, Fernanda Nicola and Katarzyna Szychowska for very helpful comments in the preparation of this chapter.

40

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Cf. Kukovec, supra note 3, at 411: ‘EU legal discourse has important distributional consequences between countries, between regions, and between the centre and periphery’, even if those consequences often defy open discussion in the current configuration of power relations in the EU. Moreover, the dominant legal discourse may reflect ‘a structural bias in the relevant legal institutions that makes them serve typical, deeply embedded preferences’. Id. at 416. However, functional demands (e.g., market integration, the resolution of the Eurozone crisis) have a way of straining those institutions and preferences, and the process of change will undoubtedly be painful for social interests whose institutional advantages come under threat. That is as true today in European integration as it was in the nineteenth-century Atlantic economy. See O’Rourke and Williamson, supra note 12, and accompanying text. 42 Kukovec, supra note 3, at 419. Lindseth, Power and Legitimacy, supra note 25, at 13–14.

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26 Melki in Context Algeria and European Legal Integration

daniela caruso and joanna geneve

introduction It all happened quickly in the spring of 2010. On Monday, 22 March 2010, at 2:15 PM, three policemen on patrol duty spotted a Citroën C4 coming from Saint-Aybert – a pre-Schengen frontier post between France and Belgium – and heading southwest towards Valenciennes.1 Nothing seemed wrong with the vehicle itself or the way it was driven, but somehow its passengers – five adult males of northern African origin – caught the attention of the officers, who turned on their lights and sirens and ordered the vehicle to stop. The driver obliged, and the officers proceeded to question everyone in the car. No weapons were found, and there was no resistance to interrogation or physical inspection, but the contrôle revealed that two of the passengers – Aziz Melki, aged twenty-six, and Selim Abdeli, aged nineteen – had no documents authorizing their entry into France.2 Within ten minutes the two Algerians found themselves arrested, and then unwittingly at the center of a judicial saga that is now well known in EU law circles. The arrest of Mr. Melki and his compatriot famously triggered a preliminary reference by the Cour de Cassation to the CJEU,3 an oblique intervention by the Conseil Constitutionnel,4 a notably conciliatory pronouncement in Luxembourg5

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Police report, on file with authors. While remaining solely responsible for any errors, the authors thank Romain Boucq for exceptional help with sources and background information. The driver and the other two passengers, all Tunisians in their thirties, had proper documents, but were briefly detained for having enabled the irregular entry into France of Melki and Abdeli, whom – allegedly – they barely knew. Id. Cass., Ass. Pl. QPC 16 avr. 2010, Abdeli et Melki. Décision No 2010–605 DC of 12 May 2010. Aziz Melki and Sélim Abdeli, CJEU Joined Cases C-188/10 and C-189/10, 2010 E.C.R. I-5667 (hereinafter ‘Melki’). See Claudina Richards, EU Law before French Courts: The Curious

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and a minimalist follow-up by the Cassation.6 The case also spurred extensive reflection on a recent reform of the French legal system – the ‘organic law’ of 2009 whereby French courts, once deemed to be no more than ‘la bouche de la loi,’7 can initiate ex post judicial review and identify possibly unconstitutional statutes.8 Many aspects of the Melki saga have been duly researched and dissected, with attention both to the primacy of EU law vis-à-vis Member States’ constitutions and to the relative roles of various courts and institutions.9 The law-in-context approach of some scholars has also brought to light the power struggles of notable exponents of the French academe, judiciary and political scene in connection to the Melki case.10 And of course, the immigration law angle of the story has received due attention.11 Yet coverage of the case remains lacking in two important respects. One is the personal story of Melki and Abdeli – their particular predicament, the circumstances in which they had left their country of origin and their current immigration status. On this front, the curious reader will remain somewhat dissatisfied, as no record exists concerning their journey before and after their arrest. All that is known is that they had remained under the authorities’ radar screen until their encounter with French law enforcement,12 and that they were probably released within days.13 Sans papiers generally eschew the limelight, and the lives of Melki and Abdeli, to the best of our knowledge, have so far evaded the public eye. Nonetheless, police records and informal correspondence with Mr. Melki’s attorney in Lille have allowed us to collect relevant details. Further information can be gathered by inference, on the

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Incident of the Question Prioritaire de Constitutionnalité (SSRN) (describing the judgment as conciliatory). Cass., QPC, 29 juin 2010, Melki et Abdeli N 10–40.002. Montesquieu, Esprit de Lois (1777) Livre XI, chapter 6, p. 327. Organic Law No 2009-1523 of 10 December 2009 on the application of Article 61-1 of the Constitution (JORF of 11 December 2009, p. 21379) inserted a new Chapter IIa, entitled ‘Priority Questions on Constitutionality,’ into Title II of Order No 58-1067 of 7 November 1958 on the organic law governing the Conseil constitutionnel. After this reform, ex post judicial review by the Conseil Constitutionnel can happen upon referral from the Conseil d’Etat or from the Cour de Cassation. Lower courts must channel their questions of constitutionality through either the Cassation or the Conseil d’Etat, which act as filters. Richards, supra n. 5. Arthur Dyevre, The Melki Way: The Melki Case and Everything You Always Wanted to Know about French Judicial Politics (But Were Afraid to Ask), Monica Claes et al. (eds.), On Constitutional Conversations (2012). Steve Peers et al, EU Immigration and Asylum Law 2012, at 60–61; Damian Chalmers et al., EU Law, 2014, at 528–30. A search through the Fichier National des Etrangers, immediately conducted by the policemen at the time of the arrest, did not yield their names. Police Report, supra n. 1. Electronic correspondence with Mr. Boucq, on file with authors.

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basis of data concerning irregular migration of Algerian nationals into France, as well as common policing practices in the French administrative division known as Départment du Nord (Number 59). The second section of this chapter sketches the backdrop against which the arrest and the legal representation of the two Algerians took place. The other aspect of Melki that has yet to receive proper consideration is the triangular framework in which it unfolded. Since its inception, the legal integration of Europe has had important repercussions on French-Algerian relations. Over time, the EU institutional architecture has emerged as a third vertex, besides Paris and Algiers, where old conflicts take new forms and seek new resolutions. The third section of this chapter recalls some salient episodes in this story of triangulation and links the Melki narrative to larger issues – namely the Union’s unresolved relation with its southern neighbours and the haunting legacy of colonial history. The difficulties encountered by Algerian sans papiers in France and the possibility of EU-level redress (the narrow subject of Melki) are only a small part of the picture. The impact of supranational law is larger and more layered when it comes to the EU’s external trade and cooperation policies. With regard to Algeria, these policies began to take shape when the country – an integral part of the original EEC – gained independence from France and thereafter was excised from the Community. By means of necessarily sketchy illustrations, it will be shown that these policies have often failed to ameliorate Algeria’s predicaments, and at times have even hindered its economic progress. The irregular migration of Mr. Melki and many others is most often a function of Algeria’s lack of economic diversification and spatial disparity – problems that remain enmeshed in the history and structure of EU-Algerian relations.

algerians in custody Representing Melki and Abdeli Police checks of the type undergone by Aziz Melki would have been illegal on the majority of French soil, but the contrôle took place less than 20 km from the Belgian border. In such frontier areas, the French Code of Criminal Procedure (Article 78-2(4)) allowed random police controls for reasons of public security. In the back seat of the Citroën, the two Algerians, eyes fixed on the odometer, were probably holding their breath and hoping to cover the first 20 km in a heartbeat. The two had entered France irregularly, i.e. without either a passport or a visa. In principle, a person in such circumstances could still receive a three-month permit of residence simply by filing an application

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with the local Préfecture. But in Départment 59 it seems that most irregular migrants were denied this possibility, and in any case neither Melki nor Abdeli had ever approached a Préfecture. Thus, caught with no documents at all during an ordinary inspection, the two were routinely ordered by the Préfect du Nord into administrative detention and subsequent deportation. The plot began to thicken when the Préfect’s order of 24 March 2010, requesting that detention be prolonged for another fifteen days, went up for review before the Juge des Libertés in Lille. Luckily for the young Algerians, the pro bono lawyer assigned to the case was not only a business attorney but also a Maître de Conference at the University of Lille, with experience in EU law and full awareness of the potential of judicial review newly introduced in the French system. For a long time, Attorney Romain Boucq had been upset by what could be characterized as ethnic profiling on the roads and by the arbitrary denial of short-term papiers in Lille. The code provision that authorized arrests in frontier zones, even though substantially upheld by the Conseil Constitutionnel in 1993,14 had long struck him as contrary to France’s Schengen obligations. But to make such a case within the usual constraints – i.e. to challenge a Préfect’s order all the way up to the Cour de Cassation, and only then have the matter referred to the CJEU – would have taken several years of (unpaid) legal work and would have failed to provide the arrested with timely help. On 25 March 2010, however, things suddenly looked different. The organic law introducing the question prioritaire de constitutionnalité (QPC) in the French system had entered into force earlier that month,15 providing a shortcut to EU justice. The Court de Cassation, prompted by lower courts, could now immediately ask the Conseil Constitutionnel whether Art. 78-2(4) would conflict with the rights and freedoms of Mr. Boucq’s clients. On the merits, the 1993 decision of the Conseil concerning that very same provision might have been an obstacle.16 But France had since signed the Treaty of Lisbon, duly referred to in Art. 88-I of the Constitution, and perhaps a QPC could now be based on France’s constitutional obligation to uphold rights and liberties conferred by EU law. Mr. Boucq outlined this strategy in oral argument, and his clever performance managed to persuade Judge Elizabeth Pierru: Melki’s case was transferred to Paris immediately, with a request that the Cour de Cassation send a QPC to the Conseil Constitutionnel.17

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Décision n 93-323 DC du 05 août 1993, Journal officiel du 7 août 1993, p. 11193; Recueil, p. 213. 16 On 1 March 2010. Richards, supra n. 5. Supra n. 14. Tribunal de Grande Instance de Lille, Juge des Libertés e de la Détention, No. 10/00422, March 25, 2010 (on file with authors).

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The rest of the judicial story has already been amply discussed in legal literature and need not be covered here at length. It may suffice to recall that on 16 April 2010, the Cour de Cassation, whose president, Mr. Lamanda, had previously been critical of the QPC reform,18 opted not to contact the Conseil Constitutionnel. Instead, it sent a two-pronged preliminary reference to the CJEU. One prong had to do with a possible conflict between EU law and Art. 78-2(4) of the French Code of Criminal Procedure (along the lines of Mr. Boucq’s theory); the other prong questioned the EU legality of the new organic law, positing that the procedural constraints of the QPC would interfere with French courts’ obligations under TFEU Art. 267. It is on the prong concerning the organic law that legal scholars have spent much time and ink, and for good reason. The highest French courts engaged in a veritable crossfire, each putting forth a reading of the reform that would affirm their traditional sphere of influence.19 The CJEU, in turn, explained under which terms the organic law would remain compatible with supranational judicial duties, and reemphasized the primacy of the preliminary reference procedure over domestic constitutional process while at the same time affirming the compatibility of the French reform with EU law.20 The result was a chorus of different voices, deemed harmonious by some and dissonant by others, but definitely loud and theatrical.21 Silenced and overshadowed by such dramatic pronouncements, the journey of Melki and Abdeli went unnoticed. Back in Lille, on 25 March 2010, the Juge des Libertés had affirmed the Préfect’s order of detention only up to fifteen days (i.e. through 9 April 2010). This means that long before the Cassation or the CJEU could say anything about their fate, the two Algerians had undoubtedly regained their freedom. Mr. Boucq, however, was careful not to inquire about their situation because, had he known for certain that his clients had been released, the proceedings would have lost urgency and his strategy for representation would have collapsed. When asked about them, he

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19 Lamanda Report cited in C. Richards, supra n. 5. See Dyevre, supra n. 10. The CJEU made it clear that the QPC was not necessarily in conflict with supranational law, in so far as it would not interfere with all domestic courts’ prerogative to send references to Luxembourg and to disapply, if necessary, domestic law. See esp. paras. 52–57 of the judgment. See, critically, Roberto Mastroianni, La Corte di giustizia ed il controllo di costituzionalità: Simmenthal revisited, 4 Giustizia Costituzionale 387 (2014) (noting that the CJEU, in Melki and also in A v B and Others, Case C-112/13 (2014), reduced the once absolute primacy of EU law over national constitutional arrangements). On the musical analogy, see Richards, supra n. 5, borrowing an image used by M. Maduro in Contrapunctual Law: Europe’s Constitutional Pluralism in Action.

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said – truthfully – that he had no news, and nobody, to his recollection, questioned him further (Boucq, personal communication, 2014). Boucq never saw his clients again. He had devoted countless hours of legal work to the case and never received more than €80 per hearing (one in Lille, two in Paris, one in Luxembourg). The CJEU pronouncement made him happy: as he had predicted, the Luxembourg court found Art. 78-2(4) defective as it did not guarantee that, in practice, police controls would be any different from frontier checks.22 But Boucq would soon be disappointed. Steeped in Parisian quarrels, the Cour de Cassation was only intent on making the point that the Conseil Constitutionnel should not be consulted in this context, and that ordinary courts should remain in charge (alone or with help from Luxembourg) of reviewing French statutes’ conformity with EU law. The Cassation therefore simply stated that the Juge des Libertés could decide for herself, based on the CJEU’s holding, whether anything contrary to EU law had happened to Melki and Abdeli in Départment 59.23 As a result, there was no change for the many migrants in Melki’s shoes other than, perhaps, a reduction in the rates of daily arrests near Lille. Most importantly, the pattern of the arrests and the attitude of the Lille Préfecture remained virtually unchanged (Boucq, personal communication, 2014). Melki had nonetheless paved the way for a particular type of advocacy: invoking EU law before the Cassation to unlock the gates of immigrant detention centres. New points of leverage had also emerged recently. In 2008, for example, the EU enacted the Return Directive,24 providing detained immigrants with a number of procedural guarantees, and in 2011 two pronouncements of the CJEU – concerning, respectively, an Algerian national in Italy25 and an Armenian national in France26 – had set limits on states’ discretion to criminalize illegal entry. The changes in positive law required by the CJEU were less than radical,27 but the impact of EU law was nonetheless significant, especially considering that the European Court of Human Rights had been deferential to state sovereignty on such matters.28 Based on 22 23

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Para. 75 of Melki. “[I]l appartient au juge des libertés et de la détention d’en tirer les conséquences au regard de la régularité de la procédure dont il a été saisi.” Directive 2008/115/EC of 16 December 2008 on common standards and procedures in Member States for returning illegally staying third-country nationals, L 348/101 (published 24 Dec. 2008). C-61/11 PPU, El Dridi, ECR 2011 I-03015. C-329/11, Alexandre Achughbabian v Préfet du Val-de-Marne, 6 Dec. 2011. See, e.g., Rosa Raffaelli, Case Note: The Achubgbabian Case, Impact of the Return Directive on National Criminal Legislation, Diritto Penale Contemporaneo (2012). 22414/93, Chahal v. UK 1996, § 112 (regarding the right to fair trial).

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these EU law developments, in 2012, attorney Patrice Spinosi agreed to represent the association La Cimade, assisting immigrants in custody, before the French Cassation.29 A prominent Parisian lawyer with a strong record of public representation, in 2012 Spinosi argued for a “rupture with the idea that immigrants are delinquent,”30 and the Cour listened.31 The immediate result of these judicial pronouncements was the quick release of many illegally detained Algerians.32 The century-old practice of subjecting immigrants to criminal sanctions33 was finally receiving supranational scrutiny, and new solutions would have to be devised. Later that year Interior Minister Valls was able to implement a more systemic reform, aimed, among other things, at decoupling mere entry sans titre from penal consequences.34 The delicate political equilibrium that made such reforms possible may have found strength in the EU message that Melki and others had recently delivered in Paris.

the plight of the sans papiers The circumstances of Melki’s arrest – by Mr. Boucq’s account, the police’s propensity to stop Maghrebi nationals, as well as the difficulty of obtaining titres de sojour in some Préfectures – are symptoms of broader and deeper tensions between the French establishment and irregular Algerian migrants. Estimates place the number of undocumented immigrants in France at around 400,000,35 with the number of Algerian sans papiers as high as 29

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See Pour la Cour de cassation, le séjour irrégulier ne justifie pas la garde à vue, June 6, 2012, available at www.liberation.fr/societe/2012/06/06/pour-la-cour-de-cassation-le-sejour-irregulierne-justifie-pas-la-garde-a-vue_824042. Id. Avis n 9002 du 5 juin 2012 de la Chambre criminelle, available at www.courdecassation.fr/ jurisprudence_2/chambre_criminelle_578/9002_5_23502.html. See also Cass., civ., 1ère, 5 juillet 2012, arrêt n 959, Le procureur général près la cour d’appel de Rennes c/ X., n 11–30.371. Serge Slama, http://combatsdroitshomme.blog.lemonde.fr/2014/08/27/pour-ses-6-ans-unentretien-sur-cpdh-pour-le-verfassungsblog/, referring to “centaines de libération de sanspapiers”. Clifford Rosenberg, Policing Paris. The Origins of Modern immigration control between the wars (Ithaca and London, 2006), at 4–5. Referring to the late nineteenth century and to the interwar period, Rosenberg writes that “[The French police] applied methods first developed to monitor criminal populations to a group which had done nothing wrong.” The criminalization of illegal entry was formalized with article L. 621-1 du Code de l’entrée et du séjour des étrangers et du droit d’asile, loi-décret du 2 mai 1938 (CESEDA). Loi n 2012-1560 du 31 décembre 2012. Towards the end of 2012, Valls placed the number at approximately 350,000. See Le Parisien, 28.11.2012, Sans-papiers: Valls publie ses nouveaux critères de régularisation, www.leparisien.fr/ politique/nouveaux-criteres-de-regularisation-pour-les-sans-papiers-28-11-2012-2362395.php.

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200,000.36 Algerians and others of Northern African descent are “disproportionately poor and discriminated against” in France.37 The riots of 2005 still reverberate, and France continues to be shaken by ethnically charged murders.38 The 28 November 2012 Circular issued by the French Ministry of the Interior under Manuel Valls opened the door to further legalization of illegal immigrants39 and explicitly encompassed Algerians, adding to the possibilities for regularization contained in the 1968 Franco-Algerian agreement and its amendments.40 However, the application of the Circular to Algerian nationals is entirely discretionary, and sans papiers such as Melki continue to face a difficult struggle. Failure to obtain proper titres de sejour compromises the chances of naturalization even after many years of residence. The children of irregular migrants face high barriers as well. Simply being born in France does not confer French nationality at birth unless one parent was also born there. A child born in France to foreign parents may acquire French citizenship after age sixteen,41 but generally only with a minimum of five years’ continuous residence in France and after proof of assimilation into the French community, among other requirements.42 In the past few years, France has deported record numbers of illegal immigrants. In extreme cases, the European Court of Human Rights has found the return of Algerian nationals residing unlawfully in France to be in violation of Article 3 prohibiting torture and inhuman

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Algerian Taraki Club in Europe, Dec. 4. 2012, Amel Hazourli, 200.000 Algerian Illegal Immigrants Contend to Settle Their Status in France, available at http://tarakiclub.org/?p=909. The Economist, War by Any Other Name, 31 Dec. 2011; Martin Evans, Algeria: France’s Undeclared War 358–69 (2012). See also Miriam Ticktin, Casualties of Care: Immigration and the Politics of Humanitarianism in France (2011). See Scott Sayare and Steven Erlanger, Suspect in France Remains in Standoff with Police, The NY Times, 21 Mar. 2012; Andrew Hussey, Algiers: A City Where France is the Promised Land – and Still the Enemy, The Guardian, 26 Jan. 2103. The Charlie Hebdo massacre was the work of two brothers of Algerian origin, and the perpetrator of the supermarket siege in eastern Paris had a history of affiliation with Algerian terrorism. See Rukmini Callimachi & Andrew Higgins, Video Shows a Paris Gunman Declaring His Loyalty to the Islamic State, N.Y. Times, 11 Jan. 2015. Ministry of the Interior, 28.11.2012, Circular n NOR INTK1229185C. Section 4.1 of the Circular extends the provisions of the Circular to Algerians, whose status is governed by a special Franco-Algerian agreement (Accord bilatéral franco algérien du 27 décembre 1968) and its amendments. Particularly important is the 2001 amendment that extended to Algerians most of the provisions of the 1998 RESEDA Act – Loi relative a l’entrée et au séjour des étrangers en France et au droit d’asile [May 11, 1998 (Loi No. 98-349)], and especially a residency permit category based on family and personal life. Earlier in some cases; see, e.g., French Civil Code, art. 21-11. See generally Maarten P. Vink & Gerard René de Groot, Birthright Citizenship: Trends and Regulation in Europe, EUDO Citizenship Observatory, November 2010.

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or degrading treatment of the European Convention on Human Rights.43 In most situations, however, deportation from France finds no obstacle in supranational law. The plight of Algerian nationals in France is further complicated by the fact that they typically do not qualify for conventional asylum, which applies only to victims of state persecution. Algerians instead tend to fall under a type of subsidiary protection, previously termed “territorial asylum,” granted to refugees persecuted not by their state, but by members of civil society in their country of origin.44 Unsurprisingly, the majority of territorial asylum claimants in France are Algerian.45 French territorial asylum was granted to individuals whose life or liberty was threatened in their home countries or who were exposed to torture and inhumane or degrading treatment.46 The former Minister of the Interior Jean-Pierre Chevènement subsequently noted that this form of asylum should be applied “as an emergency humanitarian measure . . . of limited application . . . largely discretionary . . . for exceptional cases . . . and of limited significance”.47 An amendment also specified that territorial asylum should only be granted “under conditions compatible with the national interest”, further expanding the scope of the French government’s discretion.48 Subsidiary asylum was then communitarised. Directives 2001/95/EC and 2004/83/EC, both implemented in France,49 create minimum duties of subsidiary protection for all member states, but allow for large discretion in the “assessment of facts and circumstances” of individual applications (Art. 4 of Directive 2004/83) and have not demonstrably altered French practices. In sum, the particular division of powers between the EU and Member States in matters of citizenship and migration flows grants France much leeway in its dealings with irregular immigration from Algeria. For some Mediterranean countries the EU has been able to conclude “mobility partnership” agreements.50 Such deals enable regular, visa-based immigration into the EU in exchange for third countries’ pledge to readmit irregular émigrés

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See, e.g., H.R. v. France, Application No 64780/09, judgment of 22 September 2011, final on 22 December 2011; Daoudi v. France, Application No. 19576/08. See Jane Freedman, Immigration and Insecurity in France 61–62 (2004). 46 Id. at 62; Ticktin, supra n. 37, at 120 and 242 n. 24 Loi No. 98-349 of May 11, 1998. National Assembly, December 15, 1997, cited from Ticktin, supra n. 37, at 146. Loi No. 98-349 of May 11, 1998. Article 1 of Act No. 2003-1176 of 10 December 2003, codified in CESEDA, supra n. 33. http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/international-affairs/southernmediterranean/index_en.htm. See Michela Ceccorulli and Nicola Labanca eds., The EU, Migration and the Politics of Administrative Detention (2014).

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upon expulsion from Europe. No EU deal, however, has been reached with Algeria. The supranational points of leverage noted above (prohibition of border controls, Return Directive and limits on criminalization of irregular entry or stay) remain few and are often more significant in principle than in practice. Thick EU background for Melki is to be found, therefore, not so much in EU immigration law, but rather on those aspects of EU law and policy involving Algeria’s overall social, political and economic performance. Whether Mr. Melki could avoid deportation thanks to clever EU lawyering is the obvious issue, but below the surface lie larger questions.

migration and trade asymmetries Algeria provides particularly salient illustrations of the EU’s relations with North Africa, both because of its early participation in the European integration project and in light of present-day tensions.51 In the spirit of this volume, the vicissitudes of Mr. Melki – an irregular Algerian migrant fearing deportation to his birthplace – should be seen as an opportunity to investigate the impact of EU law on the former colonies and territories of its Member States, not through broad theoretical overviews, but rather through textured accounts of meaningful legal episodes. Why is Algeria, in spite of its significant resources, still a source of massive emigration? Why is Mr. Melki’s difficult journey so painfully resonant for many of his fellow nationals, fleeing Algeria’s poverty and unrest? There are, of course, many possible lines of inquiry in response to these questions, but a piece of the puzzle lies – we argue – in the patterns of the EU’s trade policies with its neighbors. Trade, in the context of the EU’s association agreements, is touted as a tool for bettering the economic and political stability of all partners.52 Yet, the persistence of social and economic strife even among trade parties endowed with significant wealth calls into question the overall efficacy of the EU’s policies and deserves, against the background of seasoned theoretical frameworks, closer investigation.53 51

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The Parisian tragedies of January 2015 have brought into the spotlight all that can go wrong in post-colonial societies and called into question the efficacy of a vast array of French, European and more broadly “Western” choices in the Mediterranean region. See, critically, Vishaal Kishore, Ricardo’s Gauntlet, Economic Fiction and the Flawed Case for Free Trade (2014). See e.g. Vassilis Monastiriotis, Dimitris Kallioras & George Petrakos, The Regional Impact of EU Association Agreements: Lessons for the ENP from the CEE Experience 20 (LEQS Discussion Paper Series, Discussion Paper No. 80/2014, 2014). On the questionable effects of the EU’s trade liberalization in Morocco and Tunisia, see Mark Langan, Normative Power

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Mercantile deals may strike readers as an elliptic object of inquiry. Since the 1960s, the emancipation of formerly colonial economies has been deemed too delicate an enterprise to be left to the simple logic of free trade, and has traditionally been framed as a matter of “development cooperation” – a rapidly evolving blend of tariff preferences, financial assistance, and now rule-of-law and democracy-building programs in favour of struggling nations.54 Yet the removal of residual barriers to trade in goods and services continues to be a core aspect of EU activity. In many circles, including the European Commission’s Directorate General for Trade (“DG Trade”), trade liberalization across the Mediterranean has been featured regularly as a goal and is often an established reality. The association agreements linking the EU with North African states all aim at reciprocal market opening as a matter of principle. In an era of generally low trade barriers, such arrangements may seem unremarkable, but they produce, as we shall see, important and at times troubling distributive effects. The following sections explore some of the legal arrangements that govern the economic interaction between the EU and Algeria, with particular regard to their onset at the start of the integration project. The goal is to situate Mr. Melki’s difficult journey within a broader and older EU law story.

the eu’s work on algeria’s predicaments: cooperation and trade Algeria’s Economy Today: An Overview The huge risks and sacrifices that so many Algerian migrants face in Europe give us a sense of the misery they leave behind when they embark on their journey of hope. High rates of unemployment, combined with lack of faith in the ruling class, generate massive emigration fluxes.55 The nature of misery in contemporary Algeria is, however, not obvious. There is a significant

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Europe in the Maghreb: A Moral Economy Perspective on the Deep and Comprehensive Free Trade Agreements (August 15, 2014), available at SSRN: http://ssrn.com/abstract=2487106. To this day foundational for such empirical inquiries is the theoretical framework of Johan Galtung, The Lomé Convention and Neo-Capitalism, 6 African Review 33 (1976). Piet Eeckhout, EU External Relations, 451 (2nd ed. Oxford University Press 2011), p. 451 ff.; Lorand Bartels, The Trade and Development Policy of the European Union, 18 Eur. J. Int’l L. 715 (2007). See David N. Margolis, Egidio Luis Miotti, El Mouhoub Mouhoud and Joel Oudinet, To Have and Have Not: Migration, Remittances, Poverty and Inequality in Algeria, IZA Discussion Paper No. 7747 (Nov. 2013); Vivienne Walt, With Limited Freedoms, Many Algerians Vote with Their Feet, Times Magazine, 18 Feb. 2013.

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discrepancy between the image of a destitute land that migrants eagerly flee and the relatively solid portrait of Algeria that emerges from aggregate data. Algeria is a “middle income” country that has managed, since 2005, to refrain from external borrowing. The extra revenue due to high energy prices in the early 2000s allowed the Algerian government to repay its foreign debt and increase its geopolitical importance. According to a recent economic profile, Algeria has the tenth-largest reserves of natural gas in the world and is the sixthlargest gas exporter. It ranks sixteenth in oil reserves. Strong revenues from hydrocarbon exports have brought Algeria relative macroeconomic stability, with foreign currency reserves approaching $200 billion and a large budget stabilization fund available for tapping. In addition, Algeria’s external debt is extremely low at about 2 per cent of GDP.56 Moreover, the country was notably not shaken by the Arab Spring and has been relatively stable for the past ten years.57 Terrorist attacks, mostly launched by neighbouring countries’ Islamic extremists, periodically wreak havoc and slow down the pace of foreign investment,58 but they remain relatively selfcontained and do not derail the country’s productive life. The point is that the wealth generated by hydrocarbons comes with two significant drawbacks: first, it is concentrated in the hands of the country’s elite or siphoned off to foreign investors, with no immediate benefits for the Algerian poor59; and second, it is excessively dependent on world price fluctuation and is therefore subject to sudden contractions. The country’s economy continues to be plagued by lack of diversification (with hydrocarbons accounting for 95 per cent of Algerian export earnings) and spatial disparity, i.e. abysmal poverty in rural areas and largely disappointing performance of privately owned business. Virtually all sectors of Algeria’s economy, with the exception of oil and gas, still struggle. The cause of such problems lies, from the perspective of developed countries, in the Algerian government’s reluctance to liberalize. Algeria’s patterns of state intervention in the economy, expansive fiscal policy and relatively profligate public spending stand in stark contrast with current recipes for

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Index Mundi, Algeria Economy Profile 2013, www.indexmundi.com/algeria/economy_profile .html. On the Algerian violence of the 1990s, see Luis Martinez & John Entelis, The Algerian Civil War (2000); see also Eleanor Beardsley, Algeria’s Black Decade Still Weighs Heavily, NPR, 25 Apr. 2011. Algeria’s oil and gas. Not so jolly, The Economist, 9 Feb. 2013. See Lama Abu-Odeh, On Law and the Transition to Market: The Case of Egypt, 23 Emory Int’l L. Rev. 351 (2009) (discussing the interplay of market dynamics and rentier state politics in oil-rich economies).

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progress.60 The World Bank’s “Doing Business” report of 2013 ranks Algeria 152nd out of 185 economies, indicating that the Algerian regulatory environment is not hospitable to business, and in particular to small and medium enterprises.61 It is indeed common knowledge that the Algerian government keeps a tight grip on economic activity. President Boumedienne’s large project of nationalization in 1971 has since given way to a more liberal attitude towards private entrepreneurship, but a cautious and cagey attitude towards foreign investment continues to characterize government policies. The Hydrocarbons Law of 2005 was meant to terminate Sonatrach’s monopoly over all hydrocarbonrelated activities, from exploration to transportation, and indeed paved the way for new and transparent bidding processes for international investors. A governmental order of 2006, however, guaranteed a 51 per cent Sonatrach share in all ventures, and introduced additional tax burdens for foreign investors.62 This concentration of power in governmental hands is also said to operate as an obstacle to Algeria’s own private entrepreneurship. The African Development Bank has noted the Algerian government’s insistence on pouring resources into state-owned industries.63 This policy is radically at odds with Europe’s liberalization mantra, both within the energy sector and across the board of economic activities.64 To be sure, there are occasional nods to the fact that Algeria’s timely reduction of foreign debt sheltered the country from the global financial turmoil of 2008,65 but more common is a general condemnation of Algeria’s economic policies, both towards foreign direct investment (FDI) and with regard to domestic enterprises.66 Against this background, has the EU truly contributed to the betterment of the country – to diversifying its economy, to restructuring its productive sectors

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See The World Bank, Algeria Overview, www.worldbank.org/en/country/algeria/overview (last updated 12 Mar. 2014). The World Bank, Doing Business 2014, Economy Profile: Algeria, http://www.doingbusiness .org/~/media/giawb/doing%20business/documents/profiles/country/DZA.pdf. See Omar T. Mohammedi, International Trade and Investment in Algeria: An Overview, 18 Mich. St. J. Int’l L. 375, 386 (2010) (quoting Jean-Michel Meyer, Investissement: l’Algérie impose sa loi, Jeune Afrique, 28 July 2009). African Development Bank Group, People’s Democratic Republic of Algeria: Dialogue Note 2011–2012, 2.4.9 (2011). Statement by IMF Managing Director Christine Lagarde at the Conclusion of her Visit to Algeria, Press Release No. 13/72, 13 Mar. 2013 (pleading for “a new awakening of the private sector” and “[s]tructural reforms to enhance the business climate[.]”). See, e.g., African Development Bank Group, supra n. 63. See, e.g., Telecoms in Algeria: A Lost Generation, The Economist, 26 Oct. 2013.

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or to raising the standards of its rural life? The answer to this question is mixed. As observed, it is common, in Europe and elsewhere, to blame Algeria for its own troubles, but there is room for considering whether EU policies may have, over time, also tied Algeria to the status quo. The following sections set the Melki story in the larger context of EU-Algeria relations and make the point that the EU, while aiming to alleviate the misery that prompts irregular migration, has at times compounded endogenous Algerian problems.

cooperation Ameliorating the economic conditions of the Maghreb, and of Algeria in particular, is a goal dear to the EU polity for reasons that include energy security, the fight against terrorism, humanitarian concerns and immigration control. The Algerian government is a desirable bulwark against terrorism and irregular migration from the heart of Africa. Europe is thus invested in shoring up its strength and enabling its “prosperity and stability.” The onset of a policy of “cooperation” with Algeria was marked by the Cooperation Agreement of 1976 – one in a series of treaties negotiated by the EEC with North African countries. Cooperation evolved in a network of Euro-Mediterranean deals,67 in turn shaped by the broad goals of the European Neighborhood Policy (ENP)68 and most recently equipped with an agile operative instrument (ENI).69 Cooperation is meant as an alternative to the harshness of free trade with developing countries and aims to pursue a series of classical development goals:70 promotion of the rule of law, access to justice and institutional capacity, fight against corruption, environmental management, sustainable development, job creation, promotion of human rights, democracy and gender equality. Toward such goals, the EU promises to lend know-how, 67

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See, e.g., European Commission Press Release, IP/13/753, 30 July 2013, http://europa.eu/rapid/ press-release_IP-13–753_en.htm (outlining the “SPRING” program – Support for Partnership, Reform and Inclusive Growth – to support “economic and political governance in Algeria”). The ENP was established in 2003 with the goal of spreading prosperity and stability in the EU’s post-enlargement neighborhood. It was then differentiated into the Union for the Mediterranean (also known as the 2008 “Barcelona Process”) and the Eastern Partnership (2009). See Richard G. Whitman and Stefan Wolff, Much Ado about Nothing? The European Neighborhood Policy in Context, in The European Neighborhood Policy in Perspective: Context, Implementation and Impact 3 (Richard G. Whitman & Stefan Wolff eds., 2010). Regulation (EU) No 232/2014 of the European Parliament and of the Council of 11 March 2014 establishing a European Neighbourhood Instrument (ENI). See, e.g., Fawaz Yusuf, A Structural Change Analysis of EU-Moroccan Trade Liberalisation and Economic Development between 1995 and 2010, 19 J. N. Afr. Stud. 413 (2014) (questioning, with specific regard to the Maghreb region, the EU’s ability to generate any real economic diversification and enhanced employment opportunities by means of free trade).

