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Eu Remedies Notes

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EU 4 Remedies

EU

EU Abbreviations: ECJ European Court of justice MSs Member states (of the EU) EP European Parliament CFSP Common Foreign and Security Policy TEU Treaty on EU (Maastricht) TFEU Treaty on the Functioning of the EU (Rome) EEC Treaty Treaty establishing the Economic European Community DE Direct effect

REMEDIES

ART 263: ACTION FOR ANNULMENT Necessary Elements (1) Bodies amenable to JR/time limit

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See art 263(1) for scope
The Council, Commission and ECB: including legislative acts, other than recommendations/opinions
EP, European Council and EU bodies/offices/agencies: acts intended to produce legal effects against third parties.

Lisbon Treaty explicitly included EC and EU bodies/offices/agencies, though this is a codification of prior ECJ jurisprudence which already brought them within scope of JR.

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Time limit: laid out in art 263(6) - within 2 months of publication/notification to A, or in absence of this, within 2 months after it came to A's knowledge.
After time limit expires, unchallenged decision becomes definitive.
Only exception is for measures which have such manifest and serious defects they are regarded as non-existent (BASF v Commission (PVC Cartel), 1992) - HIGHLY exceptional!
Rationale = legal certainty!(2) Acts subject to review - art 263(1)

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Must be LEGALLY BINDING: acts other than recommendations and opinions = regulations, decisions and directives.

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Post-Lisbon, both legislative and non-legislative acts can be binding hence reviewable - look at substance, not just title/form.

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JURISPRUDENCE:
IBM, 1981: early case illustrating this. "any measure the legal effects of which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position" will be reviewable. The form is immaterial! Here, it was statement of objections in investigation - court said must be final measures with intention to impact indiv's legal position, not intermediate measures (latter has no legal effect).

On the facts, letter was merely initiation of the competition procedure (preparatory stage), and did not alter A's legal position in itself. 1

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Disputed measure must be final (not preparatory, as is often the case in a multi-stage procedure), though legal defects in the preparatory measures leading up to the final one can be relied upon in an action directed against the latter.
France v Commission, 1997: ECJ held that this list is not exhaustive, and other acts which are sui generis can also be reviewed as long as they have binding force or produce legal effects.
Commission v Council, 1971: ECJ held that Council's proceedings and Resolution had definite legal effects, hence was subject to review. Must also be adopted by Union institution/body/agency.
Includes legislative acts, acts of the Council/Commission/ECB.
Acts of the EP which have legal effects on third parties.

Les Verts v EP, 1986: French political party challenged reimbursement decision by EP. EP not usually one of the institutions against which you would use action for annulment. Hence, court had to adopt constitutional approach - if we have institution like EP which creates legal effects for applicants, then such acts will be challengeable before ECJ.
Also includes acts of European Council with legal effects on third parties.
Acts of bodies/offices/agencies of the Union intended to produce legal effects on third parties.

Hence, when ECB became main supervisory bank over many MS banks, acting like securities commission, decisions could still be challenged!(3) Applicant's standing - art 263(2)-(3)

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Privileged applicants:
Art 263(2): action can be brought by MS, EP, Council or the Commission
Automatic, absolute right to bring proceedings. No need to provide any political reasons. (Comm v Council, 1987)
Can be brought even where decision is addressed to another.
NB: EU law does not oblige MS to bring action for benefit of citizens, but neither does it preclude national law from containing such an obligation.
EP: prior to Maastricht Treaty, it did not have formal privileged status, and in the Comitology case, 1988, ECJ rejected EP's argument that it should have unlimited standing.

In the Chernobyl case, 1990, however, ECJ then held that EP could have quasi-privileged status to protect its own prerogatives.

Chernobyl reflected in re-drafting of art 173(3) EEC.

Nice Treaty then added EP to the list of privileged applicants.

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Quasi-privileged applicants:
Art 263(3): ECB, Court of Auditors and Committee of the Regions only have standing to defend their own prerogatives.
This category was essentially codification of case law (ECJ developed it saying necessary for constitutional reasons)

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European Council is a body amenable to review, but is not listed as a privileged/quasi-privileged body under art 263. Even odder because EC has right to bring action for failure to act under art 265. Bodies/offices/agencies of the Union are also subject to possibility of being defendants, without being recognised as applicants. But most agencies could be legal persons under art 263(4)!

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***Non-privileged applicants - art 263(4) 3 possible scenarios where natural and legal person can bring direct action....