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institutional expertise and, of course, money.71 Help, however, comes with strings and is conditioned upon the partner state’s willingness to engage in meaningful structural reforms: reducing the scope of monopolies, protecting intellectual property, cutting red tape and letting the private sector – whether local or foreign – take charge of yet untapped resources.72 The difficulties have been remarkable. According to the 2002 Association Agreement, which replaced and upgraded the 1976 Cooperation Agreement, the full-range implementation and funding of cooperation initiatives required an Action Plan, which was supposed to describe in detail Algeria’s commitments to reform and the EU’s necessary supporting measures. Yet, as of March 2015, no Action Plan has seen the light of day.73 Conditionality has worked well with Algeria’s more palatable and reform-oriented neighbours – most notably Morocco – but not so with Algeria itself.74 Due to its statist tendencies, the Algerian government comes across as the “most awkward” partner75 of the EU amongst North African states. Recently, the Commission has sketched for the Council a proposed Framework Agreement that would allow Algeria to participate in Union programs and receive significant assistance,76 but Algeria seems to be politically “frozen.”77 Thus, the distribution of EU aid in the ENP

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European Commission Memo, ENP Package – Algeria, 27 March 2014, http://europa.eu/rapid/press-release_MEMO-14–219_en.htm. Euro-Mediterranean Agreement establishing an Association between the European Community and its Member States, of the one part, and the People’s Democratic Republic of Algeria, of the other part, 2005 OJ L 265/2 (signed 22 April 2002; entry into force 1 September 2005) (hereinafter “EU-Algeria Association Agreement”), especially Art. 32, 39 and 44. European Commission, External Action Service, SWD (2015) 77 final (25 Mar. 2015) Implementation of the European Neighbourhood Policy Statistics, http://eeas.europa.eu/enp/ pdf/2015/enp-statistics-report-2014_en.pdf (documenting delays in bilateral cooperation). See Nick Whitney and Anthony Dworkin, A Power Audit of EU-North Africa Relations, European Council of Foreign Relations (ECFR), 44 (2012), www.ecfr.eu/page/-/ECFR62_ NAPA_REPORT.pdf. See Federica Bicchi, The Impact of the ENP on EU-North Africa Relations: The Good, the Bad and the Ugly, in Whitman & Wolff, supra n. 64, at 206, 218; Hakim Darbouche, Energising EU-Algerian Relations, 1 Maghreb Center J. 1 (2010). For a general critique of the ENP, see Nathalie Tocci, The Neighbourhood Policy Is Dead: What’s Next for European Foreign Policy Along its Arc of Instability?, IAI 2014. Proposal for a Council decision on the conclusion of the Protocol to the Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Algeria, of the other part, on a Framework Agreement between the European Union and the Republic of Algeria on the general principles for the participation of the Republic of Algeria in Union programmes, COM/2014/ 0384 final – 2014/0195 (NLE). Erwan Lannon, Entry into Force of the New European Neighbourhood Policy and Negotiation of “Deep and Comprehensive” Free Trade Areas: A European Neighbourhood Policy Running at Different Speeds, IEMED Mediterranean Yearbook 2014, 228.

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context sees Algeria at the bottom of the list of recipients.78 The following critique, directed at the ENP overall, captures particularly well the cooperation impasse between the EU and Algeria: [R]ather than offering a clear carrot from the outset, under the ENP the EU requires countries to undertake a variety of reforms, and only once reforms have been implemented will the EU consider offering the possibility of some form of deeper relations.79

The carrot-and-stick game known as conditionality seems to have turned into a chicken-and-egg problem: Algeria and the EU cannot agree on whether structural reform depends on aid or vice versa. The result is gridlock: the EU places even more emphasis on conditionality (“more for more”) and Algeria remains unyielding.

Reluctance Revisited Overall, the EU seems poised to pressure Algeria into opening its markets to competition. For Algeria, however, the fluctuation of prices and the decreased predictability that come from market liberalization are harbingers of serious challenges. A loss of market share is a terrifying prospect for a country whose eggs are in one basket, and Algeria’s economy remains entirely dependent on its hydrocarbon reserves. The reasons for this predicament are not exclusively endogenous. The EU-Algeria 2013 Memorandum of Understanding on strategic energy partnership, for instance, further consolidates the narrow range of Algeria’s productive activities (oil and gas).80 The Memorandum does mention the possibility of cooperation in renewable energy sectors, but a recent attempt to boost solar energy production in Algeria has not proven viable as a result of shrinking budgets in EU Member States, and it is by no means clear that this Memorandum could resurrect the solar energy project.81 Algeria’s mistrust, against this background, does not seem irrational.

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See generally Vicky Reynaert, Explaining EU Aid Allocation in the Mediterranean: A FuzzySet Qualitative Comparative Analysis, 16 Medit. Pol. 405 (2011). Whitman & Wolff, supra n. 68, at 14. European Commission Press Release, President Barroso visits Algeria and signs a memorandum on energy, 7 July 2013, http://ec.europa.eu/commission_2010-2014/president/ news/archives/2013/07/20130707_1_en.htm. The “Desertec Industrial Initiative” project, which held much promise in 2005, envisaged large exports to Europe of solar energy gathered in Algerian deserted areas, with heavy European investment in solar technology. Desertec abandons Sahara solar power export dream, Euractiv, 31 May 2013.

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There are, as well, other explanations for Algeria’s seemingly obstinate and self-defeating posture in the face of EU offers. A closer look at the details of the agreements that have been negotiated reveals another side of the EU-Algeria relations, namely trade in goods, which receives less attention than cooperation, and yet is particularly revealing of endemic and historically charged imbalances of power. There is, in the EU’s proffered trade deals, a growing insistence on parity of trade terms that is at odds with the rhetoric of cooperation and is instead cast in a neo-liberal frame. The website of the Commission’s DG Trade informs the public that, as of 2014, Algeria no longer benefits from the EU’s Generalized System of Preferences (GSP), because its Free Trade Agreement (FTA) with the EU is finally coming to fruition.82 For countries like Algeria, whose citizens still hold vivid memories of colonial times, the ongoing transition from differential regimes to fully reciprocal FTAs could represent modernity and emancipation. There is much energy and dignity in such developments, and the tone of the DG Trade’s announcement is accordingly upbeat.83 EU trade policies vis-à-vis Algeria, however, have a less than stellar record in terms of effectiveness, and are worth exploring in some detail towards the goal of understanding why the relation between the EU and Algeria, half a century after the Evian Accords, retains structural dependence features. Wine and the Origin of EEC-Algeria Trade The bloodiest time in French-Algerian history – the Algerian war of independence – coincided with Algeria’s entry into the EEC, not as a Member State but as an integral part of France.84 European inclusion was short-lived: as a result of the Evian Accords of 1962, Algeria was excised from the Community, and many Algerian-born persons, having enjoyed French nationality, returned to third-country national status.85 The same happened to goods. Algerian wine, for instance, initially treated as French for custom purposes, suddenly became a third-country product. This story illustrates the possibly negative 82

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European Commission, Directorate General for Trade, Countries and Regions: Algeria, http:// ec.europa.eu/trade/policy/countries-and-regions/countries/algeria/ (last visited 15 December 2014). Theoretical underpinnings for the EU’s liberal trade aspirations were articulated by, among others, Béla A. Balassa, The Importance of Trade for Developing Countries, in New Directions in the World Economy 3 (Béla A. Balassa ed., 1989). Kalypso Nicolaïdis, Southern Barbarians? A post-colonial critique of EUniversalism, in Echoes of Empire: Memory, Identity and Colonial Legacies 247 (Kalypso Nicolaïdis, Berny Sèbe & Gabrielle Maas eds., 2014). One such person was Mr. Belbouab, whose German pension was endangered by this de jure loss of French nationality. Case 10/78 Belbouab v. Bundesknappschaft [1978] ECR 1915.

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externalities of EU market integration and casts EU policies towards Algeria in a less than glowing light. The wine industry had been born on Algerian soil in the 1870s, following an epidemic of phylloxera in France. Vine farmers had relocated en masse to in Algeria, carrying with them sophisticated wine-making technologies – most importantly refrigeration systems – and taking advantage of native farmers as cheap labour. Imports from Algeria ensured adequate wine supply in France in times of scarcity, but even when production resumed abundant inside the Hexagon, the Pieds Noirs kept a steady market share in France. By the 1950s, Algeria had become the largest exporter of wine in the world.86 For religious and political reasons, there was no consumption of wine amongst Algerians, and France was its only market.87 The nationalization of Algerian agriculture, declared immediately after independence, led wine producers of French nationality to return home, leaving behind a thriving industry. Algeria relied for a while on a 1964 French commitment to purchase its wine – part of a larger cooperation effort in the aftermath of independence – but France, upon Italy’s insistence, did not honour that deal.88 The Algerian government also sought to maintain, at least de facto, a privileged trade regime with the Community and refused to sign a 1969 cooperation agreement that would hurt its ability to export agricultural products to the EEC.89 But things were inexorably changing. As soon as France lost its ability to erect protectionist barriers against other European wines, imports from Algeria lost their competitive edge.90 An EEC Regulation designed to launch a Common Wine Policy also determined that bottles produced on the Continent could not contain wine of non-EEC origin.91 The onset of European integration resulted in the complete demise of a once profitable stream of commerce.

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Giulia Meloni and Johan Swinnen, The Rise and Fall of the World’s Largest Wine Exporter (and its Institutional Legacy), American Association of Wine Economists Working Paper No. 134 (Feb. 2013), www.wine-economics.org/aawe/wp-content/uploads/2013/02/AAWE_ WP134.pdf. Id. Muriam Haleh Davis, Eurafrica and De Gaulle’s Constantine Plan – Algeria and the European Communities 1958–1962, European University Institute, 30 July 2013, www.eui.eu/ Research/HistoricalArchivesOfEU/News/2013/07–30-EurafricaandDeGaullesConstantinePlan .aspx. Issam Nedjiah, Les relations euro-algériennes de la coopération au partenariat, 10 Domitia 149, 150–51 (2008). Davis, supra n. 88. Council Regulation 816/70, art. 26, 1970 OJ L 99/1 (EC). See Jeffrey A. Munsie, A Brief History of the International Regulation of Wine Production (2002).

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This episode, by now well documented, is a dramatic illustration of the trade-diverting effects of market integration in the EU. It is often the case that the enablement of free trade within a given region of the world upsets pre-existing patterns of commerce in third countries. However, Algeria was no third country when European integration began, and counted on trade continuity after political independence. As time went on, it became increasingly clear that Algeria could no longer rely on privileged commercial ties to Paris, due to the Métropole’s new allegiances and obligations towards the Community’s Member States. In 1978, when the Cooperation Agreement entered into force, Algeria’s economy suffered additional setbacks. With regard to goods, the Cooperation Agreement offered Algeria free access to the EEC market for most of its non-agricultural products, as well as some tariff concessions for its agricultural exports. At the same time, textiles and refined petroleum products from Algeria stopped benefitting from zero rate tariffs. Seasonal restrictions were also imposed upon the import of agricultural products, with “disastrous” consequences for Algerian exports.92 The 1980s’ accession of Greece, Spain and Portugal dealt an additional blow to Algeria’s chance of selling its agricultural goods competitively to EEC customers.93 Trade in Goods Today The free trade agreement referred to by the Commission in the aforementioned web announcement is a section of the 2002 Association Agreement, which laid the groundwork for the effacement of tariffs in EU-Algeria commerce.94 Following the blueprint of the EU’s GSP, the Agreement provided for immediate non-reciprocal concessions: as soon as the Agreement became effective in 2005, the EU dropped the tariffs down to zero on most Algerian imports.95 Algeria, by contrast, was allowed to keep in place temporary custom duties to protect national industries and was given twelve years to phase them out. This lopsided arrangement, gracious enough to require Algeria to open up to Europe with regard to services and foreign investment, was favourable to Algeria only in form. In substance, for several reasons, it was unlikely to stimulate imports. First, the EU grants free-trade privileges to an increasingly 92

93

94

See European Institute for Research on Mediterranean and Euro-Arab Cooperation (MEDEA), EU-Algeria Relations, www.medea.be/en/countries/algeria/eu-algeria-relations (last visited 15 December 2014). It appears that Algerian food exports, including cereal, had doubled in between 1976 and 1986, but then contracted again. See id. 95 EU-Algeria Association Agreement, supra n. 72, Title I. See id. art. 9.

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large number of countries,96 and duty-free access to its market is now the baseline for most competitors – certainly not a coveted prize for the few. Second, some exporting countries have negotiated better terms (i.e. duty-free access for a broader range of products) than Algeria could ever receive, because Algeria does not qualify as a “vulnerable” economy by EU standards.97 Third, and most importantly, duty-free access only benefits those industries whose goods would be competitive in terms of both quality and price in the absence of trade barriers. Many of Algeria’s products, however, are less than competitive, and are not likely to win the hearts and purses of EU consumers even if unencumbered by tariffs. As a result, the asymmetric trade concessions granted by the EU have been less helpful than anticipated. The detailed data on EU-Algerian trade released by the Commission corroborate this sobering assessment.98 Statistical figures track the trend of imports and exports from 2008 to 2012 – well after the entry into force of the Association Agreement – and illustrate very clearly that the EU market is notably not flooded with any of the goods that either farmers or small and medium enterprises in Algeria are likely to produce. Empirical studies show that Algerian exports to the EU in all non-hydrocarbon sectors have not experienced any significant trade creation.99 Imports into the EU from Algeria have grown significantly in the aggregate, but this growth is only due to a spike in imports of “mineral products”.100 Trade in minerals, given the structure and ownership of Algerian natural resources, brings revenue either to the government or – since the partial liberalization of the sector101 – to foreign investment, but not to middle-scale entrepreneurship. With the exception of animal

96

Within the Southern Mediterranean Region, the EU is currently negotiating several Deep and Comprehensive Free Trade Agreements (DCFTA). 97 Algeria does not meet the vulnerability criteria that let other countries receive more favorable treatment (GSP+). Regulation (EU) No 978/2012 of the European Parliament and of the Council establishes eligibility criteria for special incentive arrangement for sustainable development and good governance (GSP+). 2012 OJ L 303/1. 98 European Commission, DG Trade, Algeria: EU Bilateral Trade and Trade with the World, July 5, 2013 (hereinafter “DG Trade: Algeria”). 99 See Mohamed Y. Haddoud, Keith Salmon, Paul Jones & Robert Newbery, The Impact of Regional Trade Agreements on North African Countries’ Foreign Trade and Economic Welfare, Evidence from Algeria and the European Union Association Agreement, www .regionalstudies.org/uploads/HADDOUD_RSA_FINAL_COPY.pdf (“[T]rade creation occurred mainly in imports rather than exports . . . . [A]lthough the regional membership may create trade for North African countries, it may not be sufficient to overcome export issues[.]”) 100 The value of imports of mineral products went from €20,080 million in 2008 to €31,968 million in 2012. DG Trade: Algeria, supra n. 98. 101 Encyclopedia of the Nations, Algeria, www.nationsencyclopedia.com/economies/Africa/ Algeria.html (last visited 24 Aug. 2014) (hereinafter “Encyclopedia”).

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hides and leather, Algeria is a net importer of all manufactured items, agricultural products and textiles. Algerian textiles, in particular, are no longer to be found on the list of exports to the EU.102 Textiles are an important part of Algeria’s traditional economy and also a staple of small and medium enterprises, but the textile sector finds no reward in the EU market.103 In parallel, the ongoing dismantlement of Algerian custom duties has resulted in a significant boost to EU exports, which reduce the consumption of domestic goods, and in a loss of custom revenues for the state. For these reasons, in 2012 the Algerian government was given a longer time to implement the total phase-out, now postponed until 2020.104 In sum, the duty-free access to the EU market has not managed to alter the export patterns of Algeria. The EU’s trade policy is not (yet) conducive to Algeria’s market diversification, and therefore does not leverage goods markets as tools to relieve Algeria’s socio-economic disparity.

conclusion This chapter has aimed to place Melki in its broader context. It has first outlined Mr. Melki’s irregular entry into France and the clever representation strategy devised by his counsel on the basis of EU law. Next, it has explored the plight of many Algerian sans papiers living in France and observed the (feeble) impact of EU law on their immediate predicaments. It has then broadened the inquiry to encompass multiple levels of EU-based intervention on the social, economic and political reality of Algeria, starting with cooperation measures within the European Neighborhood Policy and continuing with trade policies in the goods sector. It has then sketched one particular episode – the collapse of Algerian wine trade – that illustrates both the longterm damage of colonialism and the possible negative effects of European integration on its neighborhood. In several cases, the opening of markets has not worked towards diversification, but rather against it. Wine in the 1960s, textiles in the 1980s and most recently clean energy initiatives have provided illustrations of a recurrent pattern – one in which both local initiative and 102

103 104

The value of Algerian textiles exported to the EU, expressed in millions of Euros, was 1 in 2008–09 and has been 0 since 2012. DG Trade: Algeria, supra n. 98. Encyclopedia, supra n. 101. Ulrika Lomas, Algeria delays implementation of FTA with EU, TaxNews, 4 Sept. 2012 (reporting that, according to Algerian trade minister Mustapha Benbada, “the existing association agreement with the EU cost Algeria USD2.5m in lost customs duties between 2005 and 2009, while investments from the EU have not been as strong as initially anticipated. At the same time, Algerian imports from the EU have increased dramatically.”)

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foreign investment fail to prompt diversification and rather ossify entrenched economic structures.105 Recalling Johan Galtung’s analysis, we might still discern here a “bridgehead which the center of the Center nation establishes with the center of the Periphery nation,” leaving behind the latter’s rural and urban poor.106 Both the political economy of Algeria and its deals with the EU have significantly evolved over time, but the earlier setbacks of trade diversion cast long shadows on the cooperation policies implemented by the EU in recent years. The journey of Mr. Melki connects Algeria, physically and metaphorically, with the EU – a regional entity that aims to set aside colonial history,107 and yet at times rewrites it.

105 107

Langan, supra n. 53. Nicolaïdis, supra n. 84.

106

Johan Galtung, A Structural Theory of Imperialism, Oslo 1971.

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27 Of ‘One Shotters’ and ‘Repeat Hitters’ A Retrospective on the Role of the European Parliament in the EU-US PNR Litigation

elaine fahey

introduction The EU-US Passenger Name Records (PNR) Agreement decision of the European Court of Justice (hereafter EU-US PNR)1 remains a famously sour memory for many. It is universally depicted in legal scholarship as a so-called ‘Pyrrhic’ victory.2 It was a victory that was secured first and foremost by the European Parliament (EP), which sought to strike down an agreement that was perceived to harbor adverse effects for EU citizens’ rights. It is a notorious decision precisely because the European Court of Justice granted in few words an ostensible victory to the EP in a hollow and technical judgment. The decision is also notable for the failure of the Court of Justice to deliver any fundamental rights analysis on a highly controversial Agreement that had many repercussions for the civil liberties of EU citizens. It is even more infamous for its political aftermath, where the decision is perceived as having generated an even worse agreement subsequently than that originally entered into with the United States.

1

2

Joined Cases C-317/04 and C-318/04, European Parliament v Council and Commission [2006] ECR I-4721. Derived from the Greek Pyrrikos after a remark attributed by Plutarch to Pyrrhus, who declared, after a great victory over the Romans, that another similar victory would ruin him. See G. Gilmore and J. Rijpma, ‘Annotation of Joined Cases C-317/04 and C-318/04, European Parliament v. Council and Commission’ (2007) 44 Common Market Law Review 1081, at 1081 (‘Rjipma and Gilmore’); M. Mendez, ‘Passenger Name Record agreement European Court of Justice - Annulment of Commission Adequacy Decision and Council Decision Concerning Conclusion of Passenger Name Record Agreement with US Grand Chamber Judgment of 30 May 2006, joined cases C-317/04 and C-318/04, European Parliament v. Council and Commission’ (2007) 3 European Constitutional Law Review 127. For a vast selection of the commentaries available on the case, see http://curia.europa.eu/juris/ celex.jsf?celex=62004CJ0317&lang1=en&type=NOT&ancre=.

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The litigation took place at a juncture immediately after which the EP gained considerable powers. The EP does not yet litigate frequently but has an increasing portfolio of powers, particularly in foreign affairs. As explored here, after the recent revelations of the mass surveillance activities of the National Security Agency (NSA), the EP has held a high-profile inquiry investigating NSA activities, has sought to suspend all EU-US security agreements and has sought to focus on the salience of civil liberties and the public interest in the TTIP negotiations. The EP has thus increasingly been leveraging political weight increasingly over civil liberties in transatlantic relations. However, litigation by the EP remains a rare act in this newer context. Of note is that, the EU-US PNR decision aside, subsequent litigation by parliamentarians as to EU-US relations has been largely conducted individually and less so collectively. This remains an understudied story in scholarship that is focused upon here. The work of Marc Galanter on defining and comprehending parties to litigation is one of the cited pieces of law and society scholarship of all time.3 His work is used here as a backdrop to examine the practices of both the EP and its individual members qua litigators within a particular context. Galanter defined those who engaged in regular and sustained litigation as ‘repeat players’, whereas those who litigated on a once-off basis or with considerably less frequency as ‘one-shooters’. Galanter, after examining US litigation practices over an extended period of time, discovered that ‘repeat players’ were generally wealthy institutions with advance intelligence and the ability to employ the system to become an ‘insider.’ More fundamentally, repeat players had an ability to both manipulate and develop rules. ‘One-shooters’, by contrast, tended to be individuals with few resources, who tended to litigate for immediate outcomes.4 Galanter’s theorization predates many developments in the evolution of the EU legal order. However, it is argued to provide both a useful and possibly insightful lens through which to understand the nature and effects of the judicial process, even outside of the US context in an evolving supranational legal order. This chapter argues that Galanter’s work provides a model of some value for those considering litigation by actors in a changing institutional landscape, 3

4

See Fred R.F Shapiro and Michelle Pearse, ‘The Most-Cited Law Review Articles of All Time’ 110 (2012) 110 Michigan. L.aw Rev.iew 1483, table 1, number 37. Galanter also distinguished between the ‘special’ and ‘general’ effects of litigation. In this regard, he sought to distinguish between the effects produced by the impact of litigation, e.g. full-blown effects, attenuated or threatened and the general effects of litigation, including its communication and the responses to that information. See M. Galanter, ‘Why the haves come out ahead: Speculation on the limits of legal change’ 9 (1974) Law and Society Review 95.

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where the relationship between the two types of actors is possibly instructive and revealing of the history and evolution thereof, as to knowledge, power and political strategy through law. It does so by considering the place of individual versus collective litigation initiated in the public interest in the area of security as a story of salience for contemporary EU law.5 It draws in particular upon the story of one individual parliamentarian, Sophie In ‘t Veld, MEP, member of the EP Civil Liberties Committee, who has been litigating civil liberties issues in EU-US security agreements with much frequency in the public interest, unsupported by the EP en masse.6 At the time of writing, litigation is pending taken by an Austrian law student against the Irish Data Protection Commission concerning the social network Facebook and the application of the EUUS Safe Harbor Agreements. It has the capacity to alter the question of the public interest here and the account can only speculate as to its possible impact.7 A retrospective analysis of EU-US PNR litigation involves reflecting upon the legal and political context prevailing at the time of the litigation (as to judicial review and foreign affairs) and its evolution. This retrospective also considers the actions of a ‘one-shooter’ EP parliamentarian (i.e. one MEP) litigating with such frequency so as to be seen to wear ‘repeat hitters’ clothing. This story is argued here to be of relevance to the analysis of the shifting public interest in transatlantic security. This account develops and re-envisages this story as a retrospective and takes as a starting point in the first section how the powers of the EP are understood in foreign affairs and EU-US relations. In the second section, the account reexamines what the Court decided in EU-US PNR and its effects, followed in the third section by the account of the proceedings that the author has

5

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7

See generally E. Fahey, ‘Law and Governance as checks and balances in Transatlantic Security’ (2013) 32 Yearbook of European Law 1–21. See also E. Fahey and D. Curtin (eds.), A Transatlantic Community of Law: Legal Perspectives on the Relationship between the EU and US legal orders (Cambridge: Cambridge University Press, 2014). See also the chapter of Morijn in this volume. See Case T-529/09, In ‘t Veld v. Council [2012] ECR II-000; T-301/10, In’t Veld v. European Commission [2013] ECR II-000; Case C-350/12 P, Council v. in’t Veld [2014] ECR I-000. In’t Veld is a member of the European Parliament committee for Civil Liberties, Justice and Home Affairs, a member of the Transatlantic Legislators Dialogue and was a member of the committee investigating the CIA renditions and black sites in the last EP of 2009–14. She has been a member of the parliamentary inquiry into mass surveillance by the NSA, and programmes like Prism and Tempora and rapporteur for the evaluation of EU counterterrorism policies and for the international agreements for the exchange of Passenger Name Records. She has been involved in the discussions on the so-called ‘SWIFT’ agreement on the transfer of bank data, as well as the Anti-Counterfeiting Trade Agreement (ACTA) and the current review of the EU Data Protection framework. Case C-362/14, Schrems v Data Protection Commissioner, pending.

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uncovered through interviewing participants in the litigation, and considers also the actions of In ‘t Veld. The fourth section reflects upon how the story will unfold, taking into account future developments in the area and what might be termed here as the ‘bigger picture’ of law and politics in the surveillance era.

the institutional backdrop to the eu-us pnr litigation The EP and Foreign Affairs: Law and Practice The history of the powers of the EP in the EU legal order is one of the modest empowerment steps, expanded gradually, and only sometimes through judicial review. Historically, the EP has used its legislative ‘consent’ powers as delay powers that have evolved through the treaties into more substantive legal powers.8 More recently, its veto power generates lesser litigation, least of all as to foreign affairs. In the Les Verts decision of the Court of Justice, the European Parliament won significant locus standi rights in proceedings taken by it. The EP there generated one of the most significant examples of ‘judicial activism’ in EU law. The EP subsequently benefitted from this litigation by means of the altered wording of what is now Article 263 TFEU.9 Nevertheless, the evolution of its powers thereafter was not necessarily so far-reaching over successive Treaty reforms. Prior to the Treaty of Lisbon, repeated calls for an enhancement of parliamentary involvement in EU foreign affairs had largely ‘fallen on deaf ears’.10 Any powers of involvement in negotiations for the EU were couched in soft law agreements or rules of procedure.11 Yet, overall, some assert that the EP enjoyed, even pre-Lisbon, more comparative autonomy than the US Congress.12 8

9

10

11

12

See R. Kardasheva, ‘The Power to Delay: The European Parliament’s Influence in the Consultation Procedure’ 47 (2009) Journal of Common Market Studies 385, 399. Case 294/83 Parti écologiste ‘Les Verts’ v. European Parliament [1986] ECR 1339. See A Alemanno ‘What Has Been, and What Could Be Thirty Yeats after Les Verts/European Parliament: Individual Access to EU Justice’ in M. Maduro and L. Azoulai (eds.) The Past and Future of EU Law – The Classics of EU Law Revisited on the 50th Anniversary of the Rome Treaty (Oxford: Hart Publishing, 2008) pp. 324–32. D. Thym, ‘Parliamentary Involvement in European International Relations’ in M. Cremona and B. De Witte (eds.), EU Foreign Relations Law: Constitutional Foundations (Oxford: Hart Publishing, 2008) pp. 201–31. For example, so-called Lun 1, Westerterp expansion and the Stuttgart Declarations, which provided scope for its participation therein: ibid, pp. 204–05. See also K. Raube ‘Parliament Approaches: Parliament Control in EU Foreign Policy’ in M. Wilga and I. P. Karolewska (eds.) New Approaches to EU Foreign Policy (Abingdon: Routledge, 2014), 125. Ibid, p. 210.

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Post-Lisbon, the EP has powers of consent to approve international agreements in a wide variety of circumstances, pursuant to Article 218(6)(a) TFEU.13 Currently, the foreign affairs powers of the EP in the treaties may be viewed as ostensibly modest, largely limited to information and veto rights. Nevertheless, many argue that the EP may factually veto international agreements.14 Any ‘modesty’ in formal powers is heavily supplemented by interinstitutional agreements to take ‘due account’ of their comments during negotiations. Pursuant to the Inter-Institutional Framework Agreement, the Commission shall take due account of the Parliament’s comments throughout the negotiations.15 The EP thus possesses a right of veto as to international agreements, which is linked to information at all stages: pre-negotiations, during negotiations and after conclusion beyond rights given traditionally in Common Foreign and Security Policy.16 The European Parliament is still excluded from the critical stage of the opening of negotiations on external relations agreements. Pursuant to Article 218(3) TFEU, the Council shall authorize the opening of international relations negotiations, adopt negotiating directives and may authorize the signing and conclusion of agreements. While this process excludes the European Parliament,17 the Council is not primus inter pares with the Parliament, but instead is primus in relation to the negotiation of international agreements.18 This state of affairs reflects an uneven constellation of constitutional powers in the EU.19 While the extensive external relations powers of executive actors postLisbon contrasts still with those of the EP, the EP is perceived to constantly try to enhance its powers to achieve parity with other institutional actors.20 The EP has been regularly participating in a Transatlantic Legislators Dialogue with the US Congress for several decades, a joint committee 13 14

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16 17

18

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20

See Treaty of the Functioning of the European Union (TFEU) art. 218(6)(a)(v). E.g. see D. Curtin, ‘Official Secrets and the Negotiation of International Agreements: is the EU Executive Unbound?’ (2013) 50 Common Market Law Review 423; A. Ripoll Servent ‘The Role of the European Parliament in International Negotiations after Lisbon’ (2014) 21 Journal of European Public Policy 568. See Framework Agreement on Relations between the European Parliament and Commission, Annex III. See Thym, above n. 10. See P. Eeckhout, External Relations of the European Union (Oxford: Oxford University Press, 2011), p. 199. See M. Cremona, ‘Guest Editorial: Negotiating the Transatlantic Trade and Investment Partnership (TTIP)’ (2015) 52 Common Market Law Review 351–62. D. Curtin and I. Dekker ‘The European Union from Maastricht to Lisbon: Institutional and Legal unity out of the shadows’ in P Craig and G de Búrca (eds.), The Evolution of EU law (2nd ed., Oxford University Press, 2011) pp. 155–86. See Curtin, n. 14.

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composed of members of the European Parliament and members of US Congress, arguably with very limited output and effects.21 However, the impact and legal effects of this soft diplomacy appears to be shifting in recent times against the backdrop of enhanced powers for the EP or a thirst therefore. Some have suggested that there are limits to the Parliament’s empowerment in foreign affairs and EU-US relations, relying upon the acceptance by the Parliament of the latest EU-US Passenger Name Records Agreement (PNR) despite its shortcomings in the area of civil liberties.22 Nevertheless, its rejection of the TFTP (Swift) Agreement and the Anti-Counterfeiting Trade Agreement (ACTA) on the grounds of inadequacy of information rights are of significance.23 The Ombudsman has sought to apply transparency to the transfer of data under the EU-US (Swift) Agreement and to the Transatlantic Trade and Investment Partnership (TTIP) negotiations through an inquiry pursuant to her function that might not have previously been understood to capture foreign relations with such significance.24 Her actions appear to often emphasize the public interest with reference to the EP and show a stronger citizen-centric public interest dynamic emerging in EU foreign affairs. The era of the TTIP and the NSA surveillance saga has seen the EP acquire more input into the normative agenda of negotiations between the EU and US and foreign affairs more broadly.25 21

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23

24

25

See D. Jancic, ‘The European Parliament and EU-US Relations: Revamping Institutional Cooperation?’ in Fahey and Curtin, ‘A Transatlantic Community of Law’ (n. 5). See A. Ripoll Servent and A. MacKenzie, ‘The European Parliament as Norm Taker? EU-US Relations After the SWIFT Agreement’ (2012) 17 European Foreign Affairs Review 71–86. Agreement between the European Union and the United States of America on the processing and Transfer of Financial Messaging Data from the European Union to the United States for the purposes of the Terrorist Finance Tracking Program, OJ 2010 No. L195, 27 July 2010. European Parliament, first reading, (EP-PE_TC1-COD(2005)0127), European Parliament resolution of 24 November 2010 on the Anti-Counterfeiting Trade Agreement (ACTA) (P7_TA (2010)0432). See Council Decision on the conclusion of the Anti-Counterfeiting Trade Agreement (ACTA) between the European Union and its Member States, Australia, Canada, Japan, the Republic of Korea, the United Mexican States, the Kingdom of Morocco, New Zealand, the Republic of Singapore, the Swiss Confederation and the United States of America, No. 12195/11, 23 August 2011. See C. Eckes, E. Fahey and M. Kanetake, ‘International, European and US Perspectives on the Negotiation and Adoption of the Anti-Counterfeiting Trade Agreement (ACTA)’, (2012) Currents, XX(2) 20. See Curtin, n. 14 above. Transparency of the Transatlantic Trade and Investment Partnership, Decision of 6 January 2015, www.ombudsman.europa.eu/en/cases/summary.faces/en/58670/html.bookmark; followup of European Commission and the reply of the Ombudsman, www.ombudsman.europa.eu/ cases/correspondence.faces/en/59898/html.bookmark; decision of 2 September 2014, www.ombudsman.europa.eu/en/cases/decision.faces/en/54678/html.bookmark European Parliament Resolution of 23 October 2013 on the suspension of the TFTP agreement as a result of US National Security Agency (NSA) surveillance (2013/2831 (RSP)). The EP is set to pass a resolution on TTIP at the time of writing, taking into account a Citizens Rights

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The EP as Litigator For the purposes of the present account, reflecting upon the EP’s role in the PNR litigation involves consideration of its role as a litigator within the history of EU. From a historical and empirical perspective, the EP is not a repeat player or frequent litigator. It takes approximately ten cases a year, according to officials interviewed by the author from its Legal Service. The advent of codecision as the default or ordinary legislative procedure in EU law-making has rendered the EP and Council as co-litigators, and arguably should reduce the incentive for the EP to litigate to defend its prerogatives. It also operates to complicate analysis as the EP and Council are jointly sued in many cases, and when one of them is sued, it raises the likelihood that the other is joined in the proceedings. Nonetheless, as a very general proposition, the EP is not found as a frequent ‘first-place’ plaintiff or litigator in many proceedings.26 For example, between 1985 and 1990, shortly after the inception of the Single European Act and the advent of gradual legislative empowerment and institutional autonomy, there were only four cases initiated by it alone.27 Additionally, the research of the author indicates that the EP is first-named plaintiff qua litigator (alone) in fifteen cases since the Treaty of Lisbon, the most recent being an opinion on the legal validity of the EU-Canada PNR Agreement.28

26

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Initiative ‘STOP TTIP’. See F. Nicol ‘The Politicization of Legal Expertise in TTIP’ (forthcoming). See also C. Eckes, ‘How the EP’s Participation in International Relations Affects the Deep Tissue of EU Power Structures (12/ 2014) Jean Monnet Working Papers. The role of dialogues in EU-US relations (e.g. Transatlantic Business Dialogues) is outside the scope of the present paper; see further Fahey in Fahey and Curtin (n. 5). I.e. pursuant to Article 263 TFEU, which provides for the grounds upon which judicial review in the EU legal order may take place, whereby the Court of Justice may declare the acts concerned to be void. It specifically provides who has grounds for standing before the Court of Justice. On a search of Eur-lex and Curia Databases, searching for ‘Parliament’ alone: Case T-42/89, Parliament v Yorck von Wartenburg [1990] ECR II-00025; Case C-377/87, Parliament v Council [Case closed] [1988] ECR 4017]; C-302/87, Parliament v Council (‘Comitology’) [Case closed, [1988] ECR 5615]; Case 13/83, Parliament v Council (‘Transport’) [Case closed] [1985] ECR 1513]. See Case C-566/08, Parliament v Council (removed from the register [2010] OJ C234/30); Case C-130/10, Parliament v Council [Case closed] ECLI:EU:C:2012:472; Case C-355/10, Parliament v Council [Case closed] ECLI:EU:C:2012:516; Case C-490/10, Parliament v Council [Case closed], ECLI:EU:C:2012:525; Case C-658/11, Parliament v Council [Case closed]; C-103/12, Parliament v Council [Case closed] ECLI:EU:C:2014:2400; Case C-402/12 P, Parliament v Vereniging Milieudefensie and Stichting Stop Luchtverontreiniging Utrecht [Case closed] ECLI:EU:C:2015:4; Case C-65/13, Parliament v Commission [Case closed] ECLI:EU: C:2014:2289; Case C-124/13, Parliament v Council [Case in progress]; Case C-317/13, Parliament v Council [Case closed] ECLI:EU:C:2015:223; Case C-540/13, Parliament v Council [Case in progress]; Case C-679/13, Parliament v Council [Case in progress]; Case

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Further, from the time of the institution of the EU-US PNR litigation or shortly before it up until the Treaty of Lisbon, there were approximately fourteen cases taken by the EP.29 Whatever the precise calculation of its total impact or effects, it still pales in comparison with other institutional actors in terms of litigation and is evidently a one-shooter in strict terms.30 It has not supported In ‘t Veld in her litigation discussed in the third section of this chapter. It is worth noting that in the recent and ongoing leading civil liberties cases on the Data Retention Directive, the Google ‘The Right to be Forgotten’ case and the latest Safe Harbour/ Facebook challenge, the EP only intervened in the latter, and instead civil liberties bodies have taken a more active role.31 Briefly, it is worth recalling the types of judicial review mechanisms in the area of foreign affairs, prior to considering the EU-US PNR decision itself.

Judicial Review and EU Foreign Affairs The EU-US PNR decision remains a highly prominent example of ex post facto judicial review, where ex ante review did not materialize. Ex post review of international agreements has occurred on several occasions, proving that they are not immune from core values of EU law.32 It is useful to consider the difference between the two forms of procedure prior to assessing the actual case itself. Any EU institution or Member State is entitled to challenge the constitutionality of a draft international agreement prior to its conclusion

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C-48/14, Parliament v Council [Case closed] ECLI:EU:C:2015:91; Opinion 1/15 [Case in progress]. Case C-436/03, Parliament v Council [2006] ECR I-3733; Case C-540/03, Parliament v Council [2006] ECR I-5769; Case C-548/03, Parliament v Council (Removed from the register on 16 December 2004); Case C-317/04, Parliament v Council (Order of 17 March 2005) [2006] ECR I-2457; Case C-318/04, Parliament v Commission [2006] ECR I-2467; Case C-413/04, Parliament v Council [2006] ECR I-11221; Case C-403/05, Parliament v Commission [2007] ECR I-9045; Case C-133/06, Parliament v Council [2008] ECR I-3189; Case C-155/07, Parliament v Council [2008] ECR I-8103; Case C-166/07, Parliament v Council [2009] ECR I7135; Case C-474/07, Parliament v Commission (Removed from the register on 17 December 2008); Joined Cases C-512/07 P(R), C-15/08 P(R)), C-15/08 P(R), Ochetto and European Parliament v Donnici [2009] ECR I-0000. This account does not explore the empirics of this on the grounds of space and the limits of the present research question, but at a cursory glance, a search of the curia.eu website appears to be self-evident as a proposition. Notably, a small number of civil liberties organisations acted as amicus curiae in the Data Retention and Facebook litigation: Cases C-293/12 and C-594/12, Digital Rights Ireland and Seitlinger and Others [2014] ECR I-000. Case C-362/14, Schrems v. Data Protection Commissioner; Case C-131/12, Google Spain SL v. Gonzalez [2014] ECR-000. See M. Mendez The Legal Effects of EU Agreements (Oxford: Oxford University Press, 2013), pp. 288–89.

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through ex ante review. Such a procedure accords power across a range of institutions by providing, pursuant to Article 218(11) TFEU, that EU institutional actors may seek an opinion of the Court on the compatibility of an international agreement with the treaties ex ante. Many interviewees of the current author indicated the challenge of mustering appropriate numbers within the EP to seek an Opinion of the Court of Justice. Yet, paradoxically, history indicates that ex post facto litigation by way of the annulment procedure has proven to be more viable despite the ostensible political benefits of ex ante review. Ex ante power to review such agreements grants the Court of Justice powers that many national courts lack in foreign affairs. It is rooted in a traditional or conventional understanding of the operation of international law, whereby legal certainty often precludes ex post facto review, which would be contrary to the contracting parties agreement. The Court delivered sixteen opinions on the compatibility of international agreements with the treaties at the last count, not all of which may be said to constitute the leading decisions of EU law.33 In the last decade there were two opinions in 2000, one in 2003, one in 2008, one in 2009 and one in 2014, so the period under discussion of the EU-US PNR Agreement represents a distinctive ‘lapse’ in this period.34 Looking more broadly at its use since the 1970s, its use often coincides with major Treaty changes. However, the practical results between either procedures may not necessarily be so vast, yet warrant analysis further below, after the details of the EU-US PNR decision are considered. There, political turmoil resulted from the EP’s request for ex ante review being rendered moot by an EU-US PNR Agreement being reached, discussed in more detail next. This chapter thus turns to the legal backdrop of the PNR litigation and provides a concise overview of the legal mechanisms through which the case arose and its findings.

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R. Schütze, European Constitutional Law (Cambridge: Cambridge University Press, 2012), p. 209. The fifteen opinions are: Opinion 1/75 (Local Cost Standard), [1975] ECR 1355; Opinion 1/76 (Laying-Up Fund), [1977] ECR 741; Opinion 1/78 (Natural Rubber Agreement), [1979] ECR 2871; Opinion 1/91 (EEA Draft Agreement), [1991] ECR I-6079; Opinion 2/91 (ILO Convention 170), [1993] ECR I-1061; Opinion 1/92 (EFTA Agreement II), [1992] ECR I-2821; Opinion 2/92 (Third Revised OECD Decision), [1995] ECR I-521; Opinion 1/94 (WTO Agreement) [1994] ECR I-5267; Opinion 2/94 (Accession to ECHR) [1996] ECR I-1759; Opinion 3/94 (Banana Framework Agreement) [1995] ECR I-4577; Opinion 1/00 (European Common Aviation Area), [2002] ECR I-3493; Opinion 2/00 (Cartagena Protocol) [2002] ECR I-9713; Opinion 1/03 (Lugano Convention) [2006] ECR I-1145; Opinion 1/08 (GATS) ([2009] ECR I-11129); Opinion 1/09 (European Patent Court) [2011] ECR I-1137; Opinion 2/13 (Accession to ECHR) [2014] ECR I-000. See Schütze, n 33, 209.

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the eu-us pnr decision of the court of justice and its impact on eu-us pnr agreements The Decision It remains of political and legal relevance that the EU-US PNR Agreement giving rise to the story recounted here has its origins in US legislation passed in the wake of the 9/11 atrocities, requiring airline carriers to provide US authorities with passenger data under threat of sanction. The US Aviation and Transportation Security Act of 2001 required all airlines flying into the United States to supply PNR data to the US Customs and Border Control (CBP), operating within the US Department of Homeland Security (DHS). Such an obligation did not appear compatible with EU law, given that Article 25 of the Data Protection Directive provided that personal information originating from within Member States may be transferred to a third country only if that country ‘ensures an adequate level of protection’.35 Thus, in December 2003, the EU launched negotiations with the United States on an Agreement concerning the transfer of PNR data, and a draft Agreement was reached in 2004.36 Thereafter, the US CBP provided undertakings as to the use of the PNR data in its capacity as the US Agency receiving PNR transferred data.37 The Commission meanwhile adopted an Adequacy Decision, amounting to a formal finding that, for the purposes of Article 26(5) of the Directive, the undertakings offered by the CBP provided adequate protection for the data of passengers flying to or from the United States.38 On 21 April 2004, the European Parliament voted to take the European Commission to the Court of Justice over the proposed EU-US deal to exchange passenger name records (PNR).39 However, the adoption of a 35

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Directive 95/46 of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data, OJ 1995 No. L281, 23 November 1995, p. 31. On the Agreement and its predecessors, see Agreement between the European Community and the United States of America on the processing and transfer of PNR data by Air Carriers to the United States Department of Homeland Security (DHS), Bureau of Customs and Border Protection ([2004] OJ L 183/ 83, and corrigendum at [2005] OJ L 255/168). Undertakings of US CBP issued on 11 May 2004, OJ [2004] L 1235/11. Adequacy Decision of 14 May 2004. See House of Lords European Union Committee: The EU/US Passenger Name Records (PNR) Agreement (21st Report of Session 2006-07, 5 June 2007), para. 38 (House of Lords). See the EP’s objections to the Adequacy decisions as expressed in a resolution: www.statewatch.org/news/2004/mar/EP-PNR-Adequacy31-03–04.pdf The vote was 276 voted in favour, 260 against, 13 abstentions to refer the PNR agreement to the ECJ for opinion under ex Article 300(6). Three MEPs circulated a letter calling on colleagues to back the recommendation to go to the court. ‘Dear Colleague, Today the European

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so-called ‘light’ international agreement thereafter operated to render its proceedings for ex ante review, by means of a Council decision for an Agreement and Commission adequacy decisions. Thus, an Agreement between the EU and the United States was signed between the representative of the EU Presidency and the US DHS and entered into force in 2004. Much disquiet, however, remained concerning the impact of the Agreement on fundamental rights, even after the issuing of the US undertakings. As the House of Lords European Union Committee stated, there was much uncertainty in Member State Parliaments about the legal purpose of the Agreement entered into. The Committee outlined that [the Agreement] was not intended to authorise the transfer of PNR data by the airlines to the US authorities . . . Its purpose was to legalise the ‘pulling’ by CBP of PNR data . . . if and only if this took place in accordance with the Commission Adequacy Decision, and hence in accordance with the Undertakings.40

The EP in particular continued to voice its concerns and eventually sought in two sets of proceedings initiated in 2004 before the Court of Justice against the Council and Commission the annulment both of the Commission Adequacy Decision and of the Council Decision authorizing the signature of the Agreement.41 The European Data Protection Supervisor supported the EP, while the Commission and Council in the two sets of proceedings was supported by the United Kingdom. The hearing took place on 18 October 2005, and Advocate General Léger gave his Opinion on 22 November 2005.

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Parliament will vote on whether to ask the European Court of Justice to rule on the legality of the EU/US agreement on the transfer of PNR data on air travellers to the USA. This step has become necessary to resolve a conflict between Parliament and Commission, which has at its heart fundamental questions of privacy and security. The Court will be asked to act as a lawyer would, advising a client who is preparing to sign an important contract. The recommendation from the Legal Affairs Committee to refer this matter to the ECJ is neither obstructionist nor frivolous. . . . the Commission and the Council have gone out of their way to avoid effective parliamentary scrutiny at both the national and European level. . . . For this reason we have supported, and invite you to support, the call by Parliament’s JURI committee for recourse to the European Court of Justice as a precautionary measure.’ www.statewatch.org/news/2004/ apr/13ep-vote-pnr-court.htm. Cf subsequently, European Parliament resolution on seeking an opinion from the Court of Justice on the compatibility with the Treaties of the EU-US Agreement on the use and transfer of Passenger Name Records to the US Department of Homeland Security (2012/2615(RSP)). House of Lords, para. 40 (see n 387). See n 1. The Council adopted Decision 2004/496/EC on the basis of ex Article 95 EC in conjunction with ex Article 300(2) EC. Commission Decision 2004/535/EC was adopted pursuant to Directive 95/46/EC.

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Advocate General Léger held that Directive 95/46 could not constitute an appropriate basis for the adoption by the Commission of an implementing measure such as a decision on the adequate protection of personal data that are subjected to processing operations expressly excluded from its scope. Rather, to authorize transfers of such data on the basis of that directive would amount to extending its scope in an indirect manner. He held that the decision on adequacy does not concern a data processing operation necessary for a supply of services, but one regarded as necessary to safeguard public security and for law enforcement purposes. That is certainly the purpose of the transfer and the processing of PNR data.42

The Court (agreeing with the Advocate General) in its decision given on 30 May 2006 held inter alia that ex Article 95 EC (now Article 114 TFEU), as the legal basis of the Council Decision read in conjunction with the Data Protection Directive, did not provide an adequate legal basis.43 It accordingly annulled both Decisions and concluded that it was unnecessary to consider the Parliament’s other arguments. Given the consequences of its judgment for the EU-US Agreement, the Court preserved the effect of the Adequacy Decision until 30 September 2006 to allow time for a new Agreement to be negotiated. The Court of Justice struck down the First Generation EU-US PNR solely on legal competence grounds. Notably, it did not consider the relevance of fundamental rights for its decision, unlike the Advocate General did. This omission allied to the parsimonious nature of the Court’s reasoning, and has given force to the view that the decision arose from a deeply divided Court.44

The Impact on the EU-US PNR Agreement The specific aftermath of the decision was that a provisional seven-year Agreement was concluded in 2007. It replaced the Agreement struck down by the Court and is commonly understood to have amounted to a significantly

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Joined Cases C-317/04 and C-318/04, European Parliament v Council and Commission (Opinion of Advocate-General Leger), [2006] ECR I-4721, paras. 102–10. Ibid, paras. 67–70. See Gilmore and Rijpma, above n 2. As Docksey aptly states, there are three specific ‘camps’ as to how to depict the decision, falling between the ‘internal market’, ‘fundamental rights’ and ‘data protection’ schools: See C. Docksey, ‘The European Court of Justice and the decade of surveillance’ in Hijmans and Hielke (eds), Data Protection Anno 2014: How to Restore Trust? Contributions in honour of Peter Hustinx, data protection supervisor Liber Amicorum Peter Hustinx (Cambridge: Cambridge University Press, forthcoming).

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worse legal bargain for the EU because the United States took advantage of the renegotiation to extend data retention periods.45 The EP sought to postpone its approval vote on the 2007 Agreement, deploying its approval powers accorded to it by the Treaty of Lisbon (Article 218(6)(a) TFEU). The EP pressed the Commission for a global strategy on external PNR with the United States, Canada and Australia, which emphasized better redress and effective legal safeguards.46 Thereafter, negotiation of a revised Agreement with the United States followed suit and a ‘Second Generation’ Agreement was agreed upon in 2011.47 It has been described by the European Commission as an ‘improved’ agreement, enhancing data protection mechanisms therein, limiting the use of data, purporting to fight crime more effectively, placing obligations on the United States to share data with the EU and setting out a detailed description of the circumstances when PNR can be used.48 Not without controversy, the EU is also developing its own internal EU PNR system.49 The LIBE Committee of the EP rejected in 2013 the Commission

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See B. De Witte, ‘Too much constitutional law in the European Union’s Foreign Relations?’ in B. De Witte and M. Cremona (eds), EU Foreign Relations Law: Constitutional Fundamentals (Oxford: Hart Publishing, 2008), p. 11; Agreement between the United States of America and the European Union on the use and transfer of Passenger Name Record Data to the United States Department of Homeland Security of 17 November 2011; OJ L 215/5, 11 August 2012 See Proposal For a Directive on the use of Passenger Name Record data for the prevention, detection investigation and prosecution of terrorist offences and serious crime, COM (2011) 32. The EU legislative process on an EU PNR data collection system had taken a dramatic turn at the time of writing due to the EP’s approval of new draft EU PNR rules in July 2015: www.europarl.europa.eu/news/en/news-room/content/20150714IPR81601/html/PassengerName-Records-MEPs-back-EU-system-with-data-protection-safeguards. A PNR agreement was signed by the EU Council of Ministers and Canada on 25 June 2014 and referred by the EP to the Court of Justice in November 2014: Opinion 1/15, pending. Resulting in the Communication from the Commission on the Global Approach to Transfers of Passenger Name Record (PNR) Data to Third Countries, COM (2010) 492. Agreement between the United States of America and the European Union on the use and transfer of Passenger Name Record Data to the United States Department of Homeland Security of 17 November 2011; OJ L 215/5, 11 August 2012. European Commission Press Release ‘New EU-US Agreements on PNR improves data protection and fights crime and terrorism’ IP/11/1368 (17 November 2011), http://europa.eu/ rapid/press-release_IP-11–1368_en.htm. See Proposal For a Directive on the use of Passenger Name Record data for the prevention, detection investigation and prosecution of terrorist offences and serious crime, COM (2011) 32, Commission Communication, ‘A European terrorist finance tracking system available options,’ COM (2011) 429 final, although their precise future is far from certain. The Directive was rejected by the European Parliament in 2013: ‘MEPs vote down air passenger data scheme’ EUObserver.com (24 April 2013), www.euobserver.com/justice/119926. See Fahey (n 5). See also the contributions of J. Vara, ‘Transatlantic Counter-Terrorism Cooperation Agreements on the Transfer of Personal Data: A Test for Democratic Accountability in the EU’, V. Mitsilegas, ‘Transatlantic Counter-Terrorism Cooperation and European Values. The

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proposal for an EU PNR Directive dating from 2011 on the basis of its necessity and proportionality. The so-called Kirkhope Report of the EP on the directive proposal (named after its rapporteur) released in 2015 tabled a new draft text. Notably, while limiting inter alia the data retention periods and providing for stronger data protection provisions, it nonetheless offered support for the inclusion of intra-EU flights, despite fears that it would lead to pan-European surveillance.50 However, the EP also questioned the sustainability of a PNR system in light of the decision of the Court of Justice in its Data Retention decision and made recommendations accordingly for compatibility, views which were incorporated into its approval of draft EU rules in July 2015.51 The Charlie Hebdo recently again revived the salience of an EU PNR directive. Several Member States, particularly the United Kingdom, have meanwhile been developing their own PNR systems, albeit with considerable variations. This has led for calls for harmonization in the form of an EU PNR system as a means to prevent divergent data collection systems developing. The Article 29 Working Party in 2015 still asserted that the Directive had yet to be justified in terms of its necessity and was likely to seriously undermine provisions of the Charter e.g. Art. 7 and 8.52 The Commission at the time of this writing was maintaining that the EU PNR Directive maintained sufficient safeguards so as not to fall foul of the Data Retention decision.53 This was followed by the EP’s approval of new EU PNR rules with considerable safeguards, for example, as to transparency and the exclusion of intra-EU PNR.54 Thereafter, the EU and the United States reached an agreement on a data protection ‘Umbrella Agreement’, expressly striving for a high level of protection.55 An Agreement reached with Canada in 2014 has been referred by

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Elusive Quest For Coherence’ and S in ‘t Veld, ‘Transatlantic Relations and security Reflections from a Politician, Practitioner and Litigator’ in Fahey and Curtin (see n 5). Article 29 Working Party Letter to the LIBE Committee on EU PNR (19 March 2015). LIBE Committee Rapporteur (Kirkhope Report), Draft Report on the Proposal for a Directive of the European Parliament and of the Council on the use of Passenger Name Record Data for the prevention, detection, investigation and prosecution of terrorist offences and serious crime (17 February, 2015). European Parliament resolution of 11 February 2015 on anti-terrorism measures (2015/2530 (RSP)). Article 29 Working Party Letter to the LIBE Committee on EU PNR (19 March 2015). Letter from the Commission to the President of the European Parliament (March 2015), leaked on Statewatch.org, http://statewatch.org/news/2015/mar/eu-com-eu-pnr-letter.pdf The EU legislative process on an EU PNR data collection system had taken a dramatic turn at the time of writing due to the EP’s approval of new draft EU PNR rules in July 2015: www .europarl.europa.eu/news/en/news-room/content/20150714IPR81601/html/Passenger-NameRecords-MEPs-back-EU-system-with-data-protection-safeguards See http://europa.eu/rapid/press-release_STATEMENT-15–5610_en.htm

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the EP to the Court of Justice on the basis of its possible non-compliance with the Data Retention Directive decision, substantially similar to the EU-US PNR Agreement.56 Other third countries such as Mexico, South Korea and the United Arab Emirates all now urgently seek a PNR Agreement with the EU, and some of the negotiations are beginning to be fraught with difficulties.57 The relevance of the place of individuals and officials in the EU-US PNR decision is paramount in a retrospective story tale, and it is this context to which the account next turns. Accordingly, the courtroom ‘context’ and actual proceedings are accounted for, through the insiders’ perspective obtained through interviews conducted.

looking beyond the law: key figures in, around and of the eu-us pnr litigation This section looks at the EU-US PNR litigation in two ways: the stories of the past and the stories of the present and future.

The Stories of the Past The Victory of the ‘One-Shooter’ Litigator The classical legal analysis of the EU-US PNR decision of the Court of Justice depicts it as a ‘pyrrhic victory’ for the EU. It is litigation that is described as only an ostensible victory for its litigator, the EP, the classic ‘one-shooter’ litigator, if the account in the preceding section is adopted. The context of this analysis thus requires further understanding. An official interviewed by the author described the EU-US PNR litigation as formally viewed a victory (but also a ‘pyrrhic’ one), which was in fact politically useful and in fact even a big legal victory for its Parliament and its Legal Service. They described the views of the Court of Justice and Advocate General as disappointing, with split views which provided evidence of much debate in the Court. Nonetheless, it was politically useful as a decision because the European Parliament and its Legal Service became involved in subsequent agreements and the case became a first step towards other, more significant changes. They also suggested that the 56

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A PNR agreement was signed by the EU Council of Ministers and Canada on 25 June 2014 and referred by the EP to the Court of Justice in November 2014: Opinion 1/15, pending. An agreement from 2006 remains in place. Which is vigorously opposed by in ‘t Veld in particular: ‘Mexico-EU data dispute puts airlines at risk of sanctions’ EUObserver.com (20 March 2015), https://euobserver.com/justice/128095

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EP would increasingly litigate well beyond its ten cases a year in future times, now as joint legislator, but also as individual politicians, representing an increasing number of Member States. They said that it was a complicated procedure to get a mandate for litigation in the first place, never mind intervening in existing litigation, and it had a policy of not intervening in support of the litigation of individual members. Thus, the relevance of the ‘win’ result of the decision was not to be understated. The ‘Pyrrhic’ Part of the Victory The depiction of the EU-US PNR litigation as a pyrrhic victory has a simple truth to it – that no one in reality truly won or gained from it simpliciter. For example, an official interviewed by the author noted that a common ‘joke’ in legal circles concerning the EU-US PNR litigation was not that it was a ‘pyrrhic victory,’ but that it was a ‘Pyris’ victory, so called after Jean-Claude Pyris, the Head of the Legal Service of the Council and later to be a lead drafter of the Treaty of Lisbon text – the ‘punch-line’ being that the Council had in reality won, not the EP.58 Part of the reason for the depiction of the decision as a ‘pyrrhic victory’ in reality was not the decision but rather the aftermath of the decision.59 One interviewee recalled how on the day of the judgment, a teleconference had been scheduled with the United States as to how to follow up and reopen negotiations so as to respect the judgment. However, an interviewee recalled how it was called off on account of the ‘validity’ judgment, i.e. that there was no longer an agreement to be discussed. Another interviewee reflected upon the idea that the EP had never accepted that the PNR decision was ‘pyrrhic’ or a disaster, even though their request for an Opinion had become moot and the EP legal service appeared to go further than their political representatives in ‘sticking’ to a validity hearing.60 The 58

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The official quoted a Congress official, who he had heard stating that there was no real need for PNR data, which was theatrical and useless: ‘it was all just games. . .’ But of course the proceedings themselves were far from unremarkable. An interviewee of the author who recounted how the hearing of EU-US PNR decision had been expected to take two days before the Court of Justice, with two cases, one against Council, other against Commission but which it did not in the end. The official described the hearing as ‘terrible’, whereby the pleadings were ‘hurried up’ and rolled into one morning by the President, much to the dismay and surprise of many EU institutions, even refusing the second agent of the EP the possibility to speak. The official described how the Courtroom of the ECJ was coincidentally full of national superior court judges on a visit to the Court of Justice, which appeared to account for the rush by the Court to abruptly halt the EU-US PNR hearing at lunchtime well ahead of schedule. Another former official, who did not wish to be named, maintained that the decision harbored particularly bad memories for them, which they labeled as one of the ‘stupidest’ ever taken by the EP and ever accepted by the Court.

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official expressed dismay at their delight with victory of the Court as a historic finding of invalidity. In fact, their request for an Opinion had not halted the negotiations, as it had had no suspensory effect. The threat of the United States fining airlines entailed that the negotiations on an Agreement proceeded with expedition. Moreover, another interviewee emphasized how the original negotiator of the first agreement from the Commission was eventually fired. In truth, however, the full ‘sting’ as to the pyrrhic claim lies in the rights, redress and governance provisions negotiated in subsequent agreements, which, as author has argued previously, constituted uncomfortable compromises and sub-standard agreements.61 The Parliamentary ‘Voice’ as to the Victory The context of the evolution of the EP’s formal political and legal powers was formally outlined in the first section of this chapter. The place of the EU-US PNR in this evolution is important because it was the start of a civil liberties campaign of agitation. In an interview, a former member of the EP emphasized the political dynamic of the EU-US PNR context as explosive and tense both within the EU and externally. One specific feature of the time period under analysis of the EU-US PNR decision (i.e. 2004–06) was the constant agitation of the Parliament against the status quo and its dissatisfaction with the manner in which the United States was acting on European soil. Former MEP Johanna Boogerd-Quaak for the Netherlands described her role as LIBE committee rapporteur and her efforts via many votes and resolutions to seek an international agreement with the UnitedS as an ameliorating technique through law. She described the Parliament’s ‘temporary’ successful votes being met with a ‘light’ agreement from the United States, in a context superseded constantly by major news events such as the Madrid bombings. The role of Sophie In ‘t Veld MEP as her political successor was emphasized by her as important for the continuity of the same civil liberties agitation at the heart of the political platform of D66 (the Dutch political party of both individuals).62 This leads to a discussion of the parliamentary work of In ‘t Veld as to the EU-US PNR and other security agreements. As a current member of the EP since 2004, and the last two parliaments, Sophie in ‘t Veld from the 61 62

See generally Fahey (n 5). She was no longer in office at the time the litigation went to the Court of Justice, given the transition of parliamentarians into the new parliamentary term, but had impressed upon her successor, Sophie in’ t Veld, this portfolio and actively supported her successor’s work and efforts.

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Netherlands also was interviewed extensively for the present account because of her place as a highly significant actor in contemporary transatlantic relations. One of her main observations on contemporary transatlantic relations was that the EU needed to “shape up” in their transatlantic relationship. The relationship is very unequal in the area of law enforcement, security and counter-terrorism. A second observation was that the parliamentary dimension of the transatlantic cooperation needed to be strengthened urgently. Most transatlantic contacts were between civil servants, diplomats and government officials. According to her, the Transatlantic Legislators Dialogue had not worked very well in practice. She summed up the state of EU-US Passenger Name Record (PNR) data pithily: after nine years of negotiations, renegotiations and court cases, in 2012 Parliament ended up endorsing an agreement that was worse than the one that challenged the Court of Justice in 2004. In ‘t Veld referred to the recent high-profile Data Retention litigation challenge as a changing context for EU-US relations. She emphasized how she was battling to challenge the strong ‘Sir Humphrey’ character of the Commission and Council with respect to transparency and international relations. In addition to her parliamentary work, she has pursued some of these matters in court, both in the US and in the EU, and has taken some cases before the European Ombudsman. This chapter next turns to this litigation in greater detail. The Litigation after the EU-US PNR Decision: ‘What Sophie Did Next’ What followed after the PNR litigation was further individual litigation from In ‘t Veld, conducted without intervention by the European Parliament en masse. In ‘t Veld’s challenges begin with her efforts, albeit unsuccessful, to obtain her own Passenger Name Record data under the US Freedom of Information Act (FOIA), through processes, and then litigation, which was dismissed for ‘erroneously’ arguing that the airline carriers’ data and the Department of Homeland Security’s data were equivalent or similar.63 Later on, her role in the SWIFT Agreement proved to be more successful. Although the European Parliament vetoed the SWIFT Agreement, finally reached in 2009, a second SWIFT agreement was reached in 2010. A request by MEP In ‘t Veld to disclose a classified Council Service Legal Opinion suggesting that the earlier legal basis of the Agreement was flawed succeeded in part before the General Court recently, on the basis that the public interest did not 63

See In ‘t Veld v. Department of Homeland Security Case No 1:08-cv-0115-RMC, District Judge Collyer presiding (D.C.C, 15 December 2008).

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require its suppression.64 Advocate General Sharpston ruled in her favor in early 2014 in a much more forceful vindication of transparency in the negotiation of international agreements by the EU. Thereafter, the Court of Justice delivered a resounding victory in her favor later in 2014, weighing in against blanket institutional secrecy in the area of international relations.65 Her role in the ACTA affair recently is also of note. As outlined in the first section of this chapter, ACTA was negotiated and signed by the EU and was vetoed by the EP in July 2012 for reasons related to the failure to inform it adequately and on time, following an embarrassing series of clarifications issued by the Commission.66 In ‘t Veld again herself sought public access to the negotiating mandate for ACTA through litigation without the support of the EP en masse. The document was subsequently leaked and then was placed by the EU in the public domain. However, the General Court recently ruled against her on the ground that the interest in shielding the EU’s negotiation strategy had to prevail, a position that transparency advocates have vigorously opposed.67 Of note is that since the decision, the Council has published the negotiating mandate for the TTIP negotiations with the United States, demonstrating how close her position now is to the epicentre of the political agenda.68 The litigation of In ‘t Veld must surely be regarded as most notable precisely because it was institutionally unsupported, at least officially, by the EP. One must also note that her position has become increasingly closer to the epicentre of ‘mainstream’ EU law and policy on data transfer, certainly at the time of writing. In this regard, it is necessary to consider the status quo of EUUS PNR law, considered next.

how the story will unfold This retrospective has engaged only to some extent in the ‘bigger picture’ of transatlantic relations, looking beyond the small-scale story of the institutional context to the actions of the EP as litigator. It is important now to consider

64 65

66 67 68

T-529/09, In ‘t Veld v. Council [2012] ECR II-000. Opinion of Advocate General Sharpston, 13 February 2014; Case C–350/12 P Council of the European Union v Sophie in ‘t Veld [2014] ECR-I 000. See E Fahey, ‘EU Foreign Relations Law: Litigating to Incite Openness in EU Negotiations’ (2014) 4 European Journal of Risk Regulation pp. 553–56. See also V. Abazi and M. Hilldebrandt, (2015) Common Market Law Review, forthcoming. See above n 23. T-301/10, In ‘t Veld v. European Commission [2013] ECR II-000. See Curtin (n 14). On 9 October 2014: see http://data.consilium.europa.eu/doc/document/ST-11103–2013-DCL-1/ en/pdf

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how the story will unfold. It must be recalled that the US Attorney General has claimed before the European Parliament that no human rights violations have ever resulted from transatlantic justice and home affairs cooperation.69 However, certain Members of the European Parliament, most audibly In ‘t Veld, have claimed that the secrecy surrounding the transmission of data under certain transatlantic Agreements makes it virtually impossible to assess their operation, even if couched in an extensive network of governance mechanisms.70 As noted above, the alleged success and effectiveness of transatlantic rulemaking, specifically the EU-US PNR and TFTP Agreements, have spurred the EU to develop ‘replica’ internal rules, which raise the same legitimacy and accountability questions.71 However, while the recent outbreak of the NSA surveillance saga caused the EP to vociferously call into question a range of existing EU-US security agreements,72 it has re-ignited EU-US negotiations on an EU-US data protection framework. Time will tell whether the EP’s approval of the draft EU PNR scheme in 2015 is a volte face or a victory for hard-fought gains.73 These developments sit alongside the resolution of the EP to seek an opinion of the Court on the validity of the EU-Canada PNR Agreement and to aggressively obtain more transparency as to the TTIP negotiations and impact upon its substantive content, e.g. as to dispute settlement.74 One may question whether the EP is now setting or (merely)

69

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71 72

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Attorney General Eric Holder, Remarks to the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs, claiming no rights violations had resulted from EU-US legal relations to date (World News, 20 September 2011, http://wn.com/European_Parliament_ Committee_on_Civil_Liberties,_Justice_and_Home_Affairs. Transcript of the speech can be found at http://useu.usmission.gov/ag_libe_092011.html) See comments cited in ‘Terrorist data oversight tainted by potential conflict of interest’, EUObserver.com (21 December 2012), http://euobserver.com/justice/118593. See also M. de Goede, ‘The SWIFT affair and the Global Politics of European Security’ (2012) 50 Journal of Common Market Studies 214; M. Cremona, ‘Justice and Home Affairs in a Globalised World: Ambitions and Reality in the tale of the EU-US SWIFT Agreement’, Institute for European integration Research Working Paper No. 4/2011. See Fahey (n 5) on the operation of the governance provisions. See above n 49. European Parliament Resolution of 23 October 2013 on the suspension of the TFTP agreement as a result of US National Security Agency (NSA) surveillance (2013/2831 (RSP)). See Joint Press Statement following EU-US Justice and Home Affairs Ministerial Meeting of 18 November 2013, Council of the European Union statement 16418/13, 18 November 2013, http://europa.eu/rapid/press-release_MEMO-13-1010_en.htm www.europarl.europa.eu/news/en/news-room/content/20150714IPR81601/html/PassengerName-Records-MEPs-back-EU-system-with-data-protection-safeguards E.g. Euractiv.com ‘Parliament’s opposition to TTIP arbitration on the rise’, 21 April 2015, www .euractiv.com/sections/trade-society/parliaments-opposition-ttip-arbitration-rise-313935. See draft

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defending the public interest in EU foreign affairs and its effectiveness. It appears still heavily reliant upon the acceptance by the Court of the need for institutional balance in foreign affairs. What is pending and future litigation of PNR Agreements with a Third Country, beyond the United States, likely to achieve? Would the EP be able to procure a victory with substance to it? The EP still does not per se enjoy any special powers to litigate the ‘governance’ provisions or functioning of EU-US PNR. Despite the fact that the governance of such agreements has generated many challenges as to the rule of law,75 the EP enjoys no special oversight role in the latest EU-US PNR agreement, and its access to information has proven to be rather limited and confined.76 Its decision to test the validity of the EUCanada PNR Agreement suggests that ex ante legality questions are perceived to be more useful and justiciable. The EU-US PNR decision now acts as an increasingly awkward precedent for the Court in the era of the NSA surveillance saga and a multiplicity of fundamental rights instruments. The Court may wish to revisit its decision wholesale in its forthcoming Opinion on the EU-Canada PNR Agreement. One official interviewed described how the recent Data Retention Directive judgment was unduly opposed to bulk retention of data and insufficiently nuanced as a position. They adverted then to the question of how the PNR case might be litigated today as one that was increasingly interesting to judge, partly for its element of unpredictability. In this regard, it is argued here that the recent Data Retention Directive and Google ‘Right to be Forgotten’ decisions en masse demonstrates that the Court is not afraid to put EU fundamental rights centrally in this context. It took In ‘t Veld a long time to procure modest and often rather academic outcomes. Five years of litigation is a long time in EU-US law and politics. Her work was done initially through conducting ‘low level’ action (e.g. FOIA procedures) and then transparency litigation. It then appears to have become a broader concern of the EP. It raises the issue as to the shifting public interest in transatlantic relations given its broad range of actors. The story is not

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resolution from the EP Committee on International Trade 2014/2228(INI), followed by the postponement of an EP vote on a TTIP resolution on procedural grounds (9 June 2015). On 29 June, the Trade Committee was scheduled to vote on amendments to the EP’s draft recommendations to TTIP negotiators. Cf Commission proposals for a permanent Investment Court (May 2015): Concept Paper ‘Investment in TTIP and beyond – the path for reform’, http://trade.ec.europa.eu/doclib/docs/2015/may/tradoc_153408.PDF See further Fahey (n 5). See the Ombudsman above (n 24) and Curtin (n 14) on the arrangements in place.

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necessarily a clean or clear-cut one, but rather of perhaps both individual and institutional ‘one-shooters’ gaining ‘repeat hitter’ powers and experiences.

conclusions Controversy and ‘high politics’ undoubtedly taints EU-US PNR as an account. The decision stands as a reminder of the uncomfortable – and often intractable – nexus between law and politics. The EU-US PNR decision is an instructive story on the evolution of an institutional player in EU law. It serves to show how one-shooters and repeat players may not always be so readily separable. Transatlantic agreements in security have brought into question the role of individual versus collective litigation and the structures of the EP to sustain a particular type of pattern of litigation in the public interest. It arguably also underscores the complexity of formulating the public interest in EU law as its Area of Freedom, Security and Justice as a field. EU-US PNR may deservedly be a leading case of EU law for its place in igniting institutional balance in foreign affairs just as much as any other leading case depicted in this volume, not least Les Verts. EU-US PNR generated a process of litigation that would see many changes in EU-US security. In this regard, it offers an important story worth retelling for understanding responses to the NSA affair and the future of EU-US relations in security. The impact of and reasons for both one-shooters and repeat hitters in EUUS relations are instructive as to shifts in knowledge, power and political strategy. Whether one-shooters will be drowned out or absorbed by a greatly empowered EP remains to be seen. The capacity of public interest actors such as Schrems to initiate major public interest litigation could be of significance here yet. Where this leaves the EP as a one-shooter or repeat player remains to be seen precisely because the development of institutional balance in EU foreign affairs is still embryonic. One can conclude that the distinction between one-shooters and repeat players has arguably not been conceived of with EU law, an institution or its components in mind. Nevertheless, the shift from one-shooters making a difference on the context of a would-be repeat player is one which warrants further study across disciplines, not least as to the institutional actors of the EU.

acknowledgements and disclaimer For the purposes of this paper, the author has interviewed various politicians, lawyers and officials of diverse EU institutions and agencies involved in the litigation and/ or currently in political office and litigating EU-US relations.

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Nearly all officials interviewed, past and present, have asked for their identity not to be revealed, and the chapter refers to those individuals as ‘they’ rather than in the masculine or feminine and purports to mask their identity where appropriate. All notes are on file with the author. I am grateful to Raluca Sterian and Justin Wong, to the editors, Rachna Kapur and participants at the EU Law Stories Conference in Washington, DC for their suggestions and assistance where provided. The usual disclaimer applies.