I. Addressee of decision

II. Act is of direct and individual concern to A
Rationale: if private company/individual is addressee of Comm decision, can challenge under I. But how about his competitors, who are also affected directly and individually? This was original intention. But subsequent development rather revolutionary. 2

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"act": pre-Lisbon wording was "decisions". Now encompasses all legislative acts and nonlegislative acts, as long as they produce legal effects. Codification of ECJ jurisprudence that looked to substance not form. DIRECT CONCERN:

General principle (Les Verts): where EU measure directly affects A's legal situation, and leaves no discretion to the (intermediate) addressees of the measures as to implementation. Direct causal relationship

International Fruit case, 1971: Reg provided for system of import licences. ECJ held that national authorities did not enjoy any discretion as to the licences/conditions of granting licences. The Commission's decision and measure affected and impacted A directly - no possibility of intervention by national authority.

Piraiki-Patraiki, 1985: national authorities' use of discretion is entirely theoretical.

Cf Municipality of Differdange v Commission, 1984: Comm authorised Luxembourg to grant aid to steel firms on condition of reduction of capacity. ECJ held there was no direct concern - Comm's decision did not identify the affected establishments (steel firms), nor the factories which would have to be shut down cos of reduction of production.

Left margin of discretion as to implementation and choice of factories to be closed to national authorities and the businesses!
INDIVIDUAL CONCERN:

The predecessor of art 263(4) was art 230(4) EC: focus on substance rather than form, so that measure in the form of a Reg could be found to be of direct and indiv concern!

The new article does not encourage this, cos of the formalistic test for legislative acts. By contending that Court should look to substance of a measure across the categories of legal acts, it would render what was a legislative act invalid, should it be re-classified as a delegated act, because of the lack of adherence to formal procedures.

BASIC TEST: **Plaumann v Comm, 1963: ECJ held that treaty provisions on standing must be interpreted broadly. Usually, wouldn't say that Comm decision addressed to German govt can be challenged by individual. Still, need to prevent actio popularis.

There is individual concern: if

decision affects them by reason of certain attributes which are peculiar to them, or

by reason of circumstances in which they are differentiated from all others,

hence distinguished them individually just as in the case of the person addressed.

However, A was importer of clementines, this was commercial activity which anyone could take up. Hence no indiv concern!

Criticism:

Pragmatically speaking, the test is economically unrealistic - limited number of firms in industry is determined by supply and demand. Further, it takes time and resources for potential traders to enter the market (ignores practical realities that determine number of traders in an open category).

Conceptually speaking, the test imposes too high a threshold, making it literally impossible for A to succeed. Further, ECJ has held that test for standing should be judged when application for review is lodged, yet ECJ also saying that activity could be carried out by anyone at any time - focus shifts to ill-defined future.

Hence, basically impossible unless challenged decision had retrospective impact!

Because of element of retroactivity (looking to closed class of applicants), we exclude potential applicants who could be affected much more in the future.

JURISPRUDENCE: higher degree of individualisation than present in Plaumann is required:

Toepfer, 1965: applied for import licence before measure enters into force

Piraiki-Patraiki, 1985: pending contracts entered into before measure was adopted. 3

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Comm v Infront, 2008: where measure has specific object of altering rights acquired by indiv prior to adoption of the measure. Measures in the form of Regulations/Directives?

True Regs are not open to review (too general - no indiv concern!)

Abstract terminology test (stricter!)

Exemplified in Calpak SpA v Comm, 1980: ECJ has to look beyond form, to determine if the measure is really a Reg in substance. A Reg will be a true Reg if it applied to 'objectively determined situations and produces legal effects with regard to categories of persons described in a generalised and abstract manner', hence not be open to review.

Criticism: always possible to draft norms in this way, especially since ECJ held that knowledge of number/identity of those affected would not preclude norm from being held to be a true Reg, immune from attack.

Closed category test

According to the above, true Regs are not open to review.

BUT in Codorniu v Council, 1994, ECJ held that a measure might be a 'true' Reg according to the abstract terminology test, yet nonetheless be of indiv concern!

Despite this attempt at liberalisation, the post-Codorniu approach has largely been pure Plaumann.

Hence, Buralux v Council, 1994: ECJ held mere fact that it was possible to determine number/identity of those affected did not mean that Reg was of indiv concern, as long as the measure was abstractly formulated. Indiv concern to be determined by the Plaumann test. Delegated acts? Probably quite hard for A to show standing, since delegated acts are defined as non-legislative acts of general application. Instances where ECJ has been more liberal in finding standing: i. Specific right being infringed: Codorniu, 1994: first opening up of the Plaumann test. Court held if you have a specific right that the rule invalidates (here, trademark invalidated by regulation), then A might have standing.

Impact not that great...seen more as a once-off decision. Extreme facts Reg completely took away the right. Never successfully argued thereafter, though quote often.