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28 Lessons from American Legal History Social Rights and Market Freedoms

michelle egan

In 1889, a travelling salesman found himself in circuit court in Montgomery County, Missouri, for violating the law by going from place to place, in a cart or a spring wagon, selling Singer sewing machines, without having a license as a peddler. The Missouri Supreme Court ruled that it was a valid exercise of the power of the state over persons and business within its borders. The fine was $50. We might not call them drummers, hawkers, or peddlers in Europe these days, but the story of the travelling salesman in Missouri not only resonates with European efforts to address barriers to internal commerce; it also illustrates how law is full of stories that are an important part of understanding how single markets evolve. From the outset, studies of European integration have focused on understanding the structural dynamics of building markets across different jurisdictions.1 While some scholars have concentrated on the economic rationale for integration in terms of the strategic costs and benefits, with the presumption being that the economic gains outweigh costs, others have emphasized the institutional design of divided power systems and the impact of federalism in shaping the dynamics of market integration.2 More recently, researchers have been concerned about democratic and constitutional legitimacy due to increased economic insecurity and social inequality that has eroded public support for greater market integration.3 Though the EU has evolved significantly beyond the internal market, much of the legal analysis is still premised on doctrinal analysis 1

2

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Michelle Egan, Single Markets: Economic Integration in Europe and the United States (Oxford: Oxford University Press, 2015). See, for example, Sergio Fabbrini (ed.), Democracy and Federalism in the European Union and United States: Postnational Governance (London: Routledge, 2004). Vivien Schmidt, The Eurozone’s crisis of democratic legitimacy: Can the EU rebuild public trust and support for European Integration? http://ec.europa.eu/economy_finance/ publications/eedp/pdf/dp015_en.pdf

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of case law and treaties that tends to be organized around the ‘four’ freedoms.4 More recently, substantial work has focused on the importance of processes of legal and social change, looking at how issues of judicial access, mobilization, interpretation and enforcement can all become an integral part not only of doctrinal development but institutional and policy choices.5 The stories in this volume highlight this breadth and variety of legal historiography, as they discuss cases across multiple policy domains, where judgments are bound up with more than just rational material exchanges but also values, rights and norms that deeply affect power, administration and governance of member states. While the theoretical and empirical work in this volume focuses on the European context, and the dynamics and repercussions of European integration, this chapter moves beyond the narrative context of specific cases to highlight the broader structural forces involved in integrating markets. By drawing on a comparison of the United States and the European Union (EU) in forming their common markets, the goal is to highlight common questions that need to be asked of adjudicators in all federal or federal-like systems about the relationship between jurisdiction and legal order, rights and remedies. Thus, the structural dynamics of market building across multiple jurisdictions will illustrate common challenges before the judges regardless of the particular context of that judicial system. In examining the relationship between legal institutions and economic organization, studies often focused on the perceived economic gains, focusing on how judges struck down state legislation, through what Europeans called negative integration, because they undermined economic growth. Scholars traced doctrinal shifts, the origins and meanings of specific concepts and the historical significance of landmark cases. The subsequent effort to go beyond the study of doctrine in terms of substantive and procedural mechanisms to consider how social, economic and cultural forces impact the role of law has given rise to a law-in-context approach, which underpins the chapters in this volume. Ideas associated with the field of American Political Development (APD) can further assist in our analysis of European integration as the field has sought to promote an interdisciplinary dialogue between law, political science and history as it focuses on engagement with the past informed by systematic consideration of durable shifts in political authority which can help to make sense of European political development.

4

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Catherine Barnard, The Substantive Law of the European Union: The Four Freedoms, Third Edition (Oxford: Oxford University Press, 2010). E.g. Rachel Cichowki, The European Court and Civil Society: Litigation. Mobilization and Governance (Oxford: Oxford University Press, 2007).

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APD stresses the historical construction of the American polity but situates American political development comparatively.6 This makes it ideal to understand the role of law in shaping market integration, as the emergence of the commercial republic in the United States can provide a “story” that invites further analysis and comparison. Just as the United States struggled to create a single market against the centrifugal forces of American states, the EU has also sought to address the effects of divergent rules and jurisdictions. What this suggests is that studies in European law are not much different than legal studies in the United States, where the goal has been to move away from a well-developed set of constitutional assumptions to think about the changing meaning and mechanism of law in terms of its market function and impact across the nineteenth century. Instead of American exceptionalism (or sui generis to use the European narrative), legal historians have sought to understand the emergence of a national economy, integration of new territories, the growth of bureaucratic and regulatory authority and the expansion or contraction of rights by using a narrative about state formation that is different than commonly recognized. In the United States, the expansion of national power in the nineteenth century through the heritage of power sharing among the states, and the role of law in facilitating state power, has generated a new wave of scholarship in APD that has many parallels with the European Union. In picking up these themes, such a story about American state and market formation reveals some striking parallels with their European counterparts, offering insights into how two commercial republics evolved. Just as issues of inclusion and citizenship, debtor-creditor relations in the current Eurozone crisis or the trade-offs between economic liberalization and public services are deeply contested and divisive in Europe, a closer look at some of the same issues in American legal history and historiography can broaden this debate.

changing historiography: contingency, complexity and conflict Bringing together the work of legal historians and lawyers, the different approaches and understandings of European law has drawn upon a plurality of approaches to consider the process of constitutional and administrative change in Europe. However, there must be genuine interpretive as well as evidentiary disagreement and a more self-conscious understanding that 6

Karen Orren and Stephen Skowronek, “Pathways to the Present,” in The Oxford Handbook of American Political Development, eds. Richard Valelly, et al. (in press).

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methodologies, narratives and epistemology can generate ‘pluralities of history’.7 To determine why specific judicial decisions emerge and to move beyond legal formalism, legal historians have focused on unearthing archival documents to understand legal reasoning, including the personality, preferences and beliefs of judges, often leading to a biographical analysis of specific judges or a detailed micro-history of specific landmark cases to understand the logic behind specific jurisprudential notions. They are to some degree challenging studies of European law in which law is viewed as a purposive or functional activity, which dominated some of the earlier narratives of European integration, exemplified by the neofunctionalist literature, or the integration through law framework.8 Interestingly, nineteenth-century scholars also observed the contingency and discontinuity of legal history, expressing concerns about ascriptions of causality between past and present law. Constitutional practices were as unsettled in nineteenth- and twentieth-century United States as they were in post-war Europe. Constitutional doctrines and statutory practices emerged to deal with the changes in production and consumption and rights and citizenship throughout the nineteenth century.9 As Europe continues to be in turmoil with considerable protest about the integration project, lawyers and historians are contributing to the debate about democratic legitimacy by studying the framework in which CJEU cases were decided. In doing so, they are implicitly raising questions about the counter-majoritarian tendencies of the European Union and the relationship of law to the empirical and normative development of political union. What the chapters illustrate is that legal decisions contain a degree of indeterminacy, impacted by changes in legal discourse and concepts as well as changes in markets and society. European law has now embraced formalist, normative, theoretical and empirical

7

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9

See Piers N. Ludlow, ‘History Aplenty: But Still Too Isolated’, in Michelle Egan, Neill Nugent and William E. Paterson (eds.), Research Agendas in EU Studies: Stalking the Elephant. Palgrave Studies in European Union Politics. (Hampshire: Palgrave Macmillan, 2009); Mark Gilbert, “The Treaty of Rome in Narratives of European Integration”, in Michael Gehler (ed.), Vom Gemeinsamen Markt Zur Europäischen Unionsbildung (Bőhlauverlag, Wein). It is worth remembering the impact of the functionalist social science more generally in the 1950s; with its teleological stance, it is not surprising scholarship at the time treated phenomena such as legal integration as necessary or inevitable. Mauro Cappelletti et al. (eds.), Integration through Law: Europe and the American Federal Experience, 5 vols. (Berlin/New York: Walter De Gruyter, 1986); Eric Stein, “Lawyers, Judges, and the Making of a Transnational Constitution,” American Journal of International Law 75 (1981), 1–27. William Novak, The Legal Transformation of Citizenship in Nineteenth-Century America, in Meg Jacobs et al. (eds.), The Democratic Experiment: New Directions in American Political History (Princeton: Princeton University Press, 2003).

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approaches, mirroring developments not only in international law but also catching up with similar developments that have occurred in earlier debates in US legal history.10 Instead of the teleological – or, one could argue, functionalist – approach to integration that characterized early studies, there are more critical legal approaches emerging, which run somewhat parallel to the efforts to move away from Progressive history interpretations in the United States. Legal scholars in the United States often portrayed law as a structural impediment to reform, undercutting modern welfare-state-building efforts, so that the nineteenth century was viewed as one of conservative reaction against the expansion of state regulatory authority.11 This jurisprudential tradition argued that nineteenth-century United States was hostile to regulation, redistribution and reform.12 However, this view does not capture the legal practices, developments and innovation that characterized American political and economic development in the nineteenth century that were instrumental to the construction of an internal market. All too often studies have focused on constitutional history rather than the promotion of national and international commerce, the development of a regularized legal system and powers of regulation and administration, and the expansion of territories as different elements of the evolution of American legal authority, market consolidation and innovative governance.13 We need to widen the lens towards a conceptualization of law that emphasizes the structural socio-legal changes that created new modes of governance and administrative structures designed to deal with changing American economic developments. Similarly, the changing social, economic and political context has led to a more sobering narrative in Europe, as these historically constituted institutions at the European level have been legally challenged in terms of their democratic and constitutional 10

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Michelle Egan, “Toward a New History in European Law: New Wine in Old Bottles,” American University International Law Review 28 (2013), 1223–55; Gregory Schaffer, “A Call for a New Legal Realism in International Law: The Need for Method” Minnesota Legal Studies Research Paper No. 09-02, 2009, noting the centrality of legal formalism and doctrinal analysis that focuses on treaty texts and case law. Yet the shift to socio-legal scholarship in international law follows a similar pattern in US legal history, which transformed our understanding of law as a dynamic process, covering substantive domains, and reflecting social demands not just rules and doctrines. William J. Novak, “The Legal Origins of the Modern American State,” in Looking Back at Law’s Century, eds. Austin Sarat et al. (Ithaca: Cornell University Press, 2002), 251. Novak ibid. Bruce Ackerman, who focuses on the three constitutional moments – Founding, Reconstruction and New Deal – reflects this effort to discipline US history and focus on progressive changes We the People: Foundations (Cambridge, MA: Harvard University Press, 1991).

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legitimacy.14 Scholars have focused on the conflict of laws to highlight the power struggles that encompass not just the legal arena but also the administrative and economic functions of the EU.15 Legislative innovation and statutory development have transformed public law in which a range of public policy initiatives extended the regulatory state and created new modes of governance to deal with changes wrought by market integration. In the United States in the nineteenth century, it was statutes ranging from pricefixing and anti-trust to workers compensation, conservation, public health and prohibition.16 Such legislative and regulatory power, distinct from judicial power but wholly within a rule of law tradition, was critical for American political and economic development. As societies became more complex, this statutory expansion generated increased judicial review as courts at both the federal and state levels sought to balance the different demands: the protection of property rights, the regulation of social welfare and legal constraints and uniform provisions on commercial behaviour. American scholars offered new paradigms to understand the development of the American polity. This has brought a wealth of new methods and approaches, as concepts have travelled across geographic, temporal and disciplinary boundaries.17 Whether it is delegation and non-majoritarian institutions, adversarial legalism, market freedoms or the rise of the regulatory state, European integration has been infused with concepts that have been drawn from American debates.18 The past serves as a normative as well as explanatory model in debating current dilemmas. Many traditional comparative analyses between the United States and the EU focus on familiar concepts, such as the creation of federal institutions, law-making, the development of judicial review and the emergence of the constitutional order.19 Yet equally important is how legislative statutes have expanded the

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Christian Joerges, “Conflicts-Law Constitutionalism: Ambitions and Problems” Hertie/Bremen Working Paper, ZenTra Working Paper in Transnational Studies No. 10/2012, November 2012. Antoine Vauchez, “The Force of a Weak Field: Law and Lawyers in the Government of the European Union (For a Renewed Research Agenda),” International Political Sociology 2 (2008), 128–44; Peter L. Lindseth, Power and Legitimacy: Reconciling Europe and the NationState (New York: Oxford University Press, 2010). William Novak, The People’s Welfare (Chapel Hill: University of North Carolina Press, 1996) Nelson and Reid, The Literature, 32. Mark A. Pollack, “Learning from the Americanists (Again): Theory and Method in the Study of Delegation,” West European Politics 25 (2002), 200–19; Giandomenico Majone, Regulating Europe (London/New York: Routledge, 1996). Edmund W. Kitch, “Regulation and the American Common Market,” in Regulation, Federalism, and Interstate Commerce, ed. A. Dan Tarlock (Cambridge: Oelgeschlager, Gunn & Hain, 1981), 9–55; Mauro Cappelletti et al. (eds.), Integration Through Law; Terrance

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functions of government to deal with the social and economic effects of market integration, creating legal obligations, both in terms of negative restrictions as well as positive and affirmative terms of promoting broader public goals. In both cases, this has resulted in an upward shift of decision-making, driven by the instrumentality of the changing terms of trade and commerce. Although legal debates in Europe have not been as ideologically divisive as those in the United States (where issues such as war powers, alien rights and citizenship, or original meaning, have generated partisan debates), there is an unresolved hierarchy between national and European law exacerbated by the economic crisis as Member States have yet to fully internalize the consequences for their own democracies of the interdependence generated by integration. This is difficult for those who value European law and fear the resurgence of protectionism and nationalism. The narrative of blame has replaced that of solidarity, as the EU struggles to tackle the crisis of trust, after decades of harnessing the power of the market to embrace a neo-liberal agenda while also promulgating a neo-Keynesian strategy to deal with the costs of a globalizing economy.20 Thus, legal historians have increasingly challenged the orderly nature of European legal development, documenting how legal practices and jurisprudence were divisive and contested from the beginning.21 Legal scholars have increasingly criticized the thin legal legitimacy and begun to focus on what European law has precipitated in abandoning the model of embedded liberalism and institutionalizing economic rationality, which has undermined the social acceptance of the European project.22 Since economic growth and modernization took place in the post-war period, the assumption was that regional integration in response to the

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Sandalow and Eric Stein, Courts and Free Markets: Perspectives from the United States and Europe (Oxford: Clarendon Press, 1982); Kalypso Nicolaïdis and Robert Howse (eds.), The Federal Vision: Legitimacy and Levels of Governance in the United States and the European Union (Oxford/New York: Oxford University Press, 2001); Sergio Fabbrini, “Transatlantic Constitutionalism: Comparing the United States and the European Union,” European Journal of Political Research 43 (2004), 547–69; Sergio Fabbrini (ed.), Democracy and Federalism in the European Union and the United States: Exploring Post-National Governance (London: Routledge, 2005). Liesbet Hooghe and Gary Marks, “The Making of a Polity: The Struggle over European Integration,” European Integration Online Papers 1 (1997), http://eiop.or.at/eiop/texte/1997004a.htm; Erik Jones, “The JCMS Annual Review Lecture: European Crisis, European Solidarity,” Journal of Common Market Studies 50 (2012), 53–67. See Rasmussen (Chapter 6) and Davies (Chapter 9) in this volume. Christian Joerges, Europe’s Economic Constitution in Crisis and the Emergence of a New Constitutional Constellation, Working Paper in Transnational Studies, No 06/12, Revised Edition, September 2013, p. 11.

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collective benefits of extending the territorial scope of jurisdictions would continue, with the demand for adjudication for economic disputes contributing to the advancement of market integration.23 As market integration deepened, the relationship between European integration and democratization, as well as welfare state development and national autonomy, has been transformed. The mechanisms of regulatory decision-making and redistribution of material resources at the national level is subject to judicial scrutiny, as the promotion of economic transactions and factor mobility cannot be territorially exclusive. Though this fits with the neo-liberal narrative of reducing transaction costs, promoting liberalization and enhancing consumer choice, it means that the regulation, arbitration and jurisdiction of economic issues is increasingly based on collective decisions negotiated at the European level. The production of public goods in which social welfare and corporate arrangements continued at the domestic level allowed states to maintain path-dependent long-standing models of social policy.24 However, the logic of market integration is not benign; as both the American and European market integration experience illustrates, the role of law constrains and facilitates the actions of different territorial units in core economic areas. In Europe, the increasing constraints over macroeconomic policy underpinned by recent legal judgments25 have undermined national efforts to influence growth and employment, so that the design of crisis management instruments have contributed to declining legitimacy with respect to European institutions.26 The crisis of democracy is one of frustration with elite politics where the accelerated process of de facto integrative deepening without the concomitant increase in democratic legitimacy has generated a populist backlash. European scholars have increasingly adopted revised constitutional narratives, acknowledging a plurality of legal orders and competing legal principles that reflect a codified pluralism in which there are overlapping legal norms that are increasingly at cross-purposes. The result is that law is fundamentally indeterminate in terms of the European market,

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Karen Alter, Establishing the Supremacy of European Law (Oxford: Oxford University Press, 2001). Jonathan Moses “Constitutional Symmetry Enough? Social Models & Market Integration in the US and Europe”, Paper presented at EUSA, Los Angeles, CA, April 2009. Case C-370/12 Pringle. Daniela Schwarzer and Richard Youngs, “Crises in the Euro Area and Challenges for the European Union’s Democratic Legitimacy,” in Seyla Benhabib et al. (eds), The Democratic Disconnect: Citizenship and Accountability in the Transatlantic Community (Washington, DC: Transatlantic Academy, 2013), 33–41.

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blurring the boundaries between national and European jurisdictions, and has become much more contested, challenged and resisted by nation-states and domestic public opinion, as the following examples illustrate.27

parallel narratives: american legal history and contemporary european integration The sovereign debt crisis has exposed the structural weaknesses in some European economies, including high public debt stemming from government profligacy, declining competitiveness and excessive private borrowing. The fiscal austerity imposed on Europe’s peripheral economies deepened their recessions, and generated intense public hostility, as the lingering crisis has cultivated new opportunities for populist extremists. Public trust in the EU has continued to fall to its lowest level ever, doubling over the past six years, with 60 per cent not trusting the EU in 2013 compared to 32 per cent in 2007, before the onset of the crisis.28 Economic concerns have certainly surged to the forefront of the European agenda, but the concerns about balancing social rights and market freedoms, citizenship and boundaries, and political legitimacy and territorial autonomy are not distinctive. The process of market integration in the United States was equally contentious, with significant periods of mass mobilization and opposition to changing economic conditions having important implications for American political development.29 The consolidation of the United States from a plurality of states into a single market in the aftermath of the Constitutional Convention through the eighteenth and nineteenth centuries was a central component of the growth of the American economy. It also marked the transformation of local markets into a national economy in which issues of dependency, anonymity and complexity led to a distinct nineteenth-century commitment to shared obligations and public service provisions in which America’s long history of government regulation fostered a legal narrative that 27

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J. H. H. Weiler, The Constitution of Europe: ‘Do the New Clothes Have an Emperor?’ and Other Essays on European Integration (Cambridge: Cambridge University Press, 1999); Neil Walker, “The Idea of Constitutional Pluralism,” Modern Law Review 65 (2002), 317–59; Matej Avbelj and Jan Komárek (eds.), Constitutional Pluralism in the European Union and Beyond (Oxford: Hart Publishing, 2012). European Commission, “Public Opinion in the European Union,” Standard Eurobarometer 81/ Spring 2014–TNS Opinion & Social (2013), 9 European Commission, Eurobarometer, http://ec.europa.eu/public_opinion/archives/eb/eb79/eb79_first_en.pdf; Vivien Schmidt, op cit http://ec.europa.eu/economy_finance/publications/eedp/pdf/dp015_en.pdf Charles Noble, “Wilson’s Choice: The Political Origins of the Modern American State,” Comparative Politics 17 (1985), 313–36.

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bears strong similarities to contemporary European integration.30 As Europe faces many challenges, legal analysts have focused on the governance crisis that stems from an inability to address issues of accountability, legitimacy and participation due to the disempowering of national institutions and increased constraints as a result of the judicialization of fiscal policy.31 The new fiscal requirements were that states with a total debt exceeding 60 per cent of their GDP must run a structural deficit of no greater than 0.5 per cent of GDP.32 The cost of asking courts to enforce austerity measures has resulted in domestic constitutional challenges in Romania, Portugal, Italy and Greece.33 Though there is some recognition of austerity measures due to the urgency and severity of the economic crisis, a mounting pile of national judgments have rejected some of the measures as applying an undue burden. Although debt crisis and defaults are not new, Europe must face painful debt restructuring, as the pattern of lending booms and busts highlights how what is happening in terms of economic governance echoes nineteenth-century United States. While warships may no longer be the way to ensure payment for debts, the subsequent renewal of capital flows did generate domestic reforms in the United States. Europeans may find it beneficial to consider as a comparative “story” the challenges to the political and legal framework that shaped American market integration. Thus, it is important to understand that the challenges facing Europe were the subject of similar debates in US legal history, whether it was conditional bailouts and debt assumptions, the balance of public regulation and private rights or the edifice of market discipline that emerged in the nineteenth century.34

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Michelle Egan, Single Markets: Economic Integration in Europe and the United States, op cit. See J. H. H. Weiler, “Europe in Crisis – On ‘Political Messianism’, ‘Legitimacy’ and the ‘Rule of Law,’” Singapore Legal Studies 2012, 248–68 and Christina M. Akrivopoulou, “Striking Down Austerity Measures: Crisis jurisprudence in Europe,” Int’l J. Const. L. Blog, June 26, 2013, available at www.iconnectblog.com/2013/06/striking-down-austerity-measures-crisisjurisprudence-in-Europe for examples of the Portuguese and Italian Constitutional courts striking down austerity measures due to their target population and unfair public burden. “European Commission - Press Release - Treaty on Stability, Coordination and Governance in the Economic and Monetary Union.” European Commission Press Release Database. European Commission, 1 Feb. 2012. Web. 30 Oct. 2015. Constitutional Court of Romania, Decision 872/2010, published in the Official Journal 433 of 28.06.2010, available in English at www.ccr.ro/files/products/D0872_101.pdf; Acórdão do Tribunal Constitucional n.º 187/2013, Diário da República, 1.ª série — N.º 78 — 22 de abril de 2013. Michelle Egan, Single Markets: Economic Integration in Europe and the United States, op cit.

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law and markets Acting when other institutions were unable or unwilling to address trade barriers and commercial restrictions, Shapiro argues that courts have played a key role in shaping ideas about the market and the expansion of market relationships.35 To exercise that role, federal courts have to exert their legitimacy as the arbiter of disputes between different governments and reconcile acceptance of federal authority with local interests and preferences. The expropriation of legal authority in both cases has altered patterns of legal rule and played a crucial role in creating and regulating the conditions for the growth of an integrated economy. In both cases, this was not uncontested as patterns of acceptance of federal authority – and the supremacy of law – did encounter state resistance.36 In the United States, the relationship between the Supreme Court and American capitalism is crucial in understanding the formation of a national economy.37 The US Supreme Court sought to promote a national market through negative rather than affirmative action by applying a judicially enforceable restriction on state legislation that discriminated against interstate commerce or put an undue burden on such commerce. Similarly, the European Court of Justice follows a similar logic when distinguishing between permissible and impermissible regulations, and to delineate trade into interstate and local components.38 The effect was to enhance judicial activity in the construction and maintenance of the national market, although the doctrines and principles articulated by the courts were not uniform and were constantly challenged and revised in response to changing terms of trade. Though law opened up opportunities by reducing much of the cost of innovation and entrepreneurship, (by pushing for open markets and competition through addressing trade barriers, negating preferential treatment and challenging vested rights), such action had unintended consequences for 35

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Martin Shapiro, The Supreme Court and Administrative Agencies, ii. New York: Free Press, 1968. Alter 2001 op cit; Goldstein 1997 op cit. Howard H. Gillman, “Reconnecting the Modern Supreme Court to the Historical Evolution of American Capitalism.” In The Supreme Court in American Politics: New Institutionalist Interpretations, ed. H. Gillman and C. W. Clayton. Lawrence: University Press of Kansas, 1999. Richard Bensel, The Political Economy of American Industrialization, 1877–1900. Cambridge: Cambridge University Press, 2000: 327; Donald Kommers and Michael Waelbroeck, “Legal Integration and the Free Movement of Goods: The American and European Experience.” In Integration through Law: Europe and the American Federal Experience, i, ed. M. Cappelletti, M. Seccombe and J. H. H. Weiler. Berlin: Walter de Gruyter, 1985.

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different regions, industries, classes or groups.39 Market rights were at times exclusive, with restrictions imposed on specific groups through differentiated integration, border controls, restrictive property rights and residency laws.

market rights, market integration and market dislocation As there has been a massive loss of confidence in the ability of the European Union as a wave of austerity measures threatens to undermine the social welfare model, market expansion has proved difficult to reconcile with national autonomy in the social sphere. The treaties provided an economic constitution that initially secured high rates of growth and fiscal dividends.40 The welfare state has, since the first and second recessions, shifted from a golden age to a period of permanent austerity,41 in which national welfare systems have been recalibrated to cope with a host of endogenous problems.42 The increasing institutionalization of the four freedoms and competition rules within the EU have, however, eroded national sovereign control over some social measures as compulsory membership in public welfare benefits was tied exclusively to nationality provisions that are increasingly contested.43 Though public insurance monopolies have been upheld by various European Court (CJEU) rulings as exempt from competition rules, European integration has redrawn the boundaries of welfare states through decisions on access, inclusion and portability of benefits.44 Yet, the European Union is not replicating national welfare states at the supranational level. Instead, what has emerged over the past six decades is not social policy, but rather social regulation in which regulatory intervention is geared towards the working environment.45 The EU acts in terms of 39

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Hurst, J. W. Law and the Conditions of Freedom in the Nineteenth-Century United States (Madison: University of Wisconsin Press, 1956). Barry Eichengreen, The European Economy since 1945: Coordinated Capitalism and Beyond (Princeton: Princeton University Press, 2007). Paul Pierson, The New Politics of the Welfare State (Oxford: Oxford University Press, 2001). Maurizio Ferrera, “The European Welfare State: Golden Achievements, Silver Prospects,” URGE Working Paper 4/2007 (2007), 1–25. Case C-120/95, Nicolas Decker v. Caisse de Maladie des Employés Privés, 1998 ECR I-1831; Case C-158/96, Raymond Kohll v. Union des Caisses de Maladie, 1998 ECR I-1931. Case C-333/13, Elisabeta Dano, Florin Dano v. Jobcenter Leipzig, 2014 CLI:EU:C:2014:2358 11, November 2014;Case C-372/04, The Queen, on the application of Yvonne Watts v. Bedford Primary Care Trust and Secretary of State for Health, 2006 ECR I-4376. Giandomenico Majone, “The European Community Between Social Policy and Social Regulation,” Journal of Common Market Studies 31 (1993), 153–70.

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market failures, so that regulations are aimed at addressing negative externalities and information failures in relation to health, safety, consumer protection and environmental measures.46 Though social policy and social regulations are complementary, the lack of European-wide welfare policies allows for a diversity of national welfare regimes. This is similar to the United States where there is a range of welfare regimes allowing states to innovate and experiment with differences that are both enhancing and restricting in terms of eligibility, access and provisions.47 However, it is the historical evolution of social regulation that more directly parallels that of the European Union. Though the United States is often known as a welfare laggard, the nineteenth century saw the growth of government regulations in the areas of public safety, political economy, public property, morality and public health.48 Such a well-ordered society – one which regulates the economy and society licensing and inspection laws, fair marketplace laws and health and sanitary codes and ordinances – has much in common with the social regulation of the EU. In both cases, government regulation is extensive, and public welfare is as important as private rights are, as effort is made to ensure the well-being of “market” citizens in a rapidly changing society. The mechanisms deployed are those of the regulatory state rather than the redistributive state, which were established first at the state level and then subsequently at the federal level, providing an extraordinarily diverse set of regulatory practices and initiatives. Both polities have increasingly scrutinized state regulatory practices in terms of constraints on economic freedoms.49 In Lochner, the Supreme Court held that a law limiting the working hours of bakers was an unconstitutional violation of liberty of contract.50 The implicit limit on legislative power was that it could only properly be used to serve the general welfare, not to benefit “private” interests at the expense of the general public.51 In the EU, state regulation – even the one inspired by goals of social protection – needed to 46

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Michelle Egan, Constructing a European Market: Standards, Regulation, and Governance (Oxford: Oxford University Press, 2001). Thomas Gais and R. Kent Weaver, “State Policy Choices Under Welfare Reform,” CCF Briefs No 21 (2002), 1–7. Novak, The People’s Welfare. Daniela Caruso, “Lochner in Europe: A Comment on Keith Whittington’s “Congress Before the Lochner Court,” Boston University Law Review 85 (2005), 867–79. Lochner v. New York, 198 U.S. 45, 64 (1905). Id.; Howard Gillman, The Constitution Besieged: The Rise & Demise of Lochner Era Police Powers Jurisprudence (Durham: Duke University Press, 1993); Keith E. Whittington, “Keith Whittington: The Troublesome Case of Lochner,” Library of Law and Liberty, March 1, 2002, www.libertylawsite.org/2012/03/01/keith-whittington-the-troublesome-case-of-lochner/

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pose as few constraints as possible upon inter-state trade. Discretionary economic policies seemed illegal and unlawful, as the evolution of jurisprudence focused on establishing an economic constitution with its undistorted competition and economic rationality.52 Yet structural changes in the market, in terms of production and distribution, changing patterns of work, demographics or immigration flows, have broadened the “rationale for the promotion of social rights in Europe in order to guarantee a level playing field and to avoid distortions of competition”.53 Conant views the expansion of EU social rights, addressing the rights of individuals, not only in terms of “market citizenship” through employment rights, working conditions and pay equity but also through new social rights for third-country nationals through family reunification, social protection and assistance schemes as critical for socioeconomic legitimacy.54 This is not dissimilar to the rights revolution in the United States, where different groups gained emancipation or redress, often through courts.55 This rests on a broader process of democratization in which access was expanded through strategic advocacy and lobbying among civil rights groups, for example, or through the transformation of administrative law procedures to challenge administrative actions.56 In Europe, the coexistence of individual freedom of trade and social responsibility in European constitutionalism resulted in a division of labour in which the constituent Member States would be able to continue their

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Christian Joerges, “What Is Left of the European Economic Constitution?” EUI Working Paper Law No. 2004/13 (2004), 1–36. Miguel Poiares Maduro, “Europe’s Social Self: ‘The Sickness Unto Death,’” in Social Law and Policy in an Evolving European Union, ed. Jo Shaw (Oxford/Portland: Hart Publishing, 2000), 325. Lisa Conant, “When Court Decide: Foreigners’ Rights and Social Citizenship in Europe and the US,” European Political Science 7 (2008), 43–51; Case C-200/02, Kunqian Catherine Zhu and Man Lavette Chen v Secretary of State for the Home Department, 2004 ECR I-9925; Case C-578/08, Rhimou Chakroun v. Minister van Buitenlandse Zaken, 2010 ECR I-01839 Case C-34/09, Gerardo Ruiz Zambrano v. Office national de l’emploi, 2011 ECR I-1177. Expansion of new civil rights and liberties, through both statute or case law. Eg 42 U.S.C. § 2000e et seq. - Federal Equal Employment Opportunity - Title VII of Civil Rights Act; 42 U.S.C. § 206(d) - - Equal Pay Act of 1963 - part of Fair Labor Standards Act (FLSA); other examples include racial set-asides in public procurement, special help for minority and women business holders through Small Business Administration, Civil Rights Act of 1991, Pub. L. No. 102–166, 105 Stat. 1071–1100 (codified as amended in sections of 42 U.S.C). The 1961 Monroe v. Pape decision 365 U.S. 167 (1961), in which the US Supreme Court decided that potential civil rights-related court cases could be adjudicated at the federal, rather than state, level is perhaps the best example of this shift in rights. Richard B. Stewart, “The Reformation of American Administrative Law,” Harvard Law Review 88 (1975), 1667–813; Charles R. Epp, The Rights Revolution: Lawyers, Activists, and Supreme Courts in Comparative Perspective (Chicago: University of Chicago Press, 1998), 1–2.

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socially redistributive safety net policies. This constitutional asymmetry has broken down as a result of the privileging of economic issues at the European level.57 Deakin notes that “[r]adical, deregulatory labour law reforms have been demanded of EU member states receiving financial support from the financial ‘Troika’ of the European Commission, European Central Bank and International Monetary Fund.”58 The Court endowed with powers of judicial review has sent a message as strong as Lochner, in relation to the protection of social and labour rights at the state level.59 It is the Lochner type cases that have generated a storm of commentary about overturning social justice legislation in the Viking60, Laval and Rüffert decisions.61 National welfare states are legally and economically constrained by European rules of economic integration, liberalization and competition law, which has impacted their ability to maintain social transfers and made some aspects of welfare provision non-viable in practice.62 The cases of Viking, Laval, and Rüffert seem to confirm Scharpf’s “constitutional asymmetry” in which he described the implications of promoting market efficiencies and policies without corresponding social welfare policies at the European level.63 This decoupling of social and economic rights has been somewhat blurred by the focus on soft law and the open method of coordination as a non-coercive means of promoting social protection. Such an approach uses market mechanisms and economic strategies applied to public governance in ways reminiscent of the original economic constitution, but without uniformity of laws and judicial remedies to foster compliance. Though these new procedural mechanisms, such as benchmarking and best practices, have generated democratic experimentalism, they have not

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Caruso, “Lochner in Europe,” 874. Daniela Caruso argues that Lochner “contains a wealth of valuable insights for contemporary Europe, and prompts fundamental reflections on core problems of EU law.” Caruso, “Lochner in Europe,” p. 871. Simon Deakin, “Editorial: The Sovereign Debt Crisis and European Labour Law,” Industrial Law Journal 41 (2012), 251. See International Transport Workers Federation v. Viking Line ABP [2008] IRLR 143 (C-438/ 05); Laval un Partneri Ltd v. Svenska Byggnadsarbetareförbundet, Svenska Byggnadsarbetareförbundets avdelning 1, Byggettan and Svenska Elektrikerförbundet. C341/05; Dirk Rüffert v. Land Niedersachsen. Case 356/06. See Lindseth this volume. See Ian H. Eliasoph, “A ‘Switch in Time’ for the European Community? Lochner Discourse and the Recalibration of Economic and Social Rights in Europe,” Columbia Journal of European Law 14 (2008), 467–508. See Fritz W. Scharpf, “The European Social Model: Coping with the Challenges of Diversity,” Journal of Common Market Studies 40 (2002), 645 (discussing the constraints European integration places upon states’ welfare policies). Ibid.

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compensated for the dynamic pressures on welfare states from internal market law.64 In fact, Viking and Laval exemplify the unresolved tension between the EU’s strong market imperatives and its fragile social aspirations that make a comparison to Lochner possible. The European jurisprudence that evolved resembled liberty of contract as it favoured negative integration, placing constitutional limits on government “police powers,” unless the regulations were justified by a legitimate Community purpose evoking a Lochner-style “real and substantial” requirement based on proportionality.65 Lochner’s defence of “liberty of contract” was a forerunner to the Court’s current “fundamental rights” jurisprudence. Lochner reminds us that property rights, including the right to pursue a trade or make a voluntary contract, were among those strongly protected rights in the United States in the nineteenth century. As we have focused heavily in the United States and the EU on the modern catalogue of rights claims that tends to prioritize specific social or civil rights, critics have argued that economic liberties should not be relegated to “second order” rights, even if legal doctrines might not always lead to desired normative outcomes.66 A second parallel pertains to public services and communal values in which complementary goals that serve the general interest by promoting social cohesion and equality often conflict with economic liberalization. In the United States, the legitimate role for states to act in terms of the public good was through police powers.67 This evolved through doctrines of public rights in which the public interest or general good evolved in relation to the development of eminent domain and taxation law. Just like their European counterparts, American legal historians have focused on the rights of the 64

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Joshua Cohen and Charles Sabel, “Directly-Deliberative Polyarchy,” European Law Journal 3 (1997), 313–42; Michael C. Dorf and Charles F. Sabel, “A Constitution of Democratic Experimentalism,” Columbia Law Review 98 (1998), 267–473. Sunday trading laws are an example of a law that violates liberty of contract. See Eliasoph, “A ‘Switch in Time’;” Joined Cases 60 and 61/84, Cinéthèque SA and others v Fédération nationale des cinémas français, 1985 ECR 2605; Case 145/88, Torfaen Borough Council v. B & Q plc., 1989 ECR 3851. Fernanda Nicola, “Conceptions of Justice from Below: Distributive Justice as a Means to Address Local Conflicts in European Law and Policy,” in Europe’s Justice Deficit?, eds. Dimitry Kochenov et al. (in press); Charles W. McCurdy, “The ‘Liberty of Contract’ Regime in American Law,” in The State and Freedom of Contract, ed. Harry N. Scheiber (Stanford: Stanford University Press, 1998), 161–97; David N. Mayer, “Substantive Due Process Rediscovered: The Rise and Fall of Liberty of Contract,” Mercer Law Review 60 (2009), 566. For a discussion of the origins of the public purpose doctrine, see Harry N. Scheiber, “The Road to Munn: Eminent Domain and the Concept of Public Purpose in the State Courts,” Perspectives in American History 5 (1971), 327–402.