Cf Cassa Nazionale v EU Council, 1996: court rejected A's attempt to demonstrate such a "specific right". High threshold. Requirements unclear. ii. In the interests of democracy - Les Verts v EP, 1986. iii. A involved in procedure where procedural regulations laid down private parties' rights of participation, in recognition of their legitimate interest in outcome. Usually happens in the following 3 subject areas... a. Anti-dumping

Anti-dumping regs meant to prevent non-MSs from selling goods too cheaply within the EU

Anti-dumping duties had to be imposed by Reg (not decisions), hence if Court held that Reg was not actually a Reg, then arguably Comm didn't have power to impose the measure.

Plausible applicants:

1) firm initiating complaint about dumping, who felt the duty was too low;

2) producer subject to anti-dumping duty (Allied Corporation case, 1984 - can have indiv concern insofar as A was identified in the measure or involved in the preliminary investigation);

3) importer of product against which anti-dumping duty was imposed (Extramet v Council, 1991: importer had standing, but only cos it was largest importer, was also end-user, and business activities were highly dependent on and affected by these imports). b. Competition

Regulated by art 101 and 102 TFEU. 4

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i. Old regime allowed A to make application to Comm, showing evidence of breach of these articles (under art 3(2) Reg 17)

Metro GmbH v Comm, 1977: decision of Comm was addressed to another, but adopted cos of complaint submitted by M. ECJ held that those entitled (under art 3(2)) to make application to Comm should be able to institute proceedings to protect their legit interests, if their request is not fully complied with. c. State aid

Provision of state aid is regulated by art 107 to 109 TFEU (prevent distortion of free mkt competition due to govt assistance)

While there is no directly comparable procedural rights as in (ii) above, ECJ in COFAZ v Comm, 1986, reasoned by analogy to the Metro and Timex cases, holding that As played a comparable role, especially cos art 108(2) permitted undertakings concerned to submit comments to Comm. Hence undertakings were granted standing, but only if their market position was significantly affected by the disputed aid!
Extent of damage suffered: only one case so far (Extramet) - exceptional!

Extramet: importer of potash suffered from reg that favoured the only union producer - entire business in danger! Some would say this is anti-dumping above, but most agree that court showed willingness cos of extreme manifest impact. More generous in allowing challenge.

Vs restrictive interpretation of Plaumann? Closed class + specific duty imposed by Treaty on EU institution to take A's case into account Earlier case law seemed to imply either characteristic would suffice...BUT later law indicates requirements are cumulative

Piraiki-Patraiki, 1985: cotton producers distinguished based on whether they already had contracts for export of cotton prior to before import ban was imposed closed class in itself sufficient

Cf Sofrimport, 1990; traders with goods already in transit allowed to challenge import ban on apples, but only if disputed rules required Comm to take account of special position of goods in transit - closed class in itself not sufficient

Antillean Rice Mills, 2001: applied Piraiki-Patraiki and held that there was specific duty here to concerns of litigant into account. But here, if you look closely, there wasn't exactly a closed class.

Do associations have standing? FEDEROLIO guidelines trade association will have standing in 3 situations (only): a. Where legal provision expressly grants TA series of procedural rights - CCE de Vital and Others v Comm, 1995 b. Where trade association represents interests of undertakings entitled to bring proceedings in their own right, individually Confederation Espanola de Transporte de Mercancias v Comm, 2000 c. Where trade association is differentiated because its own interests as an association are affected, especially its position as negotiator - itself has indiv standing under Plaumann - Van der Kooy v Comm, 1988
If not, no standing, since non-members could still enter economic activity, even if at present, all those possibly concerned are your members - Greenpeace v Comm, 1998.**Reform of test of individual concern?

ECJ's approach often criticised as being too restrictive, but ECJ defends it on grounds of Treaty giving comprehensive mechanism for legal protection, cos of availability of indirect route under art 267 TFEU.

Much struggle by private companies to overcome this strict standard - still prefer direct action rather than prelim ref route, since no need to convince national court; faster and cheaper.

Most notable criticism is [AG Jacobs'] scrutiny in UPA v Council, 2002: 5

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Current shortfalls
+- indirect route (preliminary ruling) is not sufficient, since A can't control whether ref is made, what measures are referred, nor what grounds of invalidity of raised = no true right of access. Hence, there might be denial of justice.
+- legal certainty militates in favour of a general measure being subject to review ASAP, not only after implementing measures have been adopted
+- indirect challenges are subject to procedural disadvantages (eg. Delay, costs)

Critique of proposed solutions
+- these deficiencies cannot be overcome just by allowing exceptional standing to A who has no way of triggering reference for prelim ruling under national law - no basis in the Treaty and would lead to inequality across MSs. Would require EC courts to interpret and apply national rules!
+- also insufficient to oblige MSs' legal systems to ensure that prelim refs are generally available - doesn't address procedural issues, difficulties of monitoring/enforcement, interference with national procedural autonomy

Proposed solution
+- hence, only way is to reform the test for indiv concern itself, so that A is deemed individual concerned where the Community measure has, or is liable to have, a substantial adverse effect on his interests.
-resolves all the above problems
-removes current anomaly that the more the number of persons affected, the less likely that effective JR will be available
-replaces increasingly complex and unpredictable rules on standing.