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public and the concepts of the “collective good” or the “public interest” in shaping economic outcomes.68 Public rights were as significant in nineteenth-century legal discourse as vested rights were. Just like in Europe, case law did not focus only on instrumentalism in terms of economic development and market rights; legal doctrine also emphasized the role of police powers and public rights, in which the doctrine “affected with a public interest” bears a strong resemblance to the public service doctrines espoused by Member States of the European Union.69 In the United States, the effort to serve communal values or societal interests through public trust in the area of eminent domain and police powers were indicative of the effort to promote the “public good” in a society undergoing rapid social and economic change.70 States were developing a legal system of crucial importance for economic development, especially in the realm of eminent domain where state courts extracted significant subsidies and denied remedies to property owners for public purpose.71 States also delegated the rights of expropriation to companies in the public interest72. Courts argued that public goals of economic development and entrepreneurship were more important than vested rights were.73 Judicial decisions regarding notions of public rights, though not always uniform, were often used as a foundation for government legitimacy for state regulatory authority, and the doctrine of public trust that certain resources were held by the government regardless of whether they were pueblo lands, navigable rivers, mineral lands or against the claims of individuals and government itself validated state initiatives.74 Both polities have confronted conflicts in which they have sought to maintain some semblance of “positive rights”, thereby allowing sovereign entities

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Harry N. Scheiber, “Public Rights and the Rule of Law in American Legal History,” California Law Review 72 (1984), 217–51. In EU, case law has recognized services of a general interest to prevail over competition; see articles 16 and 86 and article 36 of the Charter of Fundamental Rights. Ibid; Novak, The People’s Welfare. Under the Fifth Amendment, the “Takings Clause” provides that if the government seizes private property, property’s owner must receive fair compensation. Olcott v. the Supervisors 83 US 678 (1872). However, there is also a public rights doctrine in which the use of private rights may also be constrained so that it does not constrain community. Property could be taken by railroad, canal or bridge companies, even if private entities, as they were considered serving a public purpose. Harry N. Scheiber, “Public Rights and the Rule of Law in American Legal History,” California Law Review 72 (1984). Alberta M. Sbragia, Debt Wish: Entrepreneurial Cities, U.S. Federalism, and Economic Development (Pittsburgh: University of Pittsburgh Press, 1996). Harry Scheiber, Public Rights and the Rule of Law in American Legal History, Calif. L.R. 72 (1984) 225–26.

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to exercise control over utilities, water and transportation resources in the public interest.75 This notion of regulating public welfare is important in understanding legal decisions shaping subsequent market liberalization efforts in Europe. Through its competence in competition law, the European Commission can confront national regulations that are not in conformity with principles of EU competition law.76 Certain industries were insulated from competition due to their general-interest goals, as they were designed to ensure accessibility, equality, continuity, security and affordability of public services.77 Many of these network industries were shielded from competition, as the provision of energy, water, communication and transport was deemed an essential public function. Successive legal challenges to the existing framework in which public services were exempt from treaty obligations shifted the legal narrative from one of exemption to competition. As Schmidt notes, “European law draws a distinction between the different market freedoms, which prohibit the discrimination of cross-border market transactions, and the competition rules, which safeguard the competitive order of markets.”78 The network industries found themselves subject to intense scrutiny, as their poor performance, increasing cost and inefficiencies led to pressure for privatization, deregulation and liberalization. Despite the progressive liberalization of markets and privatization of public holdings, state guarantees were bolstered by Court rulings in which the legal narrative ensured the importance of general economic interests in the provision of services by recognizing public service obligations that were shielded from the full force of market competition.79 As the European Commission has sought greater market liberalization, often generating diverse preferences among Member States, the Court has asserted itself into the debate to determine the boundaries between free trade and welfare, culture and public goods values in Member States.80 Determining

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See Arnold v. Mundy, 6 NJL 1 (1821); Case 320/91 Criminal proceedings against Paul Corbeau (1993) I 2533 (1993); case 393/92 Municipality of Almelo I 1477 (1994). See Warlouzet (Chapter 14) in this volume. Adrienne Héritier, “Market Integration and Social Cohesion: The Politics of Public Services in European Regulation,” Journal of European Public Policy 8 (2001), 171–89. Susanne K. Schmidt, “Only an Agenda Setter? The European Commission’s Power over the Council of Ministers,” European Union Politics 1 (2000), 45. In Corbeau (Case C-320/91 Corbeau [1993] ECR I-2533) and Almelo (Case C-393/92. Municipality of Almelo and Others v. Energiebedrijf IJsselmij NV) a restriction on competition can be justified. Services of a General Economic Interest can be exempt from competition on basis of public interest and provide intervention in key sectors without violating competition rules. Héritier, “Market Integration.”

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whether certain types of economic operators, including those providing collective goods along non-market lines, will be allowed to exclude operators from other Member States highlights the growing conflict of laws in Europe, especially as many public enterprises not only provide public services but also engage in business activities that compete with the private sector. Similarly, the recent sovereign debt crisis where states have taken action to support banks through capital injection state guarantees or nationalization has shifted the debate towards addressing unprecedented debt burdens and unfunded liabilities. While government interventions can be permitted in response to serious economic disturbances, the debt assistance effectively shields banks from state aid rules. Much like public services, the balance between economic policy priorities and broader social and public interest goals is often at cross-purposes. Third, the problem of fiscal discipline in federations is salient in both the United States and the EU as there has been considerable debate about the assumption of debt, and whether fiscal decisions would be governed by market discipline or administrative intervention and control. In Europe, the recent sovereign debt crisis is blamed on easy access to credit, which enabled southern states to borrow at favourable rates, as rating agencies were clearly bolstering their evaluations of the creditworthiness of the weaker Member States by assuming an implicit guarantee of bailouts.81 Although European and national authorities reacted quickly with emergency measures to safeguard the monetary, banking and credit systems to prevent large banks and firms going bankrupt, the focus was on crisis management with significant efforts to promote domestic structural reform to enable states to assume manageable public debt.82 The crisis generated structural rifts between creditor and debtor states within the Eurozone. Debtor countries were required to pay substantial risk premiums for financing their debt, generating significant political tensions. This is not dissimilar to nineteenth-century United States where unexpected revenue shortfalls from canal and bank investments led to nine states defaulting on their debts, four repudiating all or part of their debts, and three going through substantial renegotiations in the 1840s.83 Without access to new revenue sources, these states were forced to default, and then 81

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Matthias Mattijs, “Mediterranean Blues: The Crisis in Southern Europe,” Journal of Democracy 25/1 (January 2014), 101–15. Emergency liquidity to banking sector and bailouts were coupled with reinforcement of fiscal policy, as policy and institutional support mechanisms to purchase sovereign debt to stabilize banking system. John Joseph Wallis et al., “Sovereign Debt and Repudiation: The Emerging-market Debt Crisis in the U.S. States, 1839–1843,” NBER Working Paper No. 10753 (1997), 1–45.

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either renegotiate or repudiate their debts.84 Consequently, American states agreed to repay their foreign creditors even after these creditors were prevented from seeking redress in federal courts, as states needed access to capital markets.85 States viewed themselves as the most appropriate borrower on behalf of both public and private enterprises. Consequently, state and local governments were risk takers, promoting internal improvements, and needed to establish the legal right of eminent domain.86 Foreign loans were built on the faith of the state as guarantor as European investors assumed that the federal government would assume state debts. Yet, in a situation similar to that of the contemporary European crisis, there was concern in the United States that assuming the debt of indebted states would penalize those non-indebted states that were more fiscally prudent. States in the nineteenth century were caught unprepared by the economic downturn, and in many instances, states were unwilling to raise taxes to meet their debt service obligations, since their lack of electoral responsibility for macroeconomic performance fostered overspending.87 In response, states enacted procedural debt restrictions to restrict state borrowing, with one state after another instituting a debt limit in their constitution. State constitutional amendments restricting state borrowing led to self-imposed limits in the United States.88 As a result, government borrowing shifted to the local level. Local governments used the creativity of the market to circumvent limits on their borrowing, creating new financial instruments that were not subject to state constitutional debt limits, until states extended procedural restrictions to local governments, making it harder for local governments to borrow.89 The legal changes emerging from the European debt crisis follow a similar narrative. There are restrictions or limitations on government borrowing, and measures put in place that require a balanced budget and sometimes require that the budget be passed following certain procedures so that legislatures and voters are more cognizant of states – such as Greece – taking advantage of their creditworthiness due to their membership in the Eurozone to get heavily into debt. Despite the assumption that the growth and stability pact would

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Ibid. William B. English, “Understanding the Costs of Sovereign Default: American State Debts in the 1840s,” American Economic Review 86 (1996), 259–75. Sbragia, Debt Wish. Jonathan Rodden and Erik Wibbels, “Beyond the Fiction of Federalism: Macroeconomic Management in Multitiered Systems,” World Politics 54 (2002), 495. Alberta Sbragia, Debt Wish (Pittsburgh: University of Pittsburgh Press, 1996). Isabel Rodriguez-Tejedo and John Joseph Wallis, “Lessons for California from the History of Fiscal Constitutions,” The California Journal of Politics and Policy 2 (2010), 1–19.

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constrain fiscal autonomy in Europe, the debate over fiscal reform is familiar to the United States, where circumvention allowed for fiscal profligacy. No one state wanted to bail out another, and the federal government opted for a no-bailout stance.90 Yet, the no-bailout rule fell with the Greek crisis, and a permanent bailout mechanism (ESM) was created.91 In the EU, judicially enforceable fiscal rules have been viewed as crucial with the signing of a Fiscal Compact Treaty.92 However, if the US experience is used as a reference point, it is bond markets rather than courts that have a greater disciplining effect by demanding higher yields and thus higher borrowing costs.93 The effort to incorporate a judicial mechanism by enforcing these debt brakes and budget rules in national courts judicializes fiscal policy in the EU. However, the effectiveness of market discipline between the two is likely to differ, as the EU provides bailouts through the ESM, so its narrative of fiscal prudence under the shadow of the law is weaker, as constraints are not binding if national units can appeal to the centre for additional resources if the disciplining effect of markets is undermined.94 While the United States is a banking union, providing more shock-absorbing capacity for states under duress through federal insurance guarantees, the Euro area has partially followed suit and has now has adopted a common system for handling bank crises. Both are aimed at enhancing regulatory capacity to deal with investment risks, although, as Hallerberg concludes, there remain important structural differences between the United States and the EU.95 States autonomously adopted restrictions and independently implemented them, in contrast to debt-ridden states in Europe that were subject to externally imposed debt brakes mandated by the Union and enforced by the Commission and the European Court of Justice. 90

91

92 93

94 95

Though the federal government had assumed states’ obligations after the War of Independence, states assumed what had happened in 1790 would be repeated, but US Congress balked in 1841 at the prospect of providing a federal guarantee for states’ excess borrowing and fiscal profligacy. “European Commission - Press Release - TREATY ESTABLISHING THE EUROPEAN STABILITY MECHANISM (ESM).” European Commission Press Release Database. European Commission, 1 Feb. 2012. Web. 31 Oct. 2015. Treaty on Stability, Coordination and Governance in the Economic and Monetary Union R. Daniel Kelemen and Terence K. Teo, “Law, Focal Points, and Fiscal Discipline in the United States and the European Union,” American Political Science Review 108 (2014), 355–70; Alberta Sbragia, Debt Wish (Pittsburgh: University of Pittsburgh Press, 1996). Ibid., 367. Mark Hallerberg, “Why Is There Fiscal Capacity but Little Regulation in the US, but Regulation and Little Fiscal Capacity in Europe? The Global Financial Crisis as a Test Case,” in Beyond the Regulatory Polity: The European Integration of Core State Powers, eds. Philipp Genschel and Markus Jachtenfuchs (Oxford: Oxford University Press, 2014), 100.

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The emergence of interlocking commerce and investment across borders compelled the United States and the EU to create new powers within their borders – powers to intervene in market forces to soften the economic crises and restore economic growth and prosperity. The need to assure an acceptable distribution of benefits among states and classes has led both polities to consider the social impact of their respective economic development. Crossborder markets do not emerge spontaneously when territorial interests are strong; a non-majoritarian institution such as a court is necessary to either subordinate territorial interest to foster market creation or to create a credible legal deterrent so that legislators establish common regulatory standards that apply uniformly across all jurisdictions within a common market. The European Court (CJEU) has not found it easy to avoid many of the problems that bedevilled the Supreme Court when trying to resolve tensions inherent in judicial review, wrestling with the reconstitution of authority and dealing with the impeding trade restrictions between jurisdictions in order to balance acceptable legitimate public policy objectives against discriminatory practices to constitute internal markets.

conclusion The chapters in this volume emphasize that context ‘matters’ and that looking at the individual stories behind European cases provides a much more nuanced understanding than is often found in case law textbooks. Rather than narrative syntheses, based on founding myths and progressive values, their critical legal scholarship places the resulting outcomes in a broader socioeconomic context that can lead to tensions and conflicts rather than normative ideals. The reevaluation of the role of law in both facilitating and constraining market integration suggests it should not be seen in monist terms leading to constitutional obedience, but rather should be linked to the power of political ideas where changes in markets, technology and social practices led to the adaptation of legal policy instruments, settings and norms. This more contingent view of law fits with the work of APD where there are different temporal speeds and logics to integration that is contrary to the expectations of functionalism. Judicial authority is crucial for the power and authority of the regulatory state, and courts have exercised implicit and explicit authority to shape the relationship between social rights and market freedoms and the distribution of power and competences both vertically and horizontally.96 Yet 96

Mark Gilbert, “Narrating the Process: Questioning the Progressive Story of European Integration,” Journal of Common Market Studies 46 (2008), 641–62; Novak, “Constitutional Theology,” 651.

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in considering the instrumentality of law in creating and regulating the conditions for the consolidation of the market economy, the European case is neither unique nor exceptional. Many of the same dilemmas facing Europe have also been debated in the United States as it sought to establish a crossjurisdictional market in which different legal interpretations played a role in shaping the dynamics of material growth and innovation, the balance between social rights and economic freedoms and the relationship between different constituent units. The consolidation of the United States from a plurality of states into a single market in the aftermath of the Constitutional Convention through the eighteenth and nineteenth centuries was a central component of the growth of the American economy. It also marked the transformation of local markets into a national economy in which issues of dependency, anonymity and complexity led to a distinct nineteenth-century commitment to shared obligations and public service provisions in which America’s long history of government regulation fostered a legal narrative that bears strong similarities to contemporary European integration. Though production, investment and trade increased throughout the nineteenth century, the industrial economy produced greater economic inequalities and regional disparities as the United States consolidated into a national market. As Europe faces many challenges, legal analysts seem to have focused on the governance crisis that stems from an inability to address issues of accountability, legitimacy and participation.97 It is important to understand that the challenges facing Europe were the subject of similar debates in US legal history, whether it was conditional bailouts and debt assumptions, the balance of public regulation and private rights or the edifice of market discipline that emerged in the nineteenth century. In both cases, courts have played a strong role in shaping the boundaries between national, local and regional markets, though the transition was gradual and uneven and necessitated changes in legal and constitutional doctrines in response to the transformation of the economy. Yet legal outcomes were not benign in their effect, as law also marginalized and excluded certain groups from participating in the market. As such, we should be more cautious about the narratives that have emerged in relation to European integration, rather than assuming that the legal concepts that emerge are essential and progressive in that no other alternatives were

97

J. H. H. Weiler, “Europe in Crisis – On ‘Political Messianism’, ‘Legitimacy’ and the ‘Rule of Law,’” Singapore Legal Studies 2012, 248–68.

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feasible.98 What European and American jurisprudence over many decades has made clear is that narratives are infused with both political and legal authority; the story the Court creates needs to be both persuasive and factual. However, the interpretations of those judgments are equally salient, given the symbolism that is often attributed to specific cases. A great deal of constitutional meaning is achieved outside of the courts through other political actors.99 These actors are equally important as they can frame the discourse and provide the foundation for political action. The discourse of market freedoms, market citizenship, public services and social solidarity plays an important role in showing how legal principles play a cross-national function in integrating markets. The debate on whether markets and competition will prevail or whether other values will be part of the effort to address the regulatory failures of states and overcome the sectionalism and conflict that has segmented markets, created trade barriers and increasingly created a populist backlash can benefit from the US comparison. Regulatory authority and social protection was initially provided at the state level, then federalized, driven by the pressures for an integrated market for goods and services. Constitutional asymmetry is difficult to maintain in federal systems; state-based social models face pressures from regulatory competition, police powers become nationalized in order to provide social regulation and protection, and divergent state laws face pressures for uniformity to prevent discrimination as regulatory heterogeneity can have a negative impact on trade.

98

99

Mark Gilbert, “Narrating the Process: Questioning the Progressive Story of European Integration,” Journal of Common Market Studies 46 (2008), 641–62; Novak, “Constitutional Theology,” 651, 656. Keith E. Whittington, Constitutional Construction: Divided Powers and Constitutional Meaning (Cambridge, MA: Harvard University Press, 1999), 5, 16.

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part vii

Conclusion

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29 Learning from EU Law Stories The European Court and Its Interlocutors Revisited

mark pollack

Most students of law, including European Union (EU) law, learn about the structure and substance of that law by studying doctrine, found in constitutional and legislative texts, and above all in the record of court cases, carefully compiled and presented to generations of students in casebooks. Such presentations of the case law deliberately strip away the particularities of individual cases – the circumstances and motivations of litigants, the strategies and tactics of their lawyers, the motives and arguments of third parties before the court and the reception of the court’s decision by the various parties and stakeholders – in an effort to identify the essential doctrinal arguments that emerge from landmark decisions. In so doing, however, traditional EU law casebooks run the risk of presenting a teleological and celebratory narrative of European law, a “march of progress” towards the integrated and unified EU legal order of today.1 They also present a version of the law that is, or can be, strangely bloodless. Reviewing the bound volumes of case reports of US Supreme Court decisions, Justice Oliver Wendell Holmes famously remarked that “[i]t is strange to think of that monotonous series as a record of human lives,”2 because those lives are at best glimpsed, and at worse obscured, in the briefly encapsulated “facts of the case” in each 1

2

The “march of progress” formulation comes from Michael C. Dorf, describing the US Supreme Court in “Putting the People Back in ‘We the People,’” in Michael C. Dorf, ed., Constitutional Law Stories (New York: Foundation Press, 2004), pp. 1–12, at 4. Yet a similar picture, of the CJEU driving the process of legal integration towards an ever-closer Union, can be found to varying degrees in the canonical “integration through law” studies, such as Eric Stein, “Lawyers, Judges, and the Making of a Transnational Constitution,” American Journal of International Law, 75 (1981): 1–27; and M. Capelletti, M. Seccombe and J. H. H. Weiler (eds.), Integration through Law: Europe and the American Federal Experience (New York: De Gruyter, 1986). Oliver Wendell Holmes, quoted in David Luban, “Introduction,” in Deborah L. Rhode and David Luban, eds., Legal Ethics Stories (New York: Foundation Press), pp. 1–15, at 1.

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decision. Much the same could be said of even the best casebooks on EU law, which tend to reduce flesh-and-blood litigants to abstract legal principles like supremacy, direct effect and non-discrimination.3 This book, and the many rich contextual accounts that make it up, take a different approach. In this volume, many of the world’s leading scholars of EU law revisit the landmark cases of the Court of Justice of the European Union (CJEU), engaging not only the doctrinal pronouncements of the Court’s magisterial decisions but also the social, political, cultural and legal contexts of those decisions. In these pages, we learn about the stories, motivations and actions of litigants; the strategies and tactics of their lawyers; the national judges who send so-called preliminary references to the CJEU; the multiple roles of the European Commission as litigant, friend of the Court and perpetual “repeat player”; the often strenuously argued advocacy of the EU’s member governments; the handling of the case by the EU’s Advocates General, judges and clerks; and the reactions of litigants, national courts, governments and the “invisible college” of European lawyers who debate, accept, contest or defy decisions once they are handed down from Luxembourg. These are the stories, obscured in the official case record and excavated here by scholars from history, law, sociology and political science, that form the heart and the contribution of the current volume. Why tell EU law stories? On one level, the answer is obvious: telling the stories behind famous cases reveals the “real and vivid” human beings behind the cases, “with their colorful characters, their complex motivations, and their all-too-frequent ambiguity”.4 And indeed, the EU law stories contained in this volume can be approached precisely as stories, as “ripping yarns” that bring to light fascinating characters like Mrs. Man Lavette Chen, the litigant who sought to draw on EU law in her effort to remain in Europe with her UK-born child5; or Lord Anthony Lester, the US-trained British barrister who sought to extend the right of equal pay and non-discrimination for his client in Jenkins v. Kingsgate.6 This volume is replete with such stories, and, as such, constitutes an ideal supplement to traditional EU law casebooks, with their dry focus on doctrine. But – and here is the burden of this brief concluding chapter – these EU law stories constitute far more than a spoonful of human interest to help the doctrine go down. Instead, I argue, these stories, when taken in conjunction with the growing body of interdisciplinary scholarship that places the CJEU 3 4 6

See the excellent discussion by Antoine Vauchez (Chapter 2) in this volume. 5 Luban, “Introduction,” at 1. Kochenov and Lindeboom (Chapter 11) in this volume. Tourkochoriti (Chapter 22) in this volume.

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and its rulings in context, provide important new insights into the role of the Court and its many interlocutors7 in the decades-long and still unfolding story of EU legal integration. More precisely, the many law stories in this volume illustrate both broad trends as well as diversity in the motivations, tactics and strategies of the Court’s various interlocutors, including the private litigants and lawyers who have brought so many cases; the national judges who submit (or fail to submit) preliminary references to the Court and apply (or contain, or defy) the resulting rulings; the EU’s various institutions, particularly the Commission, as the ultimate, integrationist repeat player before the Court; and the member government officials who appear before the Court as litigants and as amici, and which later implement (or contain, or defy) its rulings.8 To be sure, any insights or lessons from these stories must be drawn cautiously, because the cases examined here do not constitute a representative sample of all CJEU cases, but were instead selected on the “dependent variable” of their subsequent importance to the development of EU constitutional and substantive law.9 As with other law stories collections, the editors of this volume have rightly sought to revisit many of the Court’s “landmark” cases that were particularly important in the development of different bodies of EU law and highlighted in more traditional casebooks.10 We cannot, therefore, draw causal or even descriptive inferences from these cases to the much larger body of CJEU jurisprudence, the bulk of which is more prosaic and rarely breaks fundamentally new legal ground. The value of these stories, therefore, lies not in their representativeness but in their richness – in their ability to place the court and its cases in context, and show the Court interacting with litigants, lawyers, national courts, the European Commission and Parliament, EU member governments and the broader legal community. 7

8

9 10

The term is Joseph Weiler’s. See J. H. H. Weiler, “A Quiet Revolution: The European Court of Justice and its Interlocutors,” Comparative Political Studies (1994), 510. For a different take on the Court’s interlocutors, see Antoine Vauchez’s discussion, in this volume, of “epistemic alliances” of various types of actors (civil servants, diplomats, legal advisors, scholars and others) with disparate interests, coming together around specific cases. Ibid. See also Alec Stone Sweet, “The European Court of Justice and the Judicialization of EU Governance,” Living Reviews in European Governance 5/2 (2010), www.livingreviews.org/lreg2010-2, at 5. Antoine Vauchez (Chapter 2) in this volume. The cases examined in this volume therefore include many of the landmark cases of the traditional canon, and cover many of the traditional subject areas – including the constitutionalization of the treaties as well as human rights, citizenship, the internal market, competition, corporate and private law, gender and anti-discrimination and EU foreign relations law – examined in traditional casebooks. The volume also includes several other cases – such as Tessili, Oceano Grupo and Wijsenbeek – that have been neglected in the literature but are revealing with respect to the Court and its interlocutors.

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Excavating the stories of these interlocutors demonstrates them to be, indeed, “colorful characters” with “complex motives” that enrich and sometimes challenge our often unexamined assumptions about the individual and corporate actors whom we have previously glimpsed only fleetingly and hazily in the Court’s brief, dutiful recitations of “the facts” in each case. In their introduction to this volume, Bill Davies and Fernanda Nicola argue that EU law stories are characterized by two core features: they are, to varying degrees across the various chapters, both contextual and critical. They are contextual insofar as they place the doctrinal pronouncements of the Court in their political, economic and social context, and insofar as they provide insights into the activities and motivations of the Court’s various interlocutors. They are critical insofar as they seek to denaturalize the existing narrative of the Court’s case law. Indeed, Davies and Nicola point out, however much existing casebooks (and, indeed, the judges themselves) may present CJEU rulings as the logical (or inevitable) unfolding of the treaties, all of the decisions in this volume were in fact contingent on the actions and arguments of a string of actors, from the litigants and lawyers who identified a possible violation of EU law, to the national judges who saw fit to submit preliminary references to the Court, to the amici who weighed in with both legal arguments and political signals, and ultimately to the Advocates General and judges whose judicial discretion, though frequently concealed in their terse rulings, occasionally shines through the historical records unearthed here. This brief chapter cannot, of course, explore all of these issues, but instead focuses on the insights derived from the stories with respect to four sets of interlocutors: (1) litigants and their lawyers, with their diverse and sometimes surprising motivations, tactics and strategies; (2) national judges, whose decisions to submit preliminary references were by no means preordained; (3) the European Commission as the Union’s integrationist repeat player; and (4) the member governments which weighed in both before the Court and after its judgments. In each case, I suggest, the findings of these law stories can and should be read in conjunction with the growing body of work in EU legal history,11 political

11

For an introduction to and review of this “new EU legal history”, see, respectively, Bill Davies and Morten Rasmussen, “Towards a New History of European Law,” Contemporary European History 21/3 (2012), 305–18; and Mark A. Pollack, “The New EU Legal History: What’s New, What’s Missing?” American University International Law Review 28/5 (2013), 1257–1310. The law stories in this volume are strongly informed (and in some cases written) by the leading scholars in this historical school, yet the majority of prior studies from the small group of specialist EU legal historians does not center on individual cases, focusing instead on broader historical movements or on the central role played by critical actors and institutions.

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science12 and the sociology of law,13 which has begun in recent years to address a wide range of questions about the Court and its interlocutors. I conclude (5) with a final discussion of the Court itself, which I argue is beginning to yield some insights into its internal workings, yet remains at its most impenetrable precisely with respect to the specific stories that we want to tell about it.

litigants and lawyers Courts, we are often told, are not self-activating: they first require litigants to find a question of law requiring clarification and then bring a case to court. The jurisdiction of the CJEU is complex, but most EU law cases – including the landmark cases reviewed in this book – come to the Court through three paths. First, the treaties grant the European Commission, as the “guardian of the treaties,” the power to open “infringement proceedings” or enforcement actions against EU member governments for failure to comply with EU law. Such enforcement actions are represented in this volume by a handful of cases, including the 1964 case of Commission v. Luxembourg and Belgium,14 the Commission’s 2012 challenge to Hungary’s firing of several hundred judges on grounds of age discrimination,15 and a string of cases that helped to develop and secure the EU’s nascent Common Fisheries Policy.16 12

13

14 16

See e.g. the excellent reviews in Lisa Conant, “Review Article: The Politics of Legal Integration,” Journal of Common Market Studies 45/1 (2007), 45–66; Karen J. Alter, “The European Court and Legal Integration: An Exceptional Story or Harbinger of the Future?” in Keith E. Whittington, R. Daniel Kelemen and Gregory A. Caldeira, eds., The Oxford Handbook of Law and Politics (New York: Oxford University Press, 2008), pp. 209–28; and Stone Sweet 2010. The literature on the sociology of EU law, and of international courts, has grown impressively in recent years. For several landmarks, see e.g. Antonin Cohen and Antoine Vauchez, eds., “Symposium: Law, Lawyers, and Transnational Politics in the Production of Europe,” special issue of Law & Social Inquiry 32/1 (2007), 75–199; Antonin Cohen and Antoine Vauchez, “The Social Construction of Law: The European Court of Justice and Its Legal Revolution Revisited,” Annual Review of Law and Social Science 7 (2011), 417–31; Mikael Rask Madsen, “Sociological Approaches to International Courts,” in Cesare P. R. Romano, Karen J. Alter and Yuval Shany, eds., The Oxford Handbook of International Adjudication (Oxford: Oxford University Press, 2013), pp. 388–412; Antoine Vauchez and Bruno De Witte, eds., Lawyering Europe: European Law as a Transnational Social Field (London: Hart, 2013); Antoine Vauchez, Brokering Europe: Euro-Lawyers and the Making of a Transnational Polity (New York: Cambridge University Press, 2015); and Mikael Rask Madsen and Urska Sadl, “A Selfie from Luxembourg: The Court of Justice and the Fabrication of the Pre-Accession Case-Law Dossiers,” Columbia Journal of European Law (forthcoming). 15 Phelan (Chapter 7) in this volume. Halmai (Chapter 24) in this volume. Temple Lang (Chapter 16) in this volume. For more on the Commission, see below.

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Second, the treaties provide standing for EU institutions, Member States, and a very limited class of private litigants to bring actions for annullment of EU legislation and regulations for violation of broader “constitutional” or treaty law. Here again, we find several stories in this volume that began as annullment actions, by private actors against a Commission antitrust ruling in GrundigConsten and Philip Morris,17 by the Greens political group against the European Parliament in Les Verts,18 and by the Parliament against the Commission and Council with respect to EU-US Passenger Name Records agreement.19 The majority of all CJEU cases, however, and of the cases collected in this volume, came to the Court through a third route, the “preliminary reference procedure” of Article 267 TFEU (originally Article 177 EEC), whereby individual litigants invoke EU law before their national courts, which may in turn submit questions of European law to the CJEU. Lower courts are not required to submit preliminary references the CJEU, but they are entitled to do so, and many of the cases in this book originated in such lower courts. By contrast, Article 267 provides that, where a question of EU law is raised before a national court against which there is no possibility of appeal, that court must submit the question for a preliminary ruling by the CJEU. It has become commonplace in EU legal scholarship to argue that the preliminary reference procedure, when combined with the doctrines of direct effect and EU legal supremacy, has “fostered a kind of indirect alliance between the private litigants and pro-integration forces,” with litigants claiming rights under EU law, and with the Commission and the Court seizing on those claims to offer new and far-reaching interpretations of EU legal texts.20 Sociologists, meanwhile, have recently begun to examine the emergence of transnational legal fields, which comprise the judges at international and European courts, the members of the international bar who argue cases before such courts and the wider “invisible college of lawyers” who read, interpret and debate international legal decisions.21 In the EU context, Antoine Vauchez and his colleagues have analyzed the emergence of what they call a “weak field” of European law, and the characteristics of lawyers who brought cases on behalf of litigants before those courts.22 Following in the

17 19 20

21 22

18 Warlouzet (Chapter 14) in this volume. Boerger and Davies (Chapter 5) in this volume. Fahey (Chapter 27) in this volume. Renaud Dehousse, The European Court of Justice: The Politics of Judicial Integration (Houndmills: Palgrave, 1998), at 47. For an excellent discussion, see Madsen 2013: 399–401. Antoine Vauchez, “The Force of a Weak Field: Law and Lawyers in the Government of the European Union (For a Renewed Research Agenda),” International Political Sociology 2/2 (2008), 128–44.

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footsteps of Bryant Garth and Yves Dezalay, these scholars have collected vast quantities of data, creating “collective biographies” of the lawyers who have appeared to argue before the Court, and demonstrating, for example, that the vast majority of such lawyers were “one-shotters,” rather than “repeat players,” in the EU legal order.23 The law stories collected in this volume, although again not a representative sample of CJEU cases, provide valuable glimpses into the motivations, tactics and strategies of both litigants and their lawyers. Many of these litigants we see in these stories are classic rights-claiming European citizens, asserting rights under EU law and looking for the Court to affirm that, indeed, such rights inhere in the treaties and in EU secondary legislation. A substantial number sought to secure recognition of their free-movement rights, including the private firm of Van Gend en Loos seeking relief from import tariffs24; the German importer Rewe seeking to import the French liqueur Cassis de Dijon25; the French student Ms. Gravier asserting her right as an EU citizen to receive an education in Belgium without paying a (discriminatory) additional fee traditionally charged to foreigners26; and, most controversially, the Viking cruise line, seeking to place limits on the activities of trade unions that it claimed interfered with the company’s right of establishment in another EU Member State.27 Other litigants, most notably Mr. Francovitch and Mrs. Jenkins, were asserting EU-protected social rights against their employers,28 while still other cases addressed the rights of non-EU nationals, such as Mrs. Chen, who sought to secure her right to remain in the EU by virtue of her connection to her infant daughter, an EU citizen born in Northern Ireland29; Mr. Zambrano, who sought recognition of his rights as the father of a Belgian-born son30; and Mr. Melki and Mr. Abdeli, the Algerian sans papiers controversially detained near the French-Belgian border.31 In some of cases, the litigants and their lawyers brought cases with the explicit aim of pushing forward the progress of European integration, as in the case of Florus Ariël Wisjenbeek, the Dutch Member of the European 23

24 26 28

29 30

See e.g. Christele Marchand and Antoine Vauchez, “Lawyers as Europe’s Middlemen: A Sociology of Litigants Pleading to the European Court of Justice,” in Jay Rowell and Michel Mangenot (eds), A Political Sociology of the European Union: Reassessing Constructivism (New York: Palgrave Macmillan, 2008), pp. 68–87; and Vauchez, Brokering Europe, especially chapter 2. 25 Rasmussen (Chapter 6) in this volume. Nicolaidis (Chapter 15) in this volume. 27 Gori (Chapter 23) in this volume. Lindseth (Chapter 25) in this volume. Bartolini and Guerrieri (Chapter 18) and Tourkochoriti (Chapter 22), respectively, in this volume. Kochenov and Lindeboom (Chapter 11) in this volume. 31 Strumia (Chapter 12) in this volume. Caruso and Geneve (Chapter 26) in this volume.

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Parliament who defiantly refused to show his passport at Rotterdam airport in an effort to secure through judicial means the abolition of internal border controls that were blocked by the EU’s political process.32 In many other cases, however, litigants’ invocation of EU law appears opportunistic, with both litigants and their lawyers seeking not to develop EU law, but to find legal remedies in EU law, and in some cases also European human rights law, that are otherwise unavailable in their national legal orders. In the case of Centro Europa 7, for example, the owners of a television channel successfully bid for the right to broadcast using a frequency previously used by the Mediaset channel owned by Prime Minister Silvio Berlusconi, only to be kept off the air for years through the foot-dragging of the Italian state. After repeated setbacks in the Italian parliamentary and judicial arenas, CE7 sought to assert its rights, first under EU law, where it claimed that Italian state’s actions violated treaty provisions on the freedom to provide services as well as the Union’s framework directives on the media, and later under European Human Rights Law, where it argued successfully before the European Court of Human Rights (ECtHR) that Italy had violated Article 10 of the European Convention guaranteeing freedom of expression.33 Gábor Halmai’s chapter explores a very different case, that of the 274 judges forced into early retirement when Hungary’s ruling Fidesz party pushed through constitutional amendments lowering the mandatory retirement for judges. In that case, the European Commission brought infringement proceedings against Hungary on the ground that the changes violated EU law on age discrimination, while the President of the Supreme Court, András Baka, brought a separate and successful case against Hungary before the ECtHR.34 In these and other cases, we see up close how litigants and their creative legal counsel invoke supranational as well as national law in an effort to advance their rights and interests. This is not to say, of course, that individual litigants and their lawyers always succeed in such efforts. We know, and we see up close in several chapters in this volume, how EU law has in some cases rebounded against litigants. In his carefully researched chapter recounting several landmark competition cases, for example, Laurent Warlouzet traces the origins of the landmark 1966 Grundig-Consten case, which began when the French company, Consten, sued another French company, UNEF, in French court, charging that the latter had illegally sold televisions made by Grundig, a Germany company, despite an exclusive distribution agreement between Consten and Grundig. In 32 34

Morijn (Chapter 10) in this volume. Halmai (Chapter 24) in this volume.

33

Mastroianni (Chapter 13) in this volume.

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that case, it was the defendant, UNEF, which invoked EU competition law, resulting in a preliminary reference to the CJEU and a ruling against Consten, the original litigant. Later, Grundig and Consten challenged the actions of the Commission in their case, only to have the Court broadly back the Commission.35 Just as striking are the multiple instances in this volume in which litigants and their lawyers won what turned out to be Pyrrhic victories, prevailing before the Court on a fundamental question of EU law but failing to receive satisfaction within their domestic legal order. In the aforementioned Centro Europa 7 case, the would-be broadcaster won legal cases before both the CJEU and the ECtHR, only to suffer from continued foot-dragging by Italy before eventually going bankrupt.36 Similarly, Mr. Francovitch, having prevailed on a fundamental point of law (state liability for failure to transpose EU Directives into national law), was later ruled before a national court to be outside of the class of employees covered by the Directive in question, and hence ineligible to receive compensation.37 And, as Elaine Fahey notes in her chapter in this volume, the European Parliament successfully secured the annulment of the EU-US Passenger Name Records agreement, only to see the Commission negotiate a replacement agreement that many MEPs found even more objectionable than the first.38 Turning from the litigants to their lawyers, many of the chapters in this book give readers an unprecedentedly detailed look into the backgrounds, motives, tactics and strategies of the lawyers who advised their clients to invoke their rights under EU law, secured a preliminary reference from national courts and eventually argued before the CJEU. Some of these lawyers were well-trained specialists in EU law, but others were primarily domestic legal practitioners who sought to use and shape EU law towards their own and their clients’ ends. Consider, for example, Lord Lester, who represented Mrs. Jenkins before the Court in her sex discrimination case. As Ioanna Tourkochoriti points out in her study of the 1980 Jenkins v. Kingsgate case, Lord Lester visited the United States during the early 1970s, learning about the concept of “indirect discrimination,” bringing it home to England and eventually arguing successfully for its adoption by the CJEU. Both the arguments and the outcome in this case represented as much the aims and agenda of the litigant’s legal counsel as of the litigant herself.39 This was certainly true in the Melki case, where Attorney Romain Boucq, seeing a chance to challenge 35 37 38

36 Warlouzet (Chapter 14) in this volume. Mastroianni (Chapter 13) in this volume. Bartolini and Guerrieri (Chapter 18) in this volume. 39 Fahey (Chapter 27) in this volume. Tourkochoriti (Chapter 22) in this volume.

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the ethnic profiling and frequent detention of sans papiers near the French borders, continued to argue his case even after the release of his clients.40 Similarly, in their study of the famous Francovitch case, Antonio Bartolini and Angela Guerrieri provide an extraordinarily vivid portrait of two of Mr. Francovitch’s lawyers, Aldo Campesan and Alberto Dal Ferro. Educated in EU law at the University of Padua by Paulo Gori (the former clerk to Judge Alberto Trabucchi during the heyday of the activist CJEU in the 1960s), Campesan and Dal Farro sought not only to invoke EU law to protect their client’s rights but also to frame their plea as broadly as possible, putting into question the “system of community enforcement as a whole” and inviting the judges to conclude that this system could only be effective if Member States were held liable for their failure to transpose European directives into national law.41 Dimitry Kochenov and Justin Lindeboom provide a similarly colourful portrait of a resourceful team of lawyers who identified the promise of EU law for Ms. Chen’s case. As the authors recount: The Chen case started when Mrs Chen, shortly after arriving on her own in the UK, walked into Malloy & Barry Solicitors, a well-known firm in Cardiff, and immediately asked for an immigration lawyer. Not surprisingly, there were none available – Chen was the first immigration case in which the eminent commercial firm was involved, probably not to disappoint their important Chinese client. Michael Barry, partner at this firm, decided to call Ramby de Mello, a barrister in London who specialized in European and immigration law. Along with Mrs Chen, they discussed the legal options.

Specifically, they continue, Mrs. Chen and her counsel discussed multiple legal avenues that might allow the client and her child to remain in Europe, before settling on EU citizenship law as a promising avenue. “Using EU law was just one option among many”, they write, “and came naturally, as it was admittedly the cheapest.”42 In these and other chapters, we also get a glimpse into another common feature of EU law litigation in national courts, namely the effort by litigants and lawyers to make it easy for national-court judges, many of who have scant knowledge or experience with EU law, to formulate and refer legal questions to the Court of Justice.43 It is to these national courts and judges that we now turn.

40 43

41 42 Caruso and Geneve (Chapter 26) in this volume. Ibid. Ibid. See e.g. the accounts by Bartolini and Guerrieri on Francovitch and Mastroianni on Centro Europa 7, in this volume.

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national courts as bridges – or gatekeepers – to the court of justice With the exception of a handful of Commission infringement proceedings and requests for annulment, the vast majority of cases considered in this volume originated as preliminary references from national courts. In these cases, what makes a case a landmark is that, in the first instance, a national court chose to refer it to Luxembourg. National courts can thus serve, on the one hand, as bridges between individual litigants and the CJEU, and on the other hand as gatekeepers to the Court. This, in turn, raises the fundamental question of how and why national courts have chosen to engage the CJEU, submitting preliminary references, accepting the principles of direct effect and supremacy of EU law, and applying the CJEU’s legal rulings in the cases before them. Within the political science literature, responses to this question fall into three broad camps: the neo-functionalist “judicial empowerment view”; a related “inter-court competition” model; and what I have called the “sustained resistance” view. In the neo-functionalist view, the willingness of national courts to accept CJEU jurisdiction and jurisprudence can be explained in terms of the extent to which CJEU rulings “empowered” national courts within their own domestic political and legal systems.44 In the majority of European countries with weak or non-existent traditions of judicial review, CJEU decisions allowed national courts to rule on the compatibility of national laws with the supreme EU law, and potentially secure outcomes that were closer to their own policy preferences. In a second, inter-court competition approach, Karen Alter has argued that the preliminary reference procedure was accepted most readily and used most ambitiously by lower courts, whose judges stood to gain in various ways from a direct relationship with the CJEU. By contrast, national high courts often proved reluctant to submit preliminary references and in some instances even attempted to quash lower-court references. Over time, however, CJEU

44

Anne-Marie Burley and Walter Mattli, “Europe Before the Court: A Political Theory of Legal Integration, International Organization 47 (1993), 41–76; Joseph H. H. Weiler, “A Quiet Revolution: The European Court of Justice and its Interlocutors,” Comparative Political Studies 24/4 (1994), 510–34; Walter Mattli and Anne-Marie Slaughter, “Revisiting the European Court of Justice,” International Organization 52 (1998), 177–209; and Anne-Marie Slaughter, Joseph H. H. Weiler and Alec Stone Sweet, eds., The European Court and National Courts: Doctrine and Jurisprudence: Legal Change in Its Social Context (Oxford: Hart Publishing, 1998).

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doctrine filtered into the national legal orders through lower-court decisions, and high courts were reluctantly forced to accept the authority of the Court.45 Over the past decade, a third view has emerged, which one might call the “sustained resistance” view, in which preliminary references to Luxembourg, and acceptance of the Court’s rulings, are persistently withheld by national courts in various Member States. At the most basic level, national courts may avoid unwelcome CJEU decisions simply by refusing to submit preliminary references to the Court, ignoring the EU law questions raised before them or relying on previous Court decisions or on their own interpretation of the treaty provisions under the so-called acte clair doctrine.46 Even where national courts agree to send preliminary references to the CJEU and accept its rulings, the concrete application of those rulings in the national setting leaves considerable discretion to national courts, which may limit the practical effect of CJEU case law in their application of decisions to the case at hand.47 In recent scholarship, Peter Lindseth has demonstrated “the limits of strong deference” to the CJEU among high courts in Germany, Italy, Denmark and the Czech Republic, which have insisted on their right to rule on the compatibility of the Union and its activities with national constitutional provisions regarding human rights, democratic accountability and the separation of powers.48 Even among lower courts, a growing number of scholars have documented the strategies whereby national courts either resisted sending preliminary references to the Court (primarily through invocation of the acte clair doctrine) or found ways to “contain” unwelcome impacts of the Court’s jurisprudence.49 In short, this new scholarship demonstrated that national courts, often depicted as the CJEU’s co-opted allies against recalcitrant Member States in early neo-functionalist scholarship, were in fact both allies and a source of resistance and restraint on the Court’s discretion.

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47 48

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Karen J. Alter, Establishing the Supremacy of European Law: The Making of an International Rule of Law in Europe (New York: Oxford University Press, 2001). See e.g. Jonathan Golub, “The Politics of Judicial Discretion: Rethinking the Interaction between National Courts and the European Court of Justice,” West European Politics 19/2 (1996), 360–85; Damian Chalmers, “The Application of Community Law in the United Kingdom, 1994–1998,” Common Market Law Review 37/1 (2000), 83–128, on the behavior of United Kingdom courts; and Jens Elo Rytter and Marlene Wind, “In Need of Juristocracy? The Silence of Denmark in the Development of European Legal Norms,” International Journal of Constitutional Law 9/2 (2011), 470–504. Conant, Justice Contained, chapter 3. Peter Lindseth, Power and Legitimacy: Reconciling Europe and the Nation-State (New York: Oxford University Press, 2010), pp. 133–87. See e.g. Golub 1996; Chalmers 2000; Conant 2002; Rytter and Wind 2011.

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The historical scholarship on the relationship between the CJEU and national courts, which Davies refers to as “reception studies”,50 strongly supports this more nuanced view of national courts in relation to the CJEU. As Davies summarizes the findings of this literature, Resistance and response to legal integration have . . . led to nonlinear acceptance of the ECJ’s jurisprudence by national actors across time and across geography. What exists across Europe is a patchwork, contingent judicial settlement, in which different Member States impose differing conditions on the acceptance of legal primacy, dependent on the broader reception of the Court, European integration, and European law at that given time.51

The stories in this volume illustrate both the variety of national-court engagements with the CJEU and the nature of the resulting, “patchwork, contingent judicial settlement.” In this regard, perhaps the most striking feature of the cases presented here is the contingency, not only of an individual litigant and her lawyer raising an EU law question before a national court, but also of the willingness of national court judges to recognize the relevance of EU law and send a preliminary reference to Luxembourg. Particularly in newer Member States such as the Scandinavian countries, with their very low preliminary reference rates, but also in original members, such as Italy, where national court judges may know relatively little about or be resistant to EU law, national-court references to Luxembourg appear as the ones that “slipped through,” due to the specific expertise, interest or commitments of specific national court judges. In their account of the Chen case, for example, Kochenov and Lindeboom point out that, at the time when the case was brought, “the well-known policy of many British courts was to leave the dialogue with the ECJ to the Court of Appeal and the then House of Lords.” It was, therefore, they note, “absolutely unique that the Chen case was referred to the ECJ at first instance,” and they cite Chen’s lawyer, de Mello, saying that “getting the reference [to the CJEU from the UK Immigration Appellate Authority] was key.”52 Perhaps just as strikingly, Kochenov and Lindbloom note that, after Chen, “the UK’s lowest immigration courts simply do not refer cases to the ECJ any more,” once again highlighting the extraordinarily contingent nature of the lower-court reference in Chen, without which the Court might have had no opportunity to rule on this important question of EU law.

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Bill Davies, Resisting the European Court of Justice: West Germany’s Confrontation with European Law, 1949–1979 (New York: Cambridge University Press, 2012), at 4. 52 Ibid, at 7. Quoted in Kochenov and Lindeboom, this volume.

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Nor is Chen the only case in which a preliminary reference appears as exceptional and contingent, a chink in what was otherwise a wall of sustained resistance by national courts. As Francesca Strumia reports in her story of the controversial Ruiz Zambrano case, Chen left open a series of questions about the application of EU citizenship law to third-country nationals with EU-born children. In Strumia’s account, Several Belgian immigration lawyers had already tried, in the aftermath of Chen, to rely on a combination of the Chen rule and the provisions of the Law on Foreigners to win regularization of status in Belgium for their third country national clients who had Belgian children. The strategy yielded mixed results. Some municipalities initially accepted the argument, while several others increasingly rejected relevant applications on ‘legal engineering grounds’. Relevant cases began to flock to the Conseil du Contentieux des Étrangeres, together with gentle lawyerly nudges towards referring a question to the CJEU . . .. None of these cases would go very far as the Conseil du Contentieux des Étrangeres made it clear that it would not refer questions to the CJEU.53

In this context, Strumia continues, “What made the Zambrano case was that it landed on the table of the Tribunal du Travail,” which ultimately submitted to Luxembourg a preliminary reference that other courts had refused to submit.54 Much the same can be said of the Melki case, in which the French Cour de Cassation broke from its usual procedure, submitting a preliminary reference to the CJEU rather than interacting with the French Conseil Constitutionnel.55 In these cases, and in others in this volume like Francovitch56 and Océano Grupo,57 we see national court judges responding with highly variable degrees of receptivity to the invocation of EU law by litigants, in some cases eagerly taking up the issue and sending it to Luxembourg (often closely following the text of the questions posed by counsel58), where many of their counterparts refused to do so. Judging from these accounts, it seems as if the EU’s landmark jurisprudence is indeed based on cases that idiosyncratically slipped through an otherwise widespread resistance by many national courts to submit preliminary references. Of course, the role of national courts does not end with the submission of a preliminary reference, since in each case the submitting national court is tasked with the subsequent application of the CJEU’s interpretation of EU law to the case at hand. It is in this application of law by national courts that Union 53 56 57 58

54 55 Strumia, this volume. Ibid. Caruso and Geneve, this volume. Bartolini and Guerrieri, this volume. Nicola and Tichadou (Chapter 20) in this volume. See e.g. the preliminary reference in Wijsenbeek, explored in this volume by Morijn.

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law does or does not effect the rights of men and women “on the ground” in the Member States, and the cases examined here, like those studied in Lisa Conant’s seminal book, Justice Contained,59 reveal a variety of responses, ranging from enthusiastic reception at one extreme to containment and even defiance at the other. Students of EU law are perhaps most familiar with the rather spectacular “judicial dialogues” between the CJEU and national constitutional and supreme courts, in which national judges push back against and perhaps influence the subsequent judgments emanating from Luxembourg. Perhaps the best-known example of such national-court resistance is the decades-old judicial dialogue between the CJEU and the German Federal Constitutional Court regarding the CJEU’s protection of individual rights, as well as its right to interpret authoritatively the Union’s legal competence vis-àvis national constitutional orders. In the 1970 Internationale Handelsgesellschaft and 1974 Solange I rulings, examined in detail in this volume by Bill Davies, the German Court indicated that, so long as adequate protection of human rights was not guaranteed by EU law, it would reserve to itself the right to scrutinize EU legislation for conformity to the German Basic Law. Responding at least in part to the reservations expressed by the Constitutional Court, the CJEU subsequently developed its own fundamental rights doctrine, leading the German Court to adopt a second, later ruling, the so-called Solange II, to accept CJEU decisions on fundamental rights without further review.60 Later, in the 1993 Maastricht decision, the German Court again proclaimed its concerns about ECJ jurisprudence, this time regarding the extent of EU competences, indicating that it reserved the right to review CJEU decisions for conformity to the provisions of the Basic Law,61 and the ongoing dialogue between Karlsruhe and Luxembourg over the compatibility of EU treaties with the German Basic Law has continued with additional challenges to the Lisbon Treaty62 and the Fiscal Pact.63 Such high-level constitutional dialogues are enormously important to the development of EU legal doctrine, but just as telling and more typical are the 59

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Lisa Conant, Justice Contained: Law and Politics in the European Union (Ithaca, NY: Cornell University Press, 2002). Davies (Chapter 9) in this volume. Matthias J. Herdegen, “Maastricht and the German Constitutional Court: Constitutional Restraints for an ‘Ever Closer Europe’,” Common Market Law Review 31 (1994), 235–49. Armin Steinbach, “The Lisbon Judgment of the German Federal Constitutional Court: New Guidance on the Limits of European Integration?” German Law Journal 11/4 (2010), 367–90. Roland Nelles and Severin Weiland, “Constitutional Court Ruling: A Setback for Germany’s Euroskeptics,” Spiegel Online, 12 September 2012, www.spiegel.de/international/europe/ constitutional-court-ruling-a-setback-for-germany-s-euroskeptics-a-855413.html, accessed on 12 January 2013.

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stories in this volume that trace the day-to-day reception and application of CJEU decisions “on the ground,” which determine the actual rights of EU citizens and the “payoffs” for the flesh-and-blood litigants. Looking at the finegrained stories in this volume, we find a range of outcomes, most of which fall between the extremes of loyal and enthusiastic application one the one hand and defiant acts of containment on the other. In the Internationale Handelsgesellschaft story, Davies notes that the key protagonist in the inception of the constitutional dialogue was in fact the lower national court – the Frankfurt Administrative Court – which seemed to deliberately provoke a conflict between the highest courts by re-referring the CJEU’s initial ruling within its own domestic system.64 In another example, the Centro Europa 7 case, the Italian Consiglio di Stato not only referred a question about the rights of the Italian broadcaster; it also loyally implemented the Court’s decision, setting aside domestic Italian legislation and enjoining the ministry of communications to assign frequencies to CE7. At the same time, however, as Roberto Mastroianni notes in his chapter, the domestic Court also appeared to “contain” part of the effect of the CJEU ruling by ignoring the plaintiff’s expert estimate that it had suffered more than €2 billion in damages, and instead issuing a much smaller award of about €1 million.65 In other cases, national courts accepted CJEU decisions while limiting the impact of the rulings for the litigant in the case, such as the so-called Pyrrhic victory of Mr. Francovitch, who had the satisfaction of establishing the fundamental principle of state liability but not of being paid the funds he claimed he was due from his employer66; and in Melki, where the Cour de Cassation left considerable discretion for local judges to decide whether a given detention had violated the provisions of EU law.67 In these and others chapters, the authors in this volume continue the demanding and ongoing task of cataloguing the subtle ways in which national courts receive, apply and, not infrequently, contain the effects of CJEU rulings in national legal orders.

the european commission as pro-integration repeat player The European Commission has long been considered the embodiment of the European ideal, a “purposeful opportunist”68 seeking to deepen European 64 66 68

65 Davies, this volume. Mastroianni, this volume. 67 Bartonlini and Guerrieri, this volume. Caruso and Geneve, this volume. Laura Cram, “Calling the Tune Without Paying the Piper? Social Policy Regulation: The Role of the Commission in European Community Social Policy,” Policy and Politics 21/2 (1993), 135–46.

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integration by extending the reach of EU law.69 Much of the early literature to this effect focused on the Commission’s role vis-à-vis the Council of Ministers in the policy-making process, but in his seminal 1981 article, Eric Stein identified the Commission, and in particular its Legal Service, as the quintessential repeat player, employing a long-term strategy of both bringing infringement proceedings and issuing observations in preliminary reference cases, all with the aim of nudging the Court towards a teleological, constitutional reading of EU law. More recently, Morten Rasmussen and Anne Boerger-de Smedt, among others, have drawn on archival sources to reveal the motives, strategies and tactics of the Legal Service under its founding director, Michel Gaudet.70 The law stories collected in this volume provide, almost without exception, further evidence of the Commission’s sophisticated, integrationist legal strategy and its repeat-player status before the Court, both as a litigant in infringement proceedings and intervening in the much larger number of preliminary references. It is certainly true that, in the vast majority of cases discussed here, the Commission, where it was not the initial litigator in infringement proceedings, stood ready to intervene with integrationist briefs in preliminary reference cases, and in many cases to take opportunistic policy action based on the Court’s rulings to extend the scope and reach of EU policies.71 The 69

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Nor is the Commission the only supranational actor representing such positions before the Court. Although the European Parliament historically lacked standing to intervene before the Court, both the Parliament and its individual members and groups have played an increasing role in the life of the CJEU in recent years. See, in this volume, the stories – by Boerger and Davies, Morijn, and Fahey – of Les Verts, Wijsenbeek, and the litigation over the transatlantic Passenger Name Recognition agreement. See e.g. Morten Rasmussen, “Establishing a Constitutional Practice of European Law: The History of the Legal Service of the European Executive, 1952–65,” Contemporary European History 21/3 (2012), 375–97; Morten Rasmussen and Anne Boerger, “Influence from the Sideline: Michel Gaudet and the Early Development of European Law,” paper presented at the Conference Setting an Agenda for Historical Research in European Law, European University Institute, Florence, 9–11 December 2015; Julie Bailleux, “Michel Gaudet, a Law Entrepreneur: The Role of the Legal Service of the European Executives in the Invention of EC Law and of the Common Market Law Review,” Common Market Law Review, 2013 50/2 (2013), 359–67; and Alexandre Bernier, “Constructing and Legitimating: Transnational Jurist Networks and the Making of a Constitutional Practice of European Law, 1950–70,” Contemporary European History 21/3 (2012), 399–415. This does not mean, of course, that the Commission will always and inevitably endorse the most far-reaching interpretations of the treaties, as John Morijn illustrates in his chapter on the right of free movement in the Wijsenbeek case. Although the Commission had sought for decades to secure the principle and the practice of free movement of persons in a Union without borders, it failed to endorse Mr. Wijsenbeek’s claim that Articles 7A and 8A of the treaties were directly effective and thereby ensured a right of passport-free travel within the EU with no further action from the EU legislator required. Morijn, this volume.

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Commission’s roles in such landmark cases as Van Gend en Loos and Cassis de Dijon, which declared the principles of direct effect and mutual recognition, respectively, have been explored by legal scholars and political scientists in the past, and are revisited in granular detail72 by Morten Rasmussen73 and Kalypso Nicolaidis in this book.74 In the former case, we see Gaudet’s Legal Service as, in some ways, the true author of the EU’s constitutional revolution, explicitly calling on a reluctant Court to declare the principles of direct effect and supremacy of EU law. In the latter, we see the Commission’s services acting strategically both before the case, in a long-standing effort to articulate and secure acceptance of the concept of mutual recognition, and after the ruling, when it made that concept central to its plan to complete the internal market. Other, lesser-known cases in this volume similarly support the nowdominant interpretation of the Commission as an integrationist repeat player, while rendering the Commission in full and providing new insights into the strategies of, and in some cases the sharp differences amongst, officials the Commission services. Gisela Gori’s chapter on the Gravier case, for example, places not only Ms. Gravier but also, and especially, the Commission at the center of the story, showing how the Legal Service worked with other Commission services, and in particular the newly created Directorate General of Education, Training and Youth, to nudge the Court towards an interpretation of the EEC Treaty’s provisions on “vocational training” expansive enough to protect the rights of EU citizens seeking university education outside their home countries.75 In a particularly vivid inside account, John Temple Lang, who represented the Commission as an official in the Legal Service in a series of fisheries cases in the 1970s, tells the story of working with the Director General for Fisheries in the Commission, Eamonn Gallagher, to formulate and put into practice a long-term legal strategy to establish the new Common Fisheries Policy. As Temple Lang recounts, Gallagher “understood from the beginning that with imagination and the right legal tactics the Commission could make it impossible for Member States to operate their own national fisheries policies 72

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On the Commission’s role in Van Gend, see Rasmussen, “Establishing a Constitutional Practice”; on its role in Cassis, see Karen J. Alter and Sophie Meunier-Aitsahalia, “Judicial Politics in the European Community: European Integration and the Pathbreaking Cassis de Dijon Decision,” Comparative Political Studies 26/4 (1994), 535–61; and Brigitte Leucht, “The History of the Cassis de Dijon Judgment,” paper presented at the Conference on Setting an Agenda for Historical Research in European Law, European University Institute, Florence, 9–11 December 2015. 74 75 Rasmussen, this volume. Nicolaidis, this volume. Gori, this volume.

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without taking the interests of conservation, and the interests of other Member States, into account.” Specifically, Gallagher and Lang successfully called upon the Court to apply the Article 5 (EEC) principle of “sincere cooperation” among the Member States to require the United Kingdom to take action to protect specific fisheries. In doing so they pursued precisely the sort of long-term agenda emphasized in the literature on legal repeat players: Eamonn Gallagher and I saw that as Member States adopted national fisheries measures, the Commission would be able to challenge them if they were discriminatory and protectionist, or if they were inconsistent with scientific advice or insufficient to implement it, in particular when the advice concerned fish stocks fished by fleets of more than one Member State. National measures could also be challenged if they had not been adequately discussed with the Commission. Since fishing cannot wait, we were sure that the Court would order interim measures suspending national legislation that seemed to be clearly illegal. These possibilities enabled the Commission to constrain national legislation, in particular, as the Member States adopted several measures which were inadequately considered and hard to defend legally.76

Like Gori, Temple Lang demonstrates how not only the Legal Service but also officials in policy-specific Directorates-General fulfilled the roles of purposeful opportunist and repeat player, using both infringement proceedings and interventions in preliminary references as complementary tools in a long-term strategy to expand the Court’s interpretation of EU law and the EU’s policy competences. By contrast, Laurent Warzoulet’s account of the development of EU competition law from the 1964 Grundig-Consten case through the 1987 Philip Morris case challenges, or at least lends considerable nuance to, the nowstandard account of competition law, which depicts a “holy alliance between the Commission, the Court, and Germany to carry out a policy based on a straightforward interpretation of the Rome Treaty” giving the Commission wide latitude to regulate cartels and eventually to police mergers within the common market.77 While the Commission was certainly a key player in the development of EU competition law, Warzoulet’s archival research reveals the Commission, and even individual Directorates-General, to be divided in the interpretation of the treaties, both in the early Grundig-Consten case (where the Dutch Director-General for Competition, Pieter verLoren van Themaat, sometimes disagreed with his German advisors) and later in the Philip Morris

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Temple Lang, this volume.

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Warzoulet, this volume.

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case (where the Legal Service stood opposed to the position put forward by Directorate General for Competition and endorsed by the College of Commissioners).78 Warzoulet’s account, like those of Gori and Temple Lang, does more than provide an intriguing window into the internal politics of a Commission that is less monolithic than a traditional, institutional account might suggest; it also underlines Davies and Nicola’s central claim, in the introduction to this volume, that there was nothing foreordained about the Commission’s or the Court’s teleological reading of the treaties. In the area of competition policy, as indeed in other areas, the far-reaching interpretations of EU law put forward by the Commission, and so often supported by the Court, were “not a mechanical process deriving naturally from the Treaty of Rome,”79 but a series of choices that won out over plausible alternative interpretations, behind the scenes and out of sight of all but a handful of Brussels and Luxembourg insiders.

member states: support, resistance and containment In much of the existing legal and political science literature, we find a common assumption that “integration,” as opposed to national sovereignty, is the primary dimension along which European legal cases are argued, and a further assumption that the Commission and Court share a common preference for deeper legal integration, while the Union’s member governments jealously defend their sovereignty, both in their interventions before the Court and in their subsequent efforts to contain the effects of unwelcome rulings.80 The stories in this book provide ample evidence for such behaviour by EU Member States, which have indeed argued on many occasions against farreaching interpretations of EU law before the Court, and subsequently engaged in legislative and executive actions to contain the effects of some of the CJEU’s landmark decisions. Rasmussen, for example, notes that three otherwise integrationist Member States (Germany, Belgium and Luxembourg) intervened in Van Gend to argue against the notion that Article 12 EEC was directly effective in EU legal orders, sending a cautionary message to the Court.81 In other cases, however, the Member States failed to circle the wagon in defence of national sovereignty, but were instead divided in their interventions, based on their substantive interests in a given area of law. In GrundigConsten, for example, the Member States inverted the usual stereotypes, with 78

Ibid.

79

Ibid.

80

Conant, Justice Contained.

81

Rasmussen, this volume.

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“integrationist” Italy and Germany supporting the call to annul a Commission decision, while France, the defender of national sovereignty par excellence, was ambivalent.82 In Gravier and other cases in which the Court was called upon to rule on the meaning of “vocational training” and whether it extended to university education, the Member States were again divided. Some Member States, such as Italy, were predominantly “sending” states, whose nationals sought to travel to other Member States for educational purposes, and therefore supported a broad interpretation of vocational training; while others, including Belgium, Germany, the Netherlands, the United Kingdom and Denmark, as “receiving” states, steadfastly opposed the extension of vocational training to cover university education.83 Although the sovereigntist coalition lost the argument in Gravier and in subsequent cases such as Blaizot, those same Member States were later able to constrain the prospective impact of the Court’s rulings in the negotiation of the Maastricht Treaty, which defined the EU’s educational policy competences narrowly.84 In a similar register, other authors in this volume chronicle a series of efforts by member governments to contain, if not defy, unwelcome judgments from Luxembourg. In the case of Centro Europa 7, the CJEU ruled clearly in favour of the complainant, and the Italian court responded, as noted earlier, by setting aside domestic Italian legislation and enjoining the ministry of communications to assign frequencies to the broadcaster. Nevertheless, both the Italian legislature and the government of Silvio Berlusconi repeatedly dragged their feet in implementing the ruling, with the result that the broadcaster faced bankruptcy while awaiting compliance – perhaps the most spectacular of the several Pyrrhic victories depicted in the stories collected in this volume.85 A broader case of Member States striking back against an unwelcome ruling came in Chen, which, as noted earlier, granted new and controversial rights to the parents of EU-born children. As Kochenov and Lindeboom note, Ireland in 2004 – motivated in part, though not exclusively, by the Chen case – voted by referendum to amend its constitutional provisions on ius soli citizenship, limiting Irish citizenship to children born in Ireland of at least one parent who is, or is entitled to be, an Irish citizen.86 Furthermore, as Strumia notes, the ruling in Chen also produced reverberations, and pushback, in Belgium, where a 2006 amendment of the Belgian nationality code restricted the right to Belgian citizenship for children born in Belgium.87 Hence, a CJEU ruling that created a fundamentally new right of citizenship 82 85 87

Warzoulet, this volume. Mastroianni, this volume. Strumia, this volume.

83

84 Gori, this volume. Ibid. Kochenov and Lindeboom, this volume.

86

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in EU law was contained, and indeed access to national citizenship in Ireland and Belgium was arguably set back, by national responses to the decision. When the CJEU overreaches, at least in the eyes of the member governments, containment remains an option.

the court as a strategic – but still largely opaque – actor Thus far in this chapter I have focused on the insights that EU law stories offer for our understanding of the Court’s various interlocutors, from litigants and national judges to the Commission and member governments. But what of the Court itself, famously enclosed behind a wall of secrecy, as well as behind the “mask and shield” of the law? In his chapter, Antoine Vauchez suggests that the “thick description of cases” may not only reveal the political, economic and social contexts of those cases but also open the “judicial blackbox” of the Court itself.88 Several of the early chapters of this volume – including in particular Karen McAuliffe’s “behind the scenes” look at drafting practices in the Court, and Mathilde Cohen’s depiction of the Court’s judges embedded in an elaborate judicial bureaucracy – do indeed open up that black box, giving us a vivid sense of the day-to-day life the judges and their working methods. Drawing on official sources, on the off-the-bench writings of the judges, and on interviews with judges and other court officials, scholars like McCauliffe and Cohen give us a partial window into the Court’s inner life. Yet this window is at best partial, because the Luxembourg judges have interpreted the secrecy of their deliberations to include not only what is said in judicial conclave but also any and all internal disagreements among the judges, which in many other courts (such as the ECtHR) are manifested in public votes and in separate concurring and dissenting opinions. This contrast, between the deep insights into the workings of the Court in the volume’s general chapters and the focus on the Court’s interlocutors in the most of the case-specific “law stories” chapters, reveals a fundamental feature of the Court, its practices and its relationship to the outside world. In their extra-judicial writings and speeches, as well as in discussions with scholars and journalists, the Luxembourg judges have demonstrated a small but growing willingness to open a window onto the Court and its day-to-day workings. But when it comes to particular cases – including the two-dozen-odd cases reviewed by the authors in this volume – the judges have interpreted the 88

Antoine Vauchez, this volume.

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Treaty-mandated secrecy of deliberation absolutely, to preclude not only any revelation of the judges’ private discussions but also of the views of individual judges who might have disagreed with the (unidentified) majority in each case. This means that, as a general rule, the more tightly we focus our analysis on a given case, the more opaque the workings of the Court become. Nevertheless, even with the judges’ famous reserve and discretion, the careful, contextual analyses of specific cases in this book reveal glimpses of a court that is profoundly aware of the political and social context of its cases, and strategic in its rulings. To be sure, the majority of the landmark cases in this book highlight the Court’s more audacious moments – referring to the treaties as a constitutional charter in Les Verts, declaring the principles of direct effect and supremacy in Van Gend and Costa, finding implied powers for the Communities in ERTA and establishing the principle of mutual recognition in Cassis. The common focus of these cases, and indeed of nearly all EU law casebooks, is on the Court as a bold or even activist body, and not on its more restrained or deferential moments.89 Yet, a closer look at these and other cases illustrates the sometimes sensitive political context in which the Court ruled, the limits of the Court’s audacity, and the judges’ strategic ability to combine tactical restraint with a long-term integrationist strategy. For example, Morten Rasmussen draws upon the personal papers of judges to give us an inside view of the landmark 1963 Van Gend decision proclaiming the direct effect of European law. Rasmussen reveals that the Court was divided 4-3 on this crucial decision, which was shaped fundamentally by the arrival at the Court of Robert Lecourt and Alberto Trabucchi, the integrationist judges who tipped the scale in favour of a revolutionary new jurisprudence despite the more conservative positions of the Advocate General Karl Roemer and the juge rapporteur Leon Hammers, both of whom denied the direct effect of Article 12 EEC. The outcome in Van Gend, far from representing the inevitable working out of the language of the treaties, is revealed as a spectacularly contingent outcome. Moreover, we see, in the words of Judge Trabucchi, a profoundly strategic court, prepared to declare the direct effect of European law but resisting “pour le moment” the declaration of the supremacy of EU law, which would follow in the next year’s Costa ruling, due to difficulties that such a ruling would raise in Germany and Italy.90 Vera Fritz provides a similarly rich, contextual picture of the Court proceeding cautiously in its 1976 Tessili decision. As Fritz points out, Tessili 89

90

Although, to be clear, such moments do appear among the cases in this book, most notably in John Morijn’s study of the Wijsenbeek case and in Vera Fritz’s analysis of Tessili v. Dunlop. Rasmussen, this volume.

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concerned the question of how the “place of performance” of a contract was to be determined, and it was the very first case in which the Court was given a chance to interpret the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. The Court had not originally been granted the power to interpret the Convention, due to opposition from the French, German and Belgian governments, and, Fritz reports, it took the six original members three years to settle upon a four-page agreement to that effect. Tessili was the first case brought under the Convention, making it particularly sensitive vis-à-vis member governments that had only recently and reluctantly agreed to grant the Court jurisdiction. Furthermore, Fritz points out, Tessili was also decided at a time when the three new Member States – the United Kingdom, Denmark and Ireland – were negotiating their own accession to the Convention, making the case sensitive vis-àvis both the original and the new Member States. As it happens, the role of juge rapporteur in the case was assigned to Pierre Pescatore, “the ECJ’s storm trooper in terms of ‘European integration through law and ECJ case law’ convictions,” which might lead the reader to expect an audacious ruling finding and imposing a common definition of the “place of performance” for an EU contract. What we see instead, however, is a careful, strategic ruling on the part of the Court, which demonstrated apparent restraint in failing to impose a single definition, leaving that question to national law – but which at the same time laid the doctrinal groundwork for more far-reaching decisions that would follow just a few years later.91 In his discussion of Internationale Handelsgesellschaft, another case of that period in which Pescatore served as juge rapporteur, Davies is able to exploit Pescatore’s off-the-bench writings to ascribe with some certainty the main authorship of that ruling. Davies highlights the similarities between the wording of the ruling and the text of the article on fundamental rights in the EEC, which Pescatore published immediately prior to the 1970 decision, demonstrating the clearly dominant role Pescatore played amongst the panel of judges in shaping this area of EU law.92 With the partial exception of Rasmussen’s study of Van Gend, we lack a window directly into the Court’s internal deliberations in any of these cases, or indeed into the private views of judges who may have disagreed strongly with the decision of “the Court.” A number of chapters, however, focus helpfully on the sometimes subtle differences between the initial Opinion of the Advocate General in the case and the subsequent ruling of the Court. It is

91

Fritz (Chapter 19) in this volume.

92

Davies, this volume.