BUT ECJ in UPA then declined to follow AG Jacobs' approach. Instead:

Reiterated that Treaty established complete system of legal remedies and procedures

***it is for MSs to establish system of legal remedies and procedures which ensure respect for right to effective judicial protection

National courts should interpret and apply national procedural rules on exercise of rights of action compatibly with allowing challenges to validity of Community acts

ECJ cannot examine and interpret national law - beyond its jurisdiction

While condition of direct and individual concern must be interpreted in light of principle of effective judicial protection, can't be too liberal and effectively set aside the condition which is expressly stated in the Treaties, since this would go beyond jurisdiction conferred by Treaties. So today, Plaumann is still good law!
Criticism of ECJ's reasoning

ECJ mostly ignored AG Jacobs' analysis of the difficulties indivs face in using art 267 (indirect route) - procedural, and its nature as a reference system. Also substantive - indiv might not be able to challenge illegality of the measure in national courts without first acting in contravention of it.

ECJ's strategy of getting national courts to interpret national procedural rules compatibly to allow applicants to challenge EU norms of general application does not resolve procedural difficulties, nor problems cos of discretionary nature of the indirect route! Doesn't address issue that A might first have to contravene the rule!

Preliminary rulings will go to ECJ, yet same issues could have been heard by General Court if admissible as a direct challenge.

ECJ's argument based on boundaries of legitimate Treaty interpretation is unconvincing - Treaty always required indiv concern, but it is ECJ's overlyrestrictive interpretation of this that is being criticised. ECJ has filled gaps for other parts of art 263 where it felt it was warranted - not evident why AG Jacobs' interpretation would transgress bounds of interpretation.----6

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III.-In normative terms, those who have suffered substantial impact should have access to JR! This aligns with national legal orders. No reason why there would be increase in number of cases: fact that art 263 is restrictive forces As to use art 267, over which ECJ has less control. EU Courts can also influence number of cases brought through the standards of review it applies.

Regulatory act which does not entail implementing measures, & is of direct concern to A

Introduced by the Lisbon Treaty, to amend the rules on standing following above criticism!

Proponents thought ECJ would give "regulatory act" wide interpretation, so we could do away with the problematic "individual concern". But ECJ didn't follow expectations instead, looked at textual meaning - said since "legislative acts" is terminology used elsewhere, then "regulatory act' must mean something different!

Hence, definition of this term is super important - determines barriers A must surpass!

Inuit case, 2011: Gen Court confirmed that "regulatory act" covers all acts of general application apart from legislative acts. Legislative acts can only be challenged under first or second channel!

"regulatory act" = secondary norms, not primary legislative acts.

Doesn't sit well with Lisbon classification of legal acts: does it mean any legally binding act (legislative/delegated/implementing), or does it have to take form of regulation/decision which does not entail implementing measures?

It has been proposed that the narrowest interpretation aligns with the drafters' intent: only delegated acts in the form of regulations/decisions that are of direct concern and do not entail implementing measures.
but if this is so, it doesn't really address the above problems on standing.

Hence, to alleviate the difficulties, should be interpreted as covering any legislative, delegated or implementing act which does not entail implementing measures (hence excluding directives)
remains to be seen if ECJ will adopt this approach

"implementing measure"

Natural meaning: Regulations and (most) decisions do not require any measure to be implemented into the national legal order - directly applicable.

But directives do!

True that for Regs, MSs might need to modify laws to comply with/fulfil demands, but this should not preclude recourse to the liberalised standing rules - would also cause inconsistency across MSs. Further, this factor depends on national law, not the EU regulatory act itself, hence not really accurate to say that the EU act 'entailed' implementing measures.

**Microban case, 2011: general court found that an act that does not entail implementing measure must leave no discretion to its addressee - implementation, if any, must be purely automatic and result only from Community rules (not any other rules). If there's only one valid legal option, then there is no true discretion.
see new case of Arcelor.

**must be aware of the above discussion when answering problem question!

ART 277: PLEA OF ILLEGALITY

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Used where A wishes to challenge, in the course of proceedings initiated for a different reason, the legality of some other measure. Latter measure being challenged indirectly must be a general act. Eg. When challenging a decision of direct and indiv concern, A wishes to raise legality of the Reg on which the decision is based.
See Simmenthal for typical case Same grounds of annulment as for annulment. Hence NOT an independent course of action.
Time limit for principal action still applies!

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