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often observed that the Court’s magisterial rulings give the impression that CJEU decisions represent the logical – indeed, the only logical – reading of EU law,93 yet the Opinions of the Advocates General, which are typically more detailed than the Court’s terse rulings and which sometimes differ from those rulings in either legal reasoning (frequently) or outcome (rarely), direct our attention to judicial choices that were clearly not inevitable. In some of these cases, such as Van Gend, Jenkins and Grundig-Consten, we find Advocates General adopting cautious, deferential readings of the treaties, only to see the Court embrace instead the strong, teleological readings advocated by the Commission. Cases such as these reveal the extent to which, and the ways in which, the Court was making deliberate decisions to go beyond traditional interpretations, instead choosing a teleological and even an activist approach. In other cases, however, the Court has been less daring and more restrained in its reasoning than its Advocates General. In the Océano Grupo case, for example, the Court followed Advocate General Saggio’s Opinion in terms of the outcome (namely that national courts could set aside unfair clauses in contracts), but did so on narrower grounds than Saggio suggested.94 And in the highly sensitive case of the dismissed Hungarian judges, the Court followed Advocate General Kokott in ruling in favour of the judges, but did so on narrow grounds of age discrimination, failing to mention – as Kokott had – the broader issue of the independence of the judiciary.95 Rulings such as these, issued in 2000 and 2012, respectively, resonate with the increasingly commonplace view that the post-Maastricht Court has been more deferential (or perhaps more selectively activist) than its predecessors.96 In yet another set of cases, the Court’s ruling broadly agreed with the Advocate General’s opinion in terms of the outcome, yet the terse, even cryptic legal reasoning in the Court’s decision left many students of EU law perplexed, sending them to the Advocate General’s opinion as the only, albeit imperfect (because the AG does not sit amongst the judges in the deciding chamber), indication of the Court’s detailed legal reasoning: examples in this volume include the opinions of AG Maduro in Viking and AG Sharpston in Ruiz Zambrano.97

93

94 96

97

Mitchel de S.-O.-l’E. Lasser, Judicial Deliberations: A Comparative Analysis of Judicial Transparency and Legitimacy (New York: Cambridge University Press, 2004). 95 Nicola and Tichadou, this volume. Halmai, this volume. For a careful (and sceptical) discussion of the CJEU judicial retreat hypothesis, see Martin Shapiro, “The European Court of Justice,” in Peter H. Russell and David M. O’Brien, Judicial Independence in the Age of Democracy: Critical Perspectives from around the World (Charlottesville: University of Virginia Press, 2001), pp. 273–300, at 290–94. See e.g. the chapters in this volume by Lindseth (who looks beyond the “the wooden and often opaque language of the judgment” in Viking to Maduro’s opinion) and Strumia (who does the

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At the extreme, efforts like these can resemble old-fashioned Kremlinology, with experts looking for hints and nuances in the pronouncements of tightlipped officials. Nevertheless, it is in these and other law stories in this volume that we see the promise of an approach that is both contextual, placing the Court’s rulings in context, and critical, pointing to the very real choices that the judges had, and made, in interpreting often vague EU provisions of the treaties and secondary legislation. In the end, the CJEU has become marginally more transparent over time, and scholars such as McAuliffe and Cohen are beginning to provide readers with some insights into the Court’s general workings. By comparison with many other courts, however, the CJEU can still appear like a black hole, from which nothing – except very brief, magisterial rulings with no hint of disagreement amongst the judges – can escape. Under such circumstances, students of the Court and of European law can and indeed must learn much of what they know from studying, not the Court itself, but its effects on and interactions with its interlocutors in the EU legal order – just as astronomers study black holes by observing their impact on the swirling disks of matter around them. The judges of the Court appear likely to continue to jealously guard the secrecy of their deliberations and their private thoughts about CJEU rulings, not least because of what Joseph Weiler has called the “continuous affront to the integrity of the European legal system” posed by the judges’ short, renewable, six-year terms.98 Unless and until the EU’s Member States change this structural feature of the Court through treaty reform, granting the Luxembourg judges the same nine-year, non-renewable terms already enjoyed by their Strasbourg counterparts, we are likely to get only sporadic glimpses inside the Court. In the meantime, perhaps the primary contribution of EU law stories – and, more broadly, of historical, sociological and contextual approaches to EU law – will be to illuminate the vivid and complex motives and behaviours of the Court’s interlocutors, who will continue to bring cases, send references and receive the judgments of Europe’s most powerful court.

98

same with respect to the notoriously terse Ruiz Zambrano ruling and Sharpston’s much richer opinion). J. H. H. Weiler, Epilogue: The Judicial Après Nice,” in Gráinne de Búrca and J. H. H. Weiler, eds., The European Court of Justice (Oxford: Oxford University Press), pp. 215–26, at 225–26; see also J. H. H. Weiler, Epilogue: Judging the Judges: Apology and Critique, in Maurice Adams, Henri de Waele, Johan Meeusen, and Gert Straetmans, eds., Judging Europe’s Judges: The Legitimacy of the Case Law of the European Court of Justice (Oxford: Hart Publishing, 2013), pp. 235–53, at 252.

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Index

Abdeli, Selim, 506–508 legal representation for, 508–512 abortion. See also Society for the Protection of Unborn Children v. Grogan Irish ban on ECtHR rulings on, 397–398 exceptions to, 400–401 Protection of Life During Pregnancy Act and, 400–401 US involvement in, 202 as service, 395 abortion rights in Great Britain, 394 under Grogan template, 396–397 accounting procedures, for corporations, 311–312 ACTA. See Anti-Counterfeiting Trade Agreement acte clair doctrine, 588 activism, of judges, 370–371, 387–388 Adams, Gerard (Gerry), 192–193 Adenauer, Konrad, 91, 171 administrative law in France, 27 in Italy, 352 Advocates General (AG). See also référendaires at CJEU, 44–45 Jenkins v. Kingsgate and, 429–431 AETR. See European Agreement Concerning the Work of Crews of Vehicles Engaged in International Road Transport AG. See Advocates General age discrimination, 479–483 Algeria Association Agreement in, 520

asylum seekers from, 514 Cooperation Agreement in, 520 economy of, 516–519 lack of diversification in, 517 state management of, 517–518 EEC trade policy with, 522–524 EU policy towards, 519–526 competitive markets as part of, 521–522 through economic cooperation, 516, 519–521 through FTAs, 522, 524–526 FDI in, 518 Franco-Algerian agreement, 513–514 French Code of Criminal Procedure in, 508–509 illegal immigration from, 513–515 migration from, 515–516 political stability of, 517 QPC in, 509–510 sans papieres in, 507–508, 512–515 subsidiary asylum from, 514 trade asymmetries with France, 515–516 development cooperation and, 516 wine industry in, 522–524 Alter, Karen, 59–60, 587–588 American Political Development (APD), 552–553 Andriessen, Frans, 273 Anti-Counterfeiting Trade Agreement (ACTA), 530, 533, 546 APD. See American Political Development arbitrage, in corporate law, 315 Area of Freedom, Security and Justice, 178–179 Arnoltz, Jens, 31 artists, wealth and worth for, 28–30 ARTs. See assisted reproductive technologies

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604

Index

aspirational constitutionalists, in Germany, 171–172 assisted reproduction, 402–403 assisted reproductive technologies (ARTs), 406, 412–413 Association Agreement, 520 asylum seekers. See also Zambrano case from Algeria, 514 under CEAS, 297 children of, nationality of, 239–240 under Dublin Regulation, 297–298 under European Asylum regime, 297 under Lisbon Treaty, 297 mutual recognition and, 297–298 non-refoulement obligations, 227 by Ruiz Zambrano, 226–227 under sovereignty clauses, 298 subsidiary, 514 Atlantic economy, economic convergence for, 495–496 Australia, High Court of Australia, 70 Austria education policy in, 465 free movement of corporations throughout, 332 limited companies in, 329–330 real seat theory in, 309 automaticity of access, in managed mutual recognition, 286–287 Azoulai, Loïc, 22, 278 Bailleux, Julie, 31 Baka, András, 471–472, 477, 483–486, 584. See also Fundamental Law of Hungary Balfe, Richard, 189 Barnard, Catherine, 436–437 Barry, Michael, 208, 211–213, 215–219, 586 Bartolini, Antonio, 586 Basic Law, 170–171, 173–174, 591 Belgium. See also Benelux countries; Commission EEC v. Luxembourg and Belgium; Dairy Products case; Zambrano case Brussels Convention and, 361–362 Colombian nationals in, 227 education policy in, 455–457, 465 infringement procedures against, 455 vocational training as distinct from higher education, 456 immigration law in, 230–231 Law on Foreigners in, 230

nationality code in, 229, 240–241 changes to, 242 children under, 241 nationality law in, 228–229 real seat theory in, 309 Ruiz Zambrano in, 224 under Treaty of Rome, 122–123 Tribunal du Travail in, 231–233 Benelux countries, 90–91 free movement of citizens throughout, 183 Bensheim Colloquium, 170 Berkhouwer, C., 188 Berlusconi, Silvio, 248–249 Bernier, Alexandre, 269 Bernstein, Herbert, 363 Berry, Adrian, 208, 215–219, 223 biomedical law, 414. See also reproductive rights Boerger-de Smedt, Anne, 141, 593 Bolkestein, Fritz, 188, 290 bond markets, in US, 571 Bonichot, Jean-Claude, 77 Boogerd-Quaak, Johanna, 544 Bot, Yves, 410–412 Boucq, Romain, 509 Boulouis, Jean, 32–33 breakfast jurisprudence, 29–30 Brentano, Heinrich von, 99 Bresson, Jean-Jacques De, 94 bricolage, EU law and, 3 British Race Relations Act 1976, 432 Brittan, Leon, 275 Browne-Wilkinson, Nicolas, 435 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters Belgium and, 361–362 drafting of, 360–362 EEC and, 360 France and, 361–362 Germany and, 361–362 Italy and, 361 Luxembourg and, 361 The Netherlands and, 361 preliminary ruling mechanisms in, 363 primacy of, over Member State national law, 365 principles of, 358 purpose of, 362 Tessili v. Dunlop and, 357–358 community law and, 364–365

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Index interpretation of convention with, 364–366 politico-legal dilemma as result of, 362–364 Budd, Declan, 306 bureaucrat judges, 75–77 bureaucratic courts, 60–69, 75–79. See also Court of Justice of the European Union; European Court of Human Rights; référendaires bureaucrat judges, 75–77 cultural differences between, 73–75 European juristocracy, 78 functional specialties within, 60–62 for legal tasks, 61 for linguistic tasks, 61–62 hierarchies within, 63–66 among judges, 65–66 among judges’ staff, 64 among support staff, 63–64 judges in, 61 bureaucrat, 75–77 language differences between, 73–75 lawyer-linguists in, 62 legal differences between, 73–75 tenure terms in, for staff and judges, 70–73 at CJEU, 70–71 at ECtHR, 71–73 uniformity within, 67–69 for judgments, 67–69 with language check units, 68 office of jurisconsult, 67–68 for staff, 69 Büthe, Tim, 271–272 Cahn, Naomi, 413 Calamendrei, Piero, 115–116 Campesan, Aldo, 339, 346–347, 586 CAP. See Common Agricultural Policy Capotorti, Francesco, 371 Cappelleti, Mauro, 9 Carstens, Karl, 171–172 cartel control competition policies and, 261 EEC and, 261–263, 276–277 TFEU and, 261 under Treaty of Rome, 262–263 Cartesio case, 330–332 Cartier, Stéphanie, 72–73 Cary, William, 317

605

Case 804/79. See Commission v. United Kingdom Caspari, Manfred, 273 Cassis de Dijon case, 21. See also mutual recognition ‘demoicracy’ in EU and, 300 depth of decision, 284 facts of case, 280 judicial legacy of, 300 MEQR review and, 281–282 mutual recognition in, 281, 284–285 myths surrounding, 279–285 public response to, 290–291 scope of decision, 284 under TFEU, 280–281 Catalano, Nicola, 94 CEAS. See Common European Asylum System Centro Europa 7 srl (CE7) case case facts, 246–249 CJEU and, 251–252 NCRF Directives and, 251–252 conflict of interests issues in, 248 Consiglio di Stato and, 249, 251–253 domestic court decision, 252–257 ECHR and, 253 ECtHR and, appeal to, 253–255 EU law and, as direct recourse to, 250–251 freedom of information principle and, 247–248 legal strategy in, 250–251 Centros case, 322–330 incorporation theory and, 324 Charlie Hebdo massacre, 513, 541 Chen, Man Lavette, 201 immigration for, 208 under one-child policy in China, 205–207 right of residence for, 210, 219–220 Chen case, 207–219 abuse of EU law in, 215–219 dependency arguments in, 211–213 EU citizenship and, 203–205 judgment of court, 221–222 judicial legacy of, 202–205, 222–223 outline of facts, 207–211 right of residence in, 210, 219–220 Tizzano opinion, 219–220 Chevallier, Roger-Michel, 28, 32–33 Chevènement, Jean-Pierre, 514 children of asylum seekers, 239–240

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606

Index

children (cont.) under Belgian nationality code, 241 under one-child policy, in China, 205–207 enforcement of, 206–207 of refugees, 239 stateless, 239 China. See People’s Republic of China circumvention tourism, 416–417 Civil Code, in Italy, 353 civil rights, in US, 564 civil servants, judges and, 77 CJEU. See Court of Justice of the European Union Classical Legal Thought project, 10–11 CLS. See critical legal scholars Cohen, Antonin, 59–60 Cohen, Felix, 9 Cohen, I. Glenn, 416–417 Cohen, Mathilde, 598 collective good, 566–568 Collins, Hugh, 380 colorblindness doctrine, 434–435 Comett program, 458 Commission EEC v. Luxembourg and Belgium, 24 Costa v. ENEL case and, legal connection with, 130–132 international law and, 127–130 self-help countermeasures in, 128–129 legal legacy of, 132–133 Treaty of Rome and, 121, 124–127 Van Gend en Loos case and, legal connection with, 130–132 Commission v. Belgium, 184–185 Commission v. France, 125 Commission v. Hungary, 481. See also Fundamental Law of Hungary Commission v. Portugal, 292 Commission v. The Netherlands, 185 Commission v. United Kingdom case facts, 305 Common Fisheries Policy as result of, 301 community interests and, 307–308 institutional issues in, 307 Treaty of Accession of 1972 and, 301–302, 307–308 Committee on Civil Liberties, Justice and Home Affairs (LIBE), 475 commodification of reproductive rights, 409–410 ECtHR rulings on, 414–416

market approach in, 414–416 regulation of, 412–413 in US, 412–413 Common Agricultural Policy (CAP), 159–160 Common European Asylum System (CEAS), 297 Common Fisheries Policy, 301–303 France v. United Kingdom and, 304–305 Pescatore response to, 304 common market. See European Economic Community commonwealth high courts, judges’ tenure in, 70 community law under Brussels Convention, 364–365 Dairy Products case under, 124–127 Dutch Alien Act and, 190 EU law and, 347 in France, 347 Internationale Handelsgesellschaft ruling and, 158, 169 inter-state retaliation mechanisms in, 130 Schengen Agreement and, 184 Tessili v. Dunlop and, 364–365 Wijsenbeek case and, 194–195 Companies Act of 2006, 333–334 comparative constitutional law, 381–383 competencies in education policy, 457–458 testing of, 463–464 vocational training policy and, 457–458 competition policies cartel control and, 261 in France, 263–264 under Regulation 17/62, 265–266 vertical distribution agreements and, 269 in Germany, 263–264 under Regulation 17/62, 265 vertical distribution agreements and, 270 Grunding-Consten case and, 266–270, 276 modernization of, 277 in The Netherlands, 263–264 Philip Morris case and, 271–277 under Regulation 17/62, 264–268, 271 under Treaty of Rome, 263–267 vertical distribution agreements and, 266–270 in France, 269 in Germany, 270 under Regulation 17/62, 267–268 under Treaty of Rome, 267

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Index Conant, Lisa, 8–9, 590–591 concealed distributions doctrine, 336 Condinanzi, Massimo, 377–378 conflict of law rules, for corporations with EEC harmonization programs, 314 in US, 314 Conforti, Benedetto, 348 Congress of German Public Lawyers, 170 Consiglio di Stato, 249, 251–253 Conso, Giovanni, 341 Constantinesco, Vladamir, 130 constitutional asymmetry, 565 constitutional law comparative, 381–383 ‘Les Verts’ and, 86–88 Constitutional Law (Italy), 250 constitutionalisation, of EU law, 8–9, 85–86, 348–349 through bricolage, 3 in France, 27 Member States feedback on, 86 Consumer Credit Directive, 387 consumer protections, 369, 373, 380, 382–383 Consumer Sales Warranty Directive, 387 contract law, harmonization of, 379 Convention for the Reduction of Cases of Statelessness, 238–239 Convention on the Mutual Recognition of Companies and Bodies Corporate, 316 Cooperation Agreement, 520 corporate law, in EU arbitrage in, 315 Cartesio case, 330–332 Centros case, 322–330 incorporation theory and, 324 under Companies Act of 2006, 333–334 concealed distributions doctrine and, 336 Daily Mail case and German law influenced by, 321–322 incorporation theory in, 321 real seat theory in, 320–322 ECJ and, 334–336 EEC and, 310 harmonization programs in, 311–318 SE, 311–312 EU scholarship on, 332–334 European Company Law, 315–316 freedom of establishment under, 320 future trends for, 336–337 insolvency and, 328–329 Inspire Art case, 325–326

607

Private Limited Liability companies and, 326 mutual recognition in, 316 regulatory competition under, 327–329 Segers case and, 318–322 under Treaty of Rome, 314 under UK Company Law, 333–334 in US, 309–310, 316–318 corporations accounting procedures for, 311–312 concealed distributions doctrine and, 336 conflict of law rules for with EEC harmonization programs, 314 for US corporations, 314 under Convention on the Mutual Recognition of Companies and Bodies Corporate, 316 creditor protection for, 311–312, 336 EEC and, 310 harmonization programs in, 311–318 under European Company Law, 315–316 in European Economic Area, 309 free movement of, 330–332 harmonization programs for conflict of law rules and, 314 in EEC, 311–318 for Private Limited Liability companies, 313 for Public Limited Liability companies, 313 purpose of, 312 under incorporation theory, 309–310, 318, 321, 324–325 legal capital for, 311–312 mergers of, 311–312 under real seat theory, 309–310, 320–322 decline of, 322–330 under SE, 311–312 split-ups of, 311–312 under Treaty of Rome, 314 in US, 309–310, 316–318 conflict of law rules for, 314 validity of, 311–312 Costa v. ENEL case, 21–23 Commission EEC v. Luxembourg and Belgium case and, legal connection with, 130–132 Dairy Products case and, legal connection with, 130–132 Costello, Cathryn, 297

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608

Index

Court of Justice of the European Union (CJEU). See also Internationale Handelsgesellschaft ruling; Jenkins v. Kingsgate; Océano Grupo Editorial SA v. Rocio Murciano Quintero case; référendaires administrative structure of, 37 archival documents for, 1 bureaucrat judges in, 75–77 bureaucratic structures in, 58–59 judges’ chambers, 66 case studies, 49–53 référendaires in, 52 CE7 case and, 251–252 NCRF Directives and, 251–252 Consumer Credit Directive, 387 Consumer Sales Warranty Directive, 387 contextual interpretation method, 138–139 Doorstop Selling Directive, 387 indirect discrimination rulings, 419–420, 444–445 Italian judges in, 376–378 judges at, 44–45 judges’ chambers, 66 tenure terms for, 70–71 judgment documents, 39 lawyer-linguists and, 48–49 EPSO and, 48–49 lawyer-linguists at, 64 lawyers at, 581–586 litigants in, 581–586 methodological approach to, 36 official languages of, 37–38. See also translation services expansion of, 41 pivot languages, 42–44 part-time work pay rates and, 431–433 personnel staff at, 44–49, 60. See also judges advocates general, 44–45 judges, 44–45 processing cases through, 37–40 QPCs under, 510 residence rights in, 224 Rules of Procedure for, 38 as strategic actor, 598–602 tenure terms in, for staff and judges, 70–71 translation services in, 39–40 for documents, 55–56 expansion of, 40–44 pivot languages and, 42–44

Tribunal du Travail and, 231–233 Unfair Terms Directive, 379–380, 383–386, 388 Zambrano case as influence on, 232–235 court considerations as factor in, 235–237 for EU citizenship issues, 233–235 courts, national. See also bureaucratic courts; Court of Justice of the European Union; European Court of Human Rights; judges acte clair doctrine and, 588 bureaucratic structures as part of, 58 defined, 58 as gatekeepers, 587–592 intercourt competition approach, 587–588 neofunctionalist approach, 587 reception studies and, 589 sustained resistance view, 587–588 creditor protection, for corporations, 311–312, 336 criminal justice, criminals and EAW and, 294–297 mutual recognition of, 295–297 critical legal scholars (CLS), 11 Cross, Clay, 432–433 Dahrendorf, Ralph, 281 Daily Mail case German law influenced by, 321–322 incorporation theory in, 321 real seat theory in, 320–322 Dairy Products case, 121–132. See also Commission EEC v. Luxembourg and Belgium under community law, 124–127 Costa v. ENEL case and, legal connection with, 130–132 under international law, 127–130 Van Gend en Loos case and, legal connection with, 130–132 Dal Ferro, Alberto, 339, 346–347, 586 data protection agreements, 541–542 Data Retention Directive, 541–542 Davies, Bill, 580, 591 De Mello, Ramby, 208, 211–213, 215–219, 223, 586 debt crisis. See sovereign debt crisis Defrennes case, 21 Delaware, corporations in, 316–318 Delors, Jacques, 301 Delvaux, Louis, 116

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Index ‘demoicracy’ Cassis de Dijon case and, 300 defined, 504 economic convergence and, 495–496 EU as, 7–8 supranationalism compared to, 504 Denmark education policy in, 456–457 vocational training policy in, 456 Devadder, Yves, 94 Dezalay, Yves, 582–583 direct effect. See Van Gend en Loos Directive on Equal Pay, 443 discrimination, systemic. See also indiscriminate discrimination by age, 479–483 CJEU rulings and, 440–444 disparate impact doctrine and, 434–440 doctrine of colorblindness and, 434–435 ECtHR and, 444–445 indiscriminate, 418 in Jenkins v. Kingsgate migration of, as legal idea, 418–419, 434–440 in US, 434–440 migration of, as legal idea, 418–419, 434–440 migration of workers and, 444–445 race-blindness and, 441 racial under British Race Relations Act 1976, 432 through employment prerequisites, 419 in US, 434–440 disparate impact doctrine Equal Pay Act and, 437 in Griggs v. Duke Power Co., 419–420 systemic discrimination and, 434–440 in US, 437–438, 442 doctrine of colorblindness, 434–435 domestic law, EU law and, 348 Donner, André, 116 Donner, Andreas, 32 Doorstop Selling Directive, 387 Droz, Georges, 363 Dublin Convention, 297 Dublin Regulation, 297–298 Dutch Alien Act, 190 EAW. See European Arrest Warrant ECHR. See European Convention on Human Rights ECJ. See European Court of Justice

609

economic convergence for Atlantic economy, 495–496 ‘demoicracy’ and, 495–496 in Estonia, 495–499 economic markets in Algeria, 516–519 lack of diversification in, 517 state management of, 517–518 in EU dislocation of, 562–572 fiscal discipline in, 569–570 integration of, 558–560, 562–572 rights in, 562–572 US legal history as influence on, 559–560 EU law as influence on, 561–562 in US dislocation of, 562–572 fiscal discipline in, 569–570 integration of, 558–560, 562–572 legal history as influence on, 559–560 rights in, 562–572 ECSC. See European Coal and Steel Community ECtHR. See European Court of Human Rights EDC. See European Defence Community education policy, in EU in Belgium, 455–457 infringement procedures against, 455 vocational training as distinct from higher education, 456 codification of competencies, 460–462 testing of, 463–464 Comett program, 458 in Denmark, 456–457 Erasmus program, 458–460 European Commission and, 455–456 financing of, 456–457 in Germany, 466 Gravier case as influence on, 447–448, 467–469 codification of policy, 457–458 competencies in, 457–458 EU citizenship and, 465–467 individual rights in, evolution of, 457–458, 465–467 legal doctrine for, 448 through program implementation, 458–460 harmonization of, 462 under Maastricht Treaty, 460–462, 597

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610

Index

education policy, in EU (cont.) from 1985–1995, 457–458 Socrates program, 463–464 under TFEU, 458–459, 469–470 under Treaty of Rome, 458 in UK, 456–457, 468–469 EEC. See European Economic Community EECT. See European Economic Community Treat Ehlermann, Claus-Dieter, 160, 270, 273 Ehring, Hubert, 94 ELJ. See European Law Journal embryos defined, 403–404 legal status of, 412 under Patent Directive, 403, 410–412 empirical liberal inter-governmentalism, 8–9 Employment Appeals Tribunal, 432–433 Empty Chair Crisis, 269 ENP. See European Neighborhood Policy EP. See European Parliament EPP. See European People’s Party EPSO. See European Personnel Selection Office equal pay under Directive on Equal Pay, 443 divergence between EU and US, 440–444 social policy as factor in, 442–444 Social Action Program and, 442–443 under systemic discrimination, 440–444 Equal Pay Act, 422, 443–444 disparate impact doctrine and, 437 Equal Pay Directive, 421. See also Jenkins v. Kingsgate Erasmus program, 458–460 ERC. See European Conservatives and Reformists Erhard, Ludwig, 91 ERTA. See European Road Transport Agreement Estonia. See also Viking judgment economic convergence in, 495–499 FDI in, 497 PHARE program in, 494–495 regulatory regime in, 494–499 ETUC. See European Trade Union Confederation EU. See European Union EU citizenship. See European Union citizenship

EU law. See European Union law EU-Canada PNR Agreement, 547 EUI. See European University Institute EURATOM community. See European Atomic Energy Community European Agreement Concerning the Work of Crews of Vehicles Engaged in International Road Transport (AETR), 136. See also European Road Transport Agreement European Arrest Warrant (EAW), 294–297 European Asylum regime, 297 European Atomic Energy (EURATOM) Community, 90, 125 Van Gend en Loos case and, 104–105 European Coal and Steel Community (ECSC), 40, 95 EU and, formation of, 338–339 supranationalism and, 96–97 Treaty of Paris and, 338–339 Van Gend en Loos case and, 104–105 European Commission, 180–182 education policy and, 455–456 EU integration supported by, 592–596 Gravier case and, 454–457 judgments against Italy, 354–355 vocational training policy and, 451 European common market. See European Economic Community European Company Law, 315–316 European Conservatives and Reformists (ERC), 475–476 European Convention on Human Rights (ECHR), 250 CE7 case and, 253 European Convention on Nationality, 238 European Council, 180–181 European Court of Human Rights (ECtHR). See also référendaires abortion bans in Ireland, rulings on, 397–398 bureaucrat judges in, 75–77 bureaucratic structures in, 58–59 CE7 case appeal to, 253–255 on Fundamental Law of Hungary, 483–486, 488 Grogan template and, 404–407 junior registry lawyers, 63 personnel staff at, 60 as strategic actor, 598–602 systemic discrimination and, 444–445

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Index tenure terms in, for staff and judges, 71–73 European Court of Justice (ECJ). See also Brussels Convention; Cassis de Dijon case; Chen case; Costa v. ENEL case; Dairy Products case; Internationale Handelsgesellschaft ruling; landmark cases; Society for the Protection of Unborn Children v. Grogan; Van Gend en Loos case; Viking judgment BVerfG and, 165, 174–176 case choice for, methodology of, 23–26 Commission EEC v. Luxembourg and Belgium, 24 Costa v. ENEL case and, legal connection with, 130–132 international law and, 127–130 legal legacy of, 132–133 Treaty of Rome and, 121, 124–127 Van Gend en Loos case and, legal connection with, 130–132 competence of, 139–140 corporate law cases and, 334–336 Defrennes case, 21 EU citizenship cases, 178 EU-US PNR Agreement and decision on, 537–542 legal aftermath of, 539–542 on Fundamental Law of Hungary, 479–483 judicial legacy of, 482–483 grands arrêts cases, historical significance of, 21–23 properties of, 24–25 Grogan template and, 399–404 historical archives of, 22–23, 103 lawyers at, 581–586 Lecourt as president of, 166–167 litigants in, 581–586 mutual recognition in, 287–288 new judges at, 167–168 Pescatore at, 167–168 Philip Morris case and, 271 principles of, 21–23, 25 regulatory systems and, 561 sociological jurisprudence in, 32–34 as strategic actor, 598–602 Treaty of Rome interpretation by, 271 Wijsenbeek case ruling, 195–197 European Defence Community (EDC), 90 European Economic Area, 309 European Economic Community (EEC), 40. See also competition policies

611

Algerian trade policy with, 522–524 Brussels Convention and, 360 cartel control and, 261–263, 276–277 corporate law and, 310 harmonization programs for, 311–318 SE and, 311–312 EP powers under, 87 ERTA and, 136 formation of corporate harmonization programs and, 313–314 under international treaties, 90–95 free movement of citizens developments outside EEC, 183–184 developments within EEC, 180–183 infringement procedures, 98–99 institutional mechanisms of, 95–99 legal mechanisms of, 95–99 Océano Grupo case and, 373 Treaty of Rome and, 338–339 Van Gend en Loos case and, 104–105 European Economic Community Treaty (EECT), 138, 144 European juristocracy, 78 European Law Journal (ELJ), 9 European Neighborhood Policy (ENP), 519 European Parliament (EP), 84–85, 87 under EEC, 87 EU integration supported by, 593 EU-US PNR Agreement and, 528–529 531–535, 544–545 consent powers of, 532 as litigator, 534–535 role in foreign affairs, 531–533, 535–536 Single European Act and, 101, 534 European People’s Party (EPP), 475–476 European Personnel Selection Office (EPSO), 48–49 European Road Transport Agreement (ERTA) codification of, 134 context for, 136–147 court decision and, 146–147 historical, 136–137 Lamothe on, 142–145 as legal dispute, 137–142 contextual approach to, 138–139 EEC and, 136 EECT and, 138, 144 EU external relations under, 134–135 EU law influenced by, 152–153 formation of, 134

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612

Index

European Road Transport Agreement (ERTA) (cont.) functions of, 134–135 international law influenced by, 152 narratives of, 147–152 alternative, 149–152 mainstream, 147–149 revisions of, 136–137 European Trade Union Confederation (ETUC), 502 European Union (EU). See also corporate law; freedom of movement Algeria and, economic policy towards, 519–526 competitive markets as part of, 521–522 through economic cooperation, 516 519–521 through FTAs, 522, 524–526 Benelux countries and, 90–91 corporate law scholarship in, 332–334 crisis of democracy within, 558–559 ‘demoicracy’ and, 7–8 economic growth in, 557–558 economic markets in dislocation of, 562–572 fiscal discipline in, 569–570 integration of, 558–560, 562–572 rights in, 562–572 US legal history as influence on, 559–560 ECSC and, 338–339 ERTA and, external relations under, 134–135 FTA and, 522 GSP in, 522 incorporation theory in, 309 indirect discrimination in, 435–436, 438–440 Member State liability in, 338, 344, 350, 355–356 Member States Brussels Convention in, primacy over national law, 365 on constitutionalisation of EU law, 86 Gravier case and, popular reaction to, 454–457 on greater integration, 596–598 as ‘metastate,’ 150, 172–173 modernization of, 557–558 real seat theory in, 309 social welfare policies in, 562–563, 565 through constitutional asymmetry, 565 regulation of, 568 sovereign debt crisis in, 559, 569–570

systemic discrimination in, migration from US, 418–419, 434–440 transfer of financial messaging data from, 533 European Union (EU) citizenship. See also freedom of movement Chen case and, 203–205 Gravier case and, 465–467 non-discrimination as part of, 234 under TFEU, 178 vocational training policy and, 465–467 Zambrano case as influence on, 233–235 European Union (EU) law. See also landmark cases; Parti Ecologiste ‘Les Verts’ v. Parliament academic debate on development of, 1–2 through case law, 4–5 contextual approach in, 8–12 critical approach in, 9–12 existential crises as influence on, 5–7 New Legal Historians as influence on, 7–8 autonomy of, 27 CE7 case and, 250–251 community law and, 347 constitutionalisation of, 8–9, 85–86, 348–349 through bricolage, 3 in France, 27 Member States feedback on, 86 development of, through international treaties, 85 domestic law and, 348 economic markets influenced by, 561–562 ERTA as influence on, 152–153 FIDE and, 113 Frankovich case as influence on, 345–349 German law in conflict with, 170–171 historiography of, 553–559 Internationale Handelsgesellschaft ruling and, 158–162 malaise of, 6 ‘march of progress’ formulation for, 577 Member State liability principle under, 338, 344, 350, 355–356 Océano Grupo case and, 378–380 private parties under, autonomy of, 338–339 structural congruence approach to, 172–173 ‘Les Verts’ and, 89 European University Institute (EUI), 1 EU-US Passenger Name Records (PNR) Agreement ACTA and, 530, 533, 546

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Index Data Retention Directive, 541–542 ECJ ruling on decision, 537–542 legal aftermath of, 539–542 EP and, 528–529, 531–535, 544–545 consent powers of, 532 as litigator, 534–535 role in foreign affairs, 531–533, 535–536 institutional background of, 531–536 judicial legacy of, 546–549 judicial review through, 535–536 legal purpose of, 538 ‘one-shooter’ litigator in, 542–543 as pyrrhic victory, 543–544 SWIFT agreement and, 530, 533, 545–546 under Treaty of Lisbon, 535, 540 Everling, Ulrich, 269 ex post guarantees, in managed mutual recognition, 286–287 FAC. See Frankfurt Administrative Court face to face social dumping, 291 Fair Labor Standards Act (FLSA), 564 Family Planning Law, 206–207 FDI. See foreign direct investment Fédération Internationale pour le Droit Européen (FIDE), 113 feminism, reproductive rights and, 408–413 Fennelly, Nial, 303–304 Fernández Seijo, José María, 372, 384, 389 fictio litis doctrine, 340 FIDE. See Fédération Internationale pour le Droit Européen financial crisis of 2008, EU law influenced by, 6 financial messaging data, transfer of, 533 Finish Seamen’s Union (FSU), 492–493 Fiscal Compact Treaty, 571 Fiscal Pact, 591 Fiss, Owen, 58 FLSA. See Fair Labor Standards Act FOIA. See Freedom of Information Act foreign direct investment (FDI), 497 in Algeria, 518 France. See also Algeria; Cassis de Dijon case; Gravier case administrative law in, formation of, 27 Brussels Convention and, 361–362 Charlie Hebdo massacre in, 513, 541 Code of Criminal Procedure in, 508–509 community law in, 347

613

competition policies in, 263–264 under Regulation 17/62, 265–266 vertical distribution agreements and, 269 constitutional law in, 27 Directive on Equal Pay in, 443 Empty Chair Crisis in, 269 Franco-Algerian agreement, 513–514 illegal immigration into, from Algeria, 513–515 immigration into, 512 real seat theory in, 309 sociological jurisprudence in, 9–10 subsidiary asylum in, 514 territorial asylum in, 514 trade asymmetries with Algeria, 515–516 development cooperation and, 516 Van Gend en Loos case and, 115 vocational training policy in, 456 France v. United Kingdom, 304–305 Franco-Algerian agreement, 513–514 Frankfurt Administrative Court (FAC), 159–164 Ehlermann and, 160 Rupp and, 173–174 Wengler and, 173–174 Frankovich case EU law influenced by, 345–351 facts of, 342–345 judicial legacy of, 349–355 in EU law, 345–351 in Italian law, 351–355 legal scholarship after, 345–350 legal strategy in, 343 Member State liability principle in, 338, 344, 350, 355–356 origins of, 339–345 free movement, of corporations, 330–332 Free Trade Agreements (FTAs), 522, 524–526 freedom of establishment corporate law and, 320 Monti II Regulation and, 502–503 Viking judgment and, 497–498 Freedom of Information Act (FOIA), 545–546 freedom of information principle, 247–248 freedom of movement, within EU in Benelux countries, 183 European Commission and, 180–182 European Council and, 180–181 indirect discrimination and, 438 before Maastricht Treaty developments outside EEC, 183–184 developments within EEC, 180–185

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614

Index

freedom of movement, within EU (cont.) in judicial cases, 184–185 under Maastricht Treaty, 185–187 reproductive rights and, 414–416 under Schengen Agreement, 183–184 community law and, 184 under Single European Act, 182, 186 under TEU, 185 under Treaty of Amsterdam, 187 under Treaty of Rome, 180 UK response to, 186 vocational training policy and, 449–450 Fritz, Vera, 140, 599–600 FSU. See Finish Seamen’s Union FTAs. See Free Trade Agreements Fundamental Law of Hungary age discrimination and, 479–483 constitutional challenges to, 477–479 ECJ ruling on, 479–483 ECtHR ruling on, 483–486, 488 judicial independence under, 472–479 retirement age of judges under, 471–472, 477 under TEU, 487 Galanter, Marc, 529–530 Gallagher, Eamonn, 301–303, 306, 594–595. See also Commission v. United Kingdom Galtung, Johan, 527 Garth, Bryant, 582–583 Gaudet, Michel, 31, 94, 111–112, 118–119, 141, 593. See also Van Gend en Loos case Gaulle, Charles de, 108, 269. See also Empty Chair Crisis Geelhoed, Leendert, 77 gender. See Equal Pay Act; Equal Pay Directive; Sex Discrimination Act 1975 Generalized System of Preferences (GSP), 522 Gény, Francois, 10 German Constitutional Court (BVerfG). See also Frankfurt Administrative Court ECJ and, 165, 174–176 Internationale Handelsgesellschaft ruling and, 158–159, 161–162, 169–174 Solange I ruling, 158–159, 163–164 German law aspirational constitutionalists and, 171–172 Basic Law in, 170–171, 591 Bensheim Colloquium in, 170 Congress of German Public Lawyers, 170 Daily Mail case as influence on, 321–322

EU law in conflict with, 170–171 sociological jurisprudence in, 9–10 traditional constitutionalists and, 171 Treaty of Rome and, citizens’ rights under, 115 Van Gend en Loos case and, 115 Germany. See also Cassis de Dijon case Basic Law in, 170–171, 173–174, 591 Brussels Convention and, 361–362 Centros case, 322–330 incorporation theory and, 324 competition policies in, 263–264 under Regulation 17/62, 265 vertical distribution agreements and, 270 education policy in, 466 limited companies in, 329–330 real seat theory in, 309 vocational training policy in, 456 Glaesner, Hans-Joachim, 170 Globalization and History: The Evolution of the Nineteenth Century Atlantic Economy (O’Rourke and Williamson), 495 Goldhaber, Michael D., 202 Gori, Paolo, 116, 346, 586 Gradoni, Lorenzo, 130 grands arrêts cases, in ECJ historical significance of, 21–23 properties of, 24–25 Grands arrêts de la jurisprudence communautaire (Chevallier), 28 Grass, Roger, 77–78 Gravier case education policy influenced by, 447–448, 467–469 codification of, 457–458 competencies in, 457–458 EU citizenship and, 465–467 individual rights in, evolution of, 457–458, 465–467 legal doctrine for, 448 through program implementation, 458–460 European Commission and, 454–457 judicial legacy of, 446–448, 452–454, 465–467 Maastricht Treaty and, 446–447 Member States reaction to, 454–457 TFEU and, 447 vocational training policy and, 449–457, 467–469

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Index competencies in, 457–458 EU citizenship and, 465–467 individual rights and, 457–458, 465–467 legal doctrine for, 448 Great Britain abortion rights in, 394 Offenses Against the Person Act in, 393–394 SPUC in, 394–395 Greece, Limited Liability companies in, 327 Griggs v. Duke Power Co. See also discrimination disparate impact doctrine in, 419–420 Grogan template, 396–397, 399–407 in ECJ cases, 399–404 in ECtHR cases, 404–407 margin of appreciation doctrine and, 405 Großfeld, Bernhard, 318 groupe de rédaction, 84, 90, 93–94, 97, 112, 117–118 Grunding-Consten case. See also cartel control competition policy and, 266–270, 276 GSP. See Generalized System of Preferences Gulmann, Claus Christian, 77 Halappanavar, Savita, 401 Hallstein, Walter, 111–112, 169–170 as aspirational constitutionalist, 171–172 Halmai, Gábor, 584 Hammes, Leon, 115, 166, 599 Harlow, Carol, 351 harmonization programs for contract law, 379 for corporations conflict of law rules and, 314 in EEC, 311–318 for Private Limited Liability companies, 313 for Public Limited Liability companies, 313 purpose of, 312 in education policy, 462 in vocational training policy, 462 Hatzopoulos, Vassilis, 178–179 Hayek Friedrich, 442 Heinich, Nathalie, 29 High Court of Australia, 70 higher education, vocational training policy and, 453 distinctions between, 456 Hillion, Christophe, 411 historical inter-governmentalism, 8–9

615

Hodge, Henry, 214 Holmes, Oliver Wendell, 577–578 Hoss, Cristina, 72–73 human rights law. See also reproductive rights Internationale Handelsgesellschaft ruling and, 157–158 prostitution and, 407 reproductive rights and, 414–416 Humblet v. Etat belge, 24 Hungary. See also Fundamental Law of Hungary Cartesio case, 330–332 constitutional reforms in, 473–475 EPP in, 475–476 ERC in, 475–476 judges in equality principle for, 473 under Fundamental Law of Hungary, 471–472, 477–479 judicial independence of, 472–479 retirement age for, lowering of, 471–472, 477 LIBE in, 475 NGOs in, 476 Iannone, Celestina, 377–378 immigrant detention Melki case and, 511–512 systemic reforms of, 512 immigration. See also Zambrano case from Algeria, 513–515 under Franco-Algerian agreement, 513 Chen’s requests for, 208 into France, 512 under Franco-Algerian agreement, 513–514 Ruiz Zambrano and, 227–228 social security contributions and, 228 immigration law, Zambrano case and, 230–231 incidental direct effect doctrine, 375 incorporation theory, 309–310, 318 Centros case and, 324 in Daily Mail case, 321 Inspire Art case, 325 indirect discrimination CJEU rulings on, 419–420, 444–445 defined, 420 Equal Pay Directive and, 421 in EU, 435–436, 438–440 freedom of movement for employees, 438 in Jenkins v. Kingsgate, 418

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616

Index

indirect discrimination (cont.) Lester and, 585 Racial Equality and Employment Equality Directive and, 439 under Sex Discrimination Act 1975, 422–423, 432–433 under TFEU, 420 welfare expansion through, 438 indirect effect doctrine, 375 indiscriminate discrimination, 418 infringement procedures, 98–99, 122 in Belgian education policy, 455 in Italy, 343 insolvency, 328–329 Inspire Art case, 325–326 Private Limited Liability companies and, 326 integrated labor markets, 499–502 intercourt competition approach, to national courts, 587–588 inter-governmentalism empirical liberal, 8–9 historical, 8–9 Inter-Institutional Framework Agreement, 532 international law. See also corporate law Commission EEC v. Luxembourg and Belgium and, 127–130 Dairy Products case under, 127–130 ERTA as influence on, 152 nationality law and for asylum seekers, 239–240 for children of refugees, 239 for stateless children, 239 self-help countermeasures in, 128–129 International Transport Workers Federation (ITF), 492–493, 498–499 international treaties. See treaties Internationale Handelsgesellschaft ruling as archetype case, 159–162 BVerfG response to, 158–159, 161–162, 169–174 CAP and, 159–160 community law and, 158, 169 crisis as result of, 175–176 EU law and, 159–162 constitutional elements of, 158 FAC and, 159–164, 173–174 Ehlermann and, 160 human rights jurisprudence through, 157–158

judicial components of, 158–159 miscalculations of, 164–166, 176–177 costs of, 164–166 explanations of, 166 Pescatore on, 176–177 Solange I ruling, 158–159 inter-state retaliation mechanisms, 130 Ireland. See also Chen case; Commission v. United Kingdom abortion bans in ECtHR rulings on, 397–398 exceptions to, 400–401 Protection of Life During Pregnancy Act and, 400–401 US involvement in, 202 Irish Health Act in, 393–394 nationality laws in, changes to, 238 Private Limited Liability companies in, 313 protections for non-citizen parents in, 202, 209 Public Limited Liability companies in, 313 Irish Health Act, 393–394 Italy. See also Centro Europa 7 srl case; Frankovich case administrative courts in, 352 Brussels Convention and, 361 Civil Code in, 353 community law in, 349, 352 Consiglio di Stato in, 249, 251–253 Constitutional Law in, 250 EU directives in, transposition of, 343 European Commission judgments against, 354–355 fictio litis doctrine, 340 freedom of information principle in, 247–248 infringement procedures in, 343 judges in rejection of community rules in, 341 training programs for, 341 law training in, 346–347 legal scholarship in, 346–347 community law in, 349 after Francovich case, 345–349 legal tradition in, non-canonized case selection for, 23–24 Limited Liability companies in, 327 media pluralism in, 246, 254–256 Mediaset in, 246–247 part-time work in, 428 RAI in, 246–247

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Index real seat theory in, 309 Supreme Court in, 353–354 Unfair Terms Directive in, 383–384 Italy vs Commission, 292 ITF. See International Transport Workers Federation Jacobs, Francis G., 77, 377 Jann, Peter, 376 Jenkins, Roy, 425–426 Jenkins v. Kingsgate Advocate General opinion on, 429–431 empirical evidence, arguments based on, 427–429 indiscriminate discrimination in, 418 legal background for, 422–424 legal precedents for, 424 litigation strategy in, 425–427 migration of legal ideas in, 418–419, 434–440 systemic discrimination in migration of, as legal idea, 418–419, 434–440 in US, 434–440 Jhering, Rudolph Von, 9–10 Joerges, Christian, 9 Jones, H. C., 447 Josserand, Louis, 10 judges. See also référendaires activism of, 370–371, 387–388 bureaucrat, 75–77 in bureaucratic courts, 61 civil servants and, similarities with, 77 at CJEU, 44–45 judges’ chambers, 66 tenure terms for, 70–71 in ECtHR, tenure terms for, 71–73 in Hungary equality principle in, 473 under Fundamental Law of Hungary, 471–472, 477–479 judicial independence of, 472–479 retirement age for, lowering of, 471–472, 477 in Italy rejection of community rules in, 341 training programs for, 341 référendaires as influence on, 74–75 référendaires’ transition to, 77–79 registry lawyers as, 77–79 tenure for at CJEU, 70–71

617

in commonwealth high courts, 70 at ECtHR, 71–73 in US courts, 70 training programs for, 341 judicial realism, 196–197 judicial review, through EU-US PNR Agreement, 535–536 juge rapporteur, 140–141 junior registry lawyers, 63 jurisconsult, office of, 67–68 jurisprudence. See breakfast jurisprudence; sociological jurisprudence Justice Contained (Conant), 590–591 Kenney, Sally, 67 Kochenov, Dimitry, 241, 586 Koster, H. J. de, 188 Kraus, Herbert, 171–173 Kukovec, Damjan, 501 labor law. See also Viking judgment right to strike, 492–495, 497–498 under Treaty of Lisbon, 503 Viking judgment and, 491 yellow card procedure, 503 social dumping and, 492–493 labor markets. See also integrated labor markets women in, 427–428 Lambert, Eduard, 10 Lamothe, Dutheillet de, 142–145 landmark cases, for ECJ. See also Internationale Handelsgesellschaft ruling; Parti Ecologiste ‘Les Verts’ v. Parliament for constitutional issues, 26 historical value of, 580 isolated authors in, 29 judicial value of, 579–580 lawyers in, 581–586 as legal genre, 26–30 as legal turning point, 29 litigants in, 581–586 Matthew effect, 27–28 positivist legal history for, 29–30 wealth and worth in, reconception of, 28–30 languages, official in bureaucratic courts, 73–75 at CJEU, 37–38 expansion of, 41 pivot languages, 42–44

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618 law. See also community law; corporate law; European Union law; German law; international law; nationality law administrative, 27, 352 constitutional, 86–88 comparative, 381–383 human rights, 157–158 immigration, 230–231 Law and Society Movement CLS challenges to, 11 Legal Realism and, 10–11 Law on Foreigners, 230, 243 lawyer-linguists, 48–49 in bureaucratic courts, 62 at CJEU, 64 EPSO and, 48–49 lawyers as CJEU, 581–586 at ECJ, 581–586 in landmark cases, 581–586 registry as judges, 77–79 junior, 63 Lecourt, Robert, 28, 32, 115–116, 131–132, 599 at ECJ, 166–167 Leeuven, Karin van, 116 Legal Realism Law and Society Movement and, 10–11 sociological jurisprudence and, 10–11 legal scholarship, in EU for corporate law, 332–334 after Frankovich case, 345–349 in Italy, 346–347 community law in, 349 after Francovich case, 345–350 after Van Gend en Loos case, 107–111 meaning of judgment, 109–111 Léger, Philippe, 377 Lenaerts, Koen, 1, 77, 83. See also Parti Ecologiste ‘Les Verts’ v. Parliament Leonardo da Vinci program, 463–464 Lester, Lord Anthony, 419, 425–427 indirect discrimination and, 585 LIBE. See Committee on Civil Liberties, Justice and Home Affairs Lichtenstein, incorporation theory in, 309 limited companies. See Private Limited Liability companies; Public Limited Liability companies Lindebloom, Justin, 241, 586 Lindseth, Peter, 588

Index Linos, Katerino, 441 Lisbon Treaty, 297, 591 litigation, litigants and general effects of, 529 in landmark cases, 581–586 special effects of, 529 Llewellyn, Karl, 10 Luban, David, 8 Luxembourg. See also Benelux countries; Commission EEC v. Luxembourg and Belgium; Dairy Products case Brussels Convention and, 361 real seat theory in, 309 under Treaty of Rome, 122–123 Luxembourg court. See Court of Justice of the European Union Luxembourg Protocol. See Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters Maastricht Treaty, 139–140 education policy under, 460–462, 597 free movement of EU citizens before, 180–185 developments outside EEC, 183–184 developments within EEC, 180–185 in judicial cases, 184–185 free movement of EU citizens under, 185–187 Gravier case and, 446–447 non-citizen parents under, 210 vocational training policy under, 460–462 Madsen, Mikael, 59–60 Maduro, Miguel, 22, 278, 498–499 Magnus, Ulrich, 368 Mahoney, Paul, 72, 78 managed mutual recognition, 285–290 automaticity of access and, 286–287 ex post guarantees in, 286–287 prior conditions in, 286 scope of activity in, 286–287 in services industries, 289 Mancini, Giuseppe Federico, 340, 344–345, 371 Mankowski, Peter, 368 Mantello, Gaetano, 295–296 ‘march of progress,’ for EU law, 577 margin of appreciation doctrine, 405 market citizenship, 564 markets. See economic markets

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Index Mastroianni, Roberto, 377–378 Matthew effect, 27–28 Mayr, Sabine, 402–403 McAuliffe, Karen, 598 measures equivalent to quantitative restriction (MEQRs), 281–282, 288 media pluralism, 246, 254–256. See also Centro Europa 7 srl case Mediaset, 246–247. See also Centro Europa 7 srl case Meibom, Hand-Peter von, 94 Melki, Aziz, 506–508 legal representation for, 508–512 Melki case Boucq and, 509 case facts, 506–508 immigrant detention and, 511–512 judicial legacy of, 526–527 QPC in, 509–510 sans papieres in, 507–508, 512–515 Member State liability principle, 338, 344, 350, 355–356 Member States, of EU Brussels Convention in, primacy over national law, 365 on constitutionalisation of EU law, 86 Gravier case and, popular reaction to, 454–457 on greater integration, 596–598 Mengozzi, Paolo, 371 MEQRs. See measures equivalent to quantitative restriction mergers, of corporations, 311–312 Merryman, John Henry, 349 Mertens de Wilmars, Josse, 167–168 Merton, Robert, 27–28. See also Matthew effect ‘metastate,’ EU as, 150, 172–173 migration, from Algeria, 515–516 minimum wage, 442 Mischo, Jean, 355–356 Mitchell, Robert, 414 Mollet, Guy, 91 Mondin, Claudio, 339 Monti, Mario, 502–503 Monti II Regulation, 502–503 morality issues, legal reasoning for, 401–403 prostitution, 401–402, 406–407 Moravcsik, Andrew, 8–9 Mori, Paola, 377–378 MRAs. See mutual recognition agreements Much, Walter, 141

619

Mühlenhöfer, Joseph, 94 mutual recognition of asylum seekers, 297–298 in Cassis de Dijon case, 281, 284–285 conditions for, 293 in corporate law, 316 of criminal justice procedures, 295–297 under Dublin Regulation, 297–298 EAW and, 294–297 ECJ rulings on, 287–288 export of, 299–300 managed, 285–290 automaticity of access and, 286–287 ex post guarantees in, 286–287 prior conditions in, 286 scope of activity in, 286–287 in services industries, 289 in product industries, 292 refugee crises and, 294–299 under Schengen Agreement, 294–295 in services industries, 289–293 of sovereignty clauses, 298 under Treaty of Rome, 281 mutual recognition agreements (MRAs), 289, 299 Nader, Ralph, 382–383 national courts. See courts National Security Agency (NSA), 529 nationality code, in Belgium, 229, 240–241 changes to, 242 children under, 241 nationality law asylum seekers under, 239–240 in Belgium, 228–229 international law and asylum seekers under, 239–240 for children of refugees, 239 for stateless children, 239 in Ireland, 238 UNHCR and, 238–239 Nationality Law (China), 209 NCRF Directives. See New Common Regulatory Framework Directives neofunctionalist approach, to national courts, 587 The Netherlands. See also Benelux countries; Van Gend en Loos case Brussels Convention and, 361 competition policies in, 263–264 Daily Mail case and, 320–322

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620

Index

The Netherlands (cont.) Dutch Alien Act and, 190 Dutch Aliens Order, 178 incorporation theory in, 309 Inspire Art case, 325–326 Segers case, 318–322 vocational training policy in, 456 New Common Regulatory Framework (NCRF) Directives, 251–252 New Legal Historians, on EU law, 7–8 NGOs. See non-governmental organizations Nicola, Fernanda, 580 Nicolaidis, Kalypso, 7–8, 504, 593–594 non-citizen parents, EU protections for. See also Chen case in Ireland, 202, 209 under Maastricht Treaty, 210 right of residence for, 210, 219–220 under TEC, 210 in UK, 202 non-discrimination. See also Defrennes EU citizenship and, 234 non-governmental organizations (NGOs), 476 NSA. See National Security Agency Océano Grupo Editorial SA v. Rocio Murciano Quintero case comparative constitutional law and, 381–383 Consumer Credit Directive and, 387 consumer protections in, 369, 373, 380, 382–383 Consumer Sales Warranty Directive and, 387 doctrinal influence of, 369–373 global context for, 371–372, 381 through judicial activism, 370–371 in Spain, 372 Doorstop Selling Directive and, 387 EEC directives and, 373 EU private law and, 378–380 incidental direct effect doctrine and, 375 indirect effect doctrine and, 375 Italian judges for, 376–378 judicial activism and, 387–388 mortgage housing crisis and, 383–390 référendaires in, 377–378 Saggio and, 370–371, 376 social relevance of, 388 subsidiarity principle and, 379 Tizzano and, 371, 377–378, 389

Unfair Terms Directive and, 379–380, 383–386, 388 Offenses Against the Person Act, 393–394 Office of Information and Regulatory Affairs (OIRA), 299–300 office of jurisconsult. See jurisconsult, office of O’Hanlon, Rory, 303–304 OIRA. See Office of Information and Regulatory Affairs one-child policy, in China, 205–207 enforcement of, 206–207 O’Neill, Maria, 363 ‘one-shooter’ litigator, 542–543 Ophüls, Carl-Friedrich, 93 as aspirational constitutionalist, 171–172 Orbán, Viktor, 472, 479. See also Fundamental Law of Hungary; Hungary O’Rourke, Kevin, 495 parents’ rights. See non-citizen parents Paris Treaty. See Treaty of Paris Parti Ecologiste ‘Les Verts’ v. Parliament constitutional law and, 86–88 EP and, 84–85, 87 EU law and, 89 Treaty of Paris and, 89 Treaty of Rome as influence on, 84–85, 89 part-time work, pay rates for CJEU reasoning on, 431–433 Employment Appeals Tribunal and, 432–433 in EU nations, 428 exclusion from, 436 in US, 429 for women, 436 Pateman, Carole, 408 Patent Directive, 403, 410–412 path dependence, 441–442 People’s Republic of China Constitution of People’s Republic, 206 Family Planning Law in, 206–207 Nationality Law, 209 one-child policy in, 205–207 enforcement of, 206–207 personal legal assistants. See référendaires Pescatore, Pierre, 33, 84, 89, 94, 97, 116 on Common Fisheries Policy, 304 at ECJ, 167–168 on Internationale Handelsgesellschaft ruling, 176–177 as juge rapporteur, 140–141 as reporting judge, 167

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Index Tessili v. Dunlop and, 359–360 on Treaty of Rome, 167–168 PHARE program, 494–495 Phelan, Diarmuid, 411 Philip Morris case. See also cartel control competition policies and, 271–277 corporate participants in, 272 ECJ ruling on, 271 Regulation 17/62 and, 271 Treaty of Rome and, 271 Phillips, Anne, 409 Pierru, Elizabeth, 509 Pineau, Chris, 91 pivot languages, 42–44 Plender, Richard, 216–219, 222–223 pluralism. See media pluralism PNR Agreement. See EU-US Passenger Name Records Agreement Polinsky, Mitchell, 379 Pollack, Mark, 271 positive rights, 567–568 Post, Robert, 134 Pound, Roscoe, 9–10 Prechal, Alexandra, 77 private law, Océano Grupo case and, 378–380 Private Limited Liability companies, 313, 326–327, 329–330 products industries, mutual recognition in, 292 prostitution, 401–402, 406–407 as human rights issue, 407 Protection of Life During Pregnancy Act, 400–401 public goods, 566–568 Public Limited Liability companies, 313, 327, 329–330 public rights, 567 Pyris, Jean-Claude, 543 question prioritaire de constitutionnalité (QPC), 509–510 Raaij, Janssen van, 197 race. See also indiscriminate discrimination reproductive rights and, 409, 413 race-blindness, 441 racial discrimination. See also indiscriminate discrimination under British Race Relations Act 1976, 432 through employment prerequisites, 419. See also Griggs v. Duke Power Co.

621

Racial Equality and Employment Equality Directive, 439 Radin, Margaret Janet, 409 RAI, 246–247. See also Centro Europa 7 srl case Raimondi, Guido, 254 Rasmussen, Morten, 141, 593–594, 599 real seat theory, 309–310 in Centros case, 322–330 in Daily Mail case, 320–322 decline of, 322–330 référendaires (personal legal assistants), 38–39, 45–48, 63 in case studies, 52 within court hierarchy, 64 functions of, 46–47 as judges, 77–79 judges influenced by, 74–75 linguistic constraints for, 47–48 minimum requirements for, 45–46 in Océano Grupo case, 377–378 turnover rates for, 45 refugees. See also asylum seekers; Zambrano case under CEAS, 297 children of, 239 under Dublin Regulation, 297–298 mutual recognition and, 294–299 under sovereignty clauses, 298 Regina v. Pieck, 184 registry lawyers as judges, 77–79 junior, 63 Regulation 17/62, competition policy under, 264–266 in France, 265–266 in Germany, 265 Philip Morris case and, 271 vertical distribution agreements in, 267–268 Regulation 1612/68, 449–450 regulatory competition, under corporate law, 327–329 regulatory regimes commodification of reproductive rights and, 412–413 ECJ as influence on, 561 in Estonia, 494–499 through EU law, 561 reproductive rights. See also abortion; Society for the Protection of Unborn Children v. Grogan assisted, 402–403

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622

Index

reproductive rights (cont.) ARTs, 406, 412–413 commodification of, 409–410 ECtHR rulings on, 414–416 market approach in, 414–416 regulation of, 412–413 in US, 412–413 embryos and defined, 403–404 legal status of, 412 under Patent Directive, 403, 410–412 feminist theory on, 408–413 freedom of movement and, 414–416 future directions for, 408–416 as human rights, 414–416 racialization of, 409, 413 residence rights. See right of residence Rey, Jean, 142 Ricci v. DeStefano, 435 Riese, Otto, 116 Rigal, Etienne, 384–385 right of residence in Chen case, 210, 219–220 CJEU and, 224 for non-citizen parents, 210, 219–220 in Zambrano case, 229–230 right to strike, 492–495, 497–498 under Treaty of Lisbon, 503 Viking judgment and, 491 yellow card procedure, 503 rights. See also human rights law; reproductive rights abortion in Great Britain, 394 under Grogan template, 396–397 positive, 567–568 public, 567 US civil rights, 564 Ringe, Wolf-George, 329–330 Riphagen, Willem, 94 Robert, Pierre, 228, 236. See also Zambrano case Roberts, Dorothy, 409, 413 Roemer, Karl, 106, 114, 269–270, 599 Rome Treaty. See Treaty of Rome Rosas, Emmanuel, 31 Rossi, Rino, 116 Ruiz Zambrano, Gerardo, 224. See also Zambrano case as asylum-seeker, 226–227 non-refoulement obligations, 227

immigration status of, 227–228 social security payments and, 228 Rupp, Hans-Heinrich, 171 on Basic Law, 173–174 Safjan, Marek, 77 Saggio, Antonio, 77 Océano Grupo case and, 370–371, 376 Salvia, Michele de, 72, 74 sans papieres, in Algeria, 507–508, 512–515 Schaülble, Wolfgang, 277 Schengen Agreement, 183–184 community law and, 184 mutual recognition under, 294–295 Treaty of Amsterdam and, 187 Schlochauer, Hans-Jürgen, 171, 173 Schmitthoff, Clive, 317 SE. See Societas Europaea Segers case, 318–322 self-help countermeasures, in international law, 128–129 Serverin, Evelyne, 23–24 services industries for abortion, 395 mutual recognition in, 289–293 under TFEU, definition of services, 394 Sex Discrimination Act 1975, 422–423, 432–433 Sharpston, Eleanor, 77 Shrimpton, Michael, 202, 213–214, 221, 223 Simonet, Henri, 273 Single European Act EP and, 101, 534 free movement of EU citizens under, 182, 186 Social Action Program, 442–443 social dumping, labor law and, 492–493 social welfare policies. See welfare policies Societas Europaea (SE), 311–312 Society for the Protection of Unborn Children (SPUC), 394–395 Society for the Protection of Unborn Children v. Grogan Grogan template as result of, 396–397, 399–407 in ECJ cases, 399–404 in ECtHR cases, 404–407 margin of appreciation doctrine and, 405 as judicial reasoning template, 393–399 for morality issues, 401–403 for prostitution, 401–402, 406–407

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Index political context for, 393–396 sociological jurisprudence in ECJ case law, 32–34 hermeneutic spaces and, 30–32 politics of, 30–34 scholars in, 9–10 Legal Realism and, 10–11 thick descriptions in, 30–34 Socrates program, 463–464 soft law, 565 Solange I ruling, 158–159, 163–164 Somek, Alexander, 7–8 Sorensen, Max, 77 sovereign debt crisis, 559, 569–570 sovereignty for asylum seekers, 298 as gendered concept, 400 mutual recognition for, 298 for refugees, 298 Spaak, Paul-Henri, 90 Spain mortgage housing crisis and, 383–390 Océano Grupo case and, 372, 383–390 Spar, Debora, 412–413 Spinelli, Altiero, 101 Spinosi, Patrice, 511–512 SPUC. See Society for the Protection of Unborn Children stateless children, 239 Stein, Eric, 8–9, 100, 108–109, 141, 593 Strasbourg court. See European Court of Human Rights strikes. See right to strike Strumia, Francesca, 590 subsidiarity principle, 379 subsidiary asylum, 514 supranationalism, 96–97 ‘demoicracy’ compared to, 504 Van Gend en Loos case and, 108 supremacy. See Costa Supreme Court in Canada, 70 in Israel, 70 in Italy, 353–354 in UK, 70 in US, 70 sustained resistance view, of national courts, 587–588 Sutherland, Peter, 274–275 Swank, Gabriel, 271–272 SWIFT agreement, 530, 533, 545–546

623

Switzerland, incorporation theory in, 309 Synder, Francis, 9 Tanzi, Attila, 130 tariff reform, Van Gend en Loos case and, 105 Tavares, Rui, 475 TEC. See Treaty on European Community Temple-Lang, John, 272–275, 594–595 tenure, for judges in bureaucratic courts, for staff and judges, 70–73 at CJEU, 70–71 at ECtHR, 71–73 in commonwealth high courts, 70 in US courts, 70 territorial asylum, 514 Tesauro, Giuseppe, 371, 377–378 Tessili v. Dunlop Brussels Convention and, 357–358 community law and, 364–365 interpretation of, 364–366 politico-legal dilemma from, 362–364 case facts for, 358–360 judicial legacy of, 368 as legal doctrine, upholding of, 366–368 Luxembourg Protocol and, 357–358, 360–362 Pescatore and, 359–360 TEU. See Treaty of the European Union; Treaty on European Union Teubner, Gunther, 9 TFEU. See Treaty on the Functioning of the European Union Timmermans, Christiaan, 77, 332 Tizzano, Antonio, 140, 348 Chen case and, 219–220 Océano Grupo case and, 371, 377–378, 389 Tourkochoriti, Ioanna, 585 Trabucchi, Alberto, 115–116, 118–119, 346, 371, 586, 599. See also Van Gend en Loos case trade asymmetries, between Algeria and France, 515–516 development cooperation and, 516 training policy. See vocational training policy Transatlantic Trade and Investment Partnership (TTIP), 299, 533 translation services, for CJEU, 39–40 for documents, 55–56 expansion of, 40–44 pivot languages and, 42–44

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624

Index

treaties, international, EU law developed through, 85 Treaty of Accession of 1972, 301–302, 307–308 Treaty of Amsterdam, 187 Treaty of Lisbon, 503 EU-US PNR Agreement under, 535, 540 Treaty of Paris, 89 constitutional qualities of, 99–102, 109 diplomatic context for, 90–95 ECSC and, 338–339 European common market and, formation of, 90–95 groupe de rédaction and, 84, 90, 93–94, 97, 112, 117–118 institutional context for, 90–95 Treaty of Rome Belgium under, 122–123 cartel control under, 262–263 Commission EEC v. Luxembourg and Belgium and, 121, 124–127 competition policies under, 263–267 constitutional qualities of, 99–101, 109–110 corporate law under, 314 corporations under, 314 diplomatic context for, 90–95 ECJ interpretation of, 271 education policy under, 458 EEC and, 338–339 EURATOM community and, 90 European common market and, formation of, 90–95 free movement of EU citizens under, 180 German citizens under, 115 groupe de rédaction and, 84, 90, 93–94, 97, 112, 117–118 infringement procedures, 122 institutional context for, 90–95 Luxembourg under, 122–123 mutual recognition under, 281 Pescatore and, 84, 167–168 Philip Morris case and, 271 preamble, 99 Van Gend en Loos case and, 113 vertical distribution agreements under, 267 ‘Les Verts’ influenced by, 84–85, 89 vocational training policy under, 449 WTO and, 128 Treaty of the European Union (TEU), 487 Treaty on European Community (TEC), 187 non-citizen parents under, 210 Treaty on European Union (TEU), 185

Treaty on the Functioning of the European Union (TFEU), 147 cartel control and, 261 Cassis de Dijon case under, 280–281 education policy under, 458–459, 469–470 EU citizenship under, 178 Gravier case and, 447 indirect discrimination under, 420 services under, definition of, 394 vocational training policy under, 449, 451–452, 458–459, 470 Wijsenbeek case and, 200 Tribunal du Travail, 231–233 Tridimas, Takis, 350–351 Triepel, Heinrich, 170 TTIP. See Transatlantic Trade and Investment Partnership Überseering case, 324 UK. See United Kingdom UK Company Law, 333–334 Unfair Terms Directive, 379–380, 383–386, 388 UNHCR. See United Nations High Commissioner for Refugees United Kingdom (UK). See also Chen case; Commission v. United Kingdom; Great Britain; Ireland; Jenkins v. Kingsgate; Society for the Protection of Unborn Children v. Grogan British Race Relations Act 1976 in, 432 Company Law in, 333–334 Daily Mail case and, 320–322 education policy in, 456–457, 468–469 Employment Appeals Tribunal, 432–433 Equal Pay Act in, 422, 437 free movement of EU citizens and, 186 Limited Liability companies in, 327 part-time work in, 428 Private Limited Liability companies in, 313, 330 protections for non-citizen parents in, 202 Public Limited Liability companies in, 313 Segers case, 318–322 Sex Discrimination Act 1975 in, 422–423, 432–433 vocational training policy in, 456, 468–469 Zambrano case as legal influence in, 241 United Nations High Commissioner for Refugees (UNHCR), 238–239 United States (US)

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Index APD and, 552 bond markets in, 571 civil rights in, expansion of, 564 commodification of reproductive rights in, 412–413 corporate law in, 309–310, 316–318 corporations in conflict of law rules for, 314 in Delaware, 316–318 establishment of, 309–310 crisis of democracy within, 558–559 disparate impact doctrine in, 437–438, 442 economic markets in dislocation of, 562–572 fiscal discipline in, 569–570 integration of, 558–560, 562–572 legal history as influence on, 559–560 rights in, 562–572 Equal Pay Act in, 422, 443–444 disparate impact doctrine and, 437 FLSA in, 564 FOIA in, 545–546 Irish abortion bans and, financial influence on, 202 judges’ tenure in, 70 legal formalism in, 555 legal history in, 553–560 contingency of, 554–555 discontinuity of, 554–555 doctrinal analysis of, 555 as ideologically divisive, 557 OIRA in, 299–300 part-time work in, 429 sociological jurisprudence in, 9–10 systemic discrimination in, 434–440 transfer of financial messaging data from, 533 Uri, Pierre, 94–95 US. See United States Valls, Manuel, 513 Van den Bergh, Roger, 379 Van Gend en Loos case, 21–23, 25 Commission EEC v. Luxembourg and Belgium case and, legal connection with, 130–132 Dairy Products case and, legal connection with, 130–132 ECSC and, 104–105 EEC and, 104–105 EURATOM and, 104–105

625

France and, 115 Germany and, 115 historical analysis of, 111–117 interpretation of judgment, 117–120 judges in, 116 Lecourt and, 115–116 legal legacy of, 132–133 legal scholarship as result of, 107–111 meaning of judgment, 109–111 summation of, 104–107 supranationalism and, 108 tariff reform and, 105 Trabucchi and, 115–116 Treaties of Rome and, 113 Vauchez, Antoine, 7–8, 59–60, 69, 75, 582–583, 598 Veld, Sophie In ‘t, 544–546 vertical distribution agreements, in competition policy, 266–270 in France, 269 in Germany, 270 under Regulation 17/62, 267–268 under Treaty of Rome, 267 ‘Les Verts’. See Parti Ecologiste ‘Les Verts’ v. Parliament Viking judgment economic context for, 496–497 freedom of establishment and, 497–498 FSU and, 492–493 institutional change after, 499–502 cultural dimension of, 500 functional dimension of, 500 political dimension of, 500 integrated labor market after, 499–502 ITF and, 492–493, 498–499 judicial legacy of, 499–504 legal background of, 492–495 right to strike and, 491, 497–498 vocational training policy, in EU codification of competencies, 460–462 Comett program, 458 Erasmus program, 458–460 European Commission and, 451 freedom of movement for EU workers and, 449–450 Gravier case and, 449–457, 467–469 competencies in, 457–458 EU citizenship and, 465–467 implementation of programs after, 458–460 individual rights and, 457–458, 465–467

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626

Index

vocational training policy, in EU (cont.) legal doctrine for, 448 harmonization of, 462 higher education and, 453 distinctions between, 456 Leonardo da Vinci program, 463–464 under Maastricht Treaty, 460–462 from 1974–1985, 449–451 from 1985–1995, 457–458 objectives of, 452 under Regulation 1612/68, 449–450 under TFEU, 449, 451–452, 458–459, 470 training definitions in, 453–454 under Treaty of Rome, 449 in UK, 456, 468–469 Waldby, Catherine, 414 Walker, Neil, 85 Warzoulet, Laurent, 595–596 Weiler, Joseph H. H., 8–9, 23, 100, 130, 278, 579 welfare policies, in EU, 562–563, 565 through constitutional asymmetry, 565 regulation of, 568 Wengler, Wilhelm, 171, 173–174 West Germany. See Germany Wijsenbeek, Florus Ariël, 583–584 arrest of, 186 on Dutch Alien Act, 190 Dutch Aliens Order violation by, 178 as integrationist, 188–189 personal and political background of, 188–189 Wijsenbeek case, 187–199. See also freedom of movement background of, 179–187 community law and, 194–195 ECJ ruling on, 195–197 political objectives of, 197–199 facts in, 189–197 judicial legacy of, 179, 200 judicial proceedings for, 189–197

judicial realism and, 196–197 legal context for, 179–187 litigation strategy for, 197–199 incremental approach in, 198–199 political context for, 187–188 TFEU and, 200 Williamson, Jeffrey, 495 wine industry, in Algeria, 522–524 Witte, Floris de, 400 Wohlfarth, Ernst, 94 women. See also abortion; feminism; indirect discrimination; reproductive rights under Equal Pay Act, 422, 437 Equal Pay Directive and, 421 in labor markets, 427–428 part-time work for, 436 under Sex Discrimination Act 1975 in, 422–423, 432–433 social inequality of, 437 unequal pay for, 440–444 World Trade Organization (WTO), Treaty of Rome and, 128 yellow card procedure, 503 Yudkivska, Ganna, 78 Zambrano case CJEU influenced by, 232–235 court considerations as factor in, 235–237 for EU citizenship issues, 233–235 facts of, 226–228 judicial legacy of, 224–226, 237–244 legal relevance, 237–241 political relevance, 241–243 Law on Foreigners and, 243 legal context for, 228–231 Belgian nationality law, 228–229 immigration law as factor in, 230–231 right of residence and, 229–230 at Tribunal du Travail, 231–233 UK law influenced by, 241

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