Summary
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Keywords
EEC - NON-CONTRACTUAL LIABILITY - LEGISLATIVE MEASURE INVOLVING CHOICES OF ECONOMIC POLICY - LIABILITY OF THE COMMUNITY - CONDITIONS - ABSENCE THEREOF
( EEC TREATY , ART . 215 , SECOND PARAGRAPH AND COUNCIL REGULATION ( EEC ) NO 563/76 )
Summary
THE COMMUNITY DOES NOT INCUR NON- CONTRACTUAL LIABILITY FOR DAMAGE CAUSED TO INDIVIDUALS THROUGH THE EFFECTS OF A LEGISLATIVE MEASURE WHICH INVOLVES CHOICES OF ECONOMIC POLICY UNLESS A SUFFICIENTLY SERIOUS BREACH OF A RULE OF LAW FOR THE PROTECTION OF THE INDIVIDUAL HAS OCCURRED . THEREFORE THE FINDING THAT A LEGISLATIVE MEASURE IS NULL AND VOID IS INSUFFICIENT BY ITSELF FOR THE COMMUNITY TO INCUR LIABILITY .
INDIVIDUALS MAY BE REQUIRED , IN THE SECTORS COMING WITHIN THE ECONOMIC POLICY OF THE COMMUNITY , TO ACCEPT WITHIN REASONABLE LIMITS CERTAIN HARMFUL EFFECTS ON THEIR ECONOMIC INTERESTS AS A RESULT OF A LEGISLATIVE MEASURE WITHOUT BEING ABLE TO OBTAIN COMPENSATION FROM PUBLIC FUNDS , EVEN IF THAT MEASURE HAS BEEN DECLARED NULL AND VOID .
IN A LEGISLATIVE FIELD SUCH AS THE ONE IN QUESTION , IN WHICH ONE OF THE CHIEF FEATURES IS THE EXERCISE OF A WIDE DISCRETION ESSENTIAL FOR THE IMPLEMENTATION OF THE COMMON AGRICULTURAL POLICY , THE COMMUNITY DOES NOT THEREFORE INCUR LIABILITY UNLESS THE INSTITUTION CONCERNED HAS MANIFESTLY AND GRAVELY DISREGARDED THE LIMITS ON THE EXERCISE OF ITS POWERS .
THIS IS NOT SO IN THE CASE OF A MEASURE OF ECONOMIC POLICY SUCH AS THAT IN THE PRESENT CASE , IN VIEW OF ITS SPECIAL FEATURES ;
- IT AFFECTED VERY WIDE CATEGORIES OF TRADERS , IN OTHER WORDS ALL BUYERS OF COMPOUND FEEDING-STUFFS CONTAINING PROTEIN ;
- ITS EFFECTS ON THE PRICE OF FEEDING- STUFFS AS A FACTOR IN THE PRODUCTION COSTS OF THOSE BUYERS WERE LIMITED ;
- THIS PRICE INCREASE WAS PARTICULARLY SMALL IN COMPARISON WITH THE PRICE INCREASES RESULTING , DURING THE PERIOD OF APPLICATION OF THE REGULATION , FROM THE VARIATIONS IN THE WORLD MARKET PRICES OF FEEDING-STUFFS CONTAINING PROTEIN ; THE EFFECTS OF THE REGULATION ON THE PROFIT-EARNING CAPACITY OF THE UNDERTAKINGS DID NOT ULTIMATELY EXCEED THE BOUNDS OF THE ECONOMIC RISKS INHERENT IN THE ACTIVITIES OF THE AGRICULTURAL SECTORS CONCERNED .
Parties
IN JOINED CASES 83 AND 94/76 , 4 , 15 AND 40/77
THE UNDERTAKING BAYERISCHE HNL VERMEHRUNGSBETRIEBE GMBH & CO . KG , GUT HEINRICHSRUH ,
BERND ADLEFF , SOLE TRADER , GRASSLFING ,
THE UNDERTAKING F . X . ZOLLNER KG , REGENSBURG , AND
CHRISTOF SCHWAB , AGRICULTURAL ENGINEER , GUT SCHWABEN ,
COUNSEL : F . MODEST , A . HEEMANN , J . GUNDISCH , G . RAUSCHNING , K . LANDRY , W . ROLL , B . FESTGE , H . HEEMANN , P . WEGEMER , OF HAMBURG , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF FELICIEN JANSEN , HUISSIER DE JUSTICE , 21 RUE ALDRINGEN ,
AND JOHANN SEIDL , REGENSTAUF , REPRESENTED BY MESSRS VON BOETTICHER , BERNET AND PARTNER , MUNICH , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ERNST ARENDT , 34 B RUE PHILIPPE II ,
APPLICANTS ,
V
THE EUROPEAN ECONOMIC COMMUNITY , REPRESENTED BY ITS INSTITUTIONS ,
1 . THE COUNCIL , REPRESENTED BY ITS LEGAL ADVISER , BERNHARD SCHLOH , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF J . N . VAN DEN HOUTEN , DIRECTOR OF THE LEGAL SERVICE OF THE EUROPEAN INVESTMENT BANK , 2 PLACE DE METZ ,
AND
2 . THE COMMISSION , REPRESENTED BY ITS LEGAL ADVISER , PETER GILSDORF , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ITS LEGAL ADVISER , MARIO CERVINO , JEAN MONNET BUILDING , KIRCHBERG ,
DEFENDANTS ,
Subject of the case
APPLICATION PURSUANT TO THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY FOR DAMAGES IN RESPECT OF THE LOSS ALLEGEDLY SUFFERED BY THE APPLICANTS AS A RESULT OF THE EFFECTS OF COUNCIL REGULATION ( EEC ) NO 563/76 OF 15 MARCH 1976 ON THE COMPULSORY PURCHASE OF SKIMMED-MILK POWDER HELD BY INTERVENTION AGENCIES FOR USE IN FEEDING-STUFFS ( OFFICIAL JOURNAL L 67 , P . 18 ),
Grounds
1THE APPLICANTS CLAIM THAT THE EUROPEAN ECONOMIC COMMUNITY , REPRESENTED BY THE COUNCIL AND THE COMMISSION , SHOULD BE ORDERED TO COMPENSATE THEM FOR THE DAMAGE ALLEGEDLY SUFFERED AS A RESULT OF THE EFFECTS OF COUNCIL REGULATION ( EEC ) NO 563/76 OF 15 MARCH 1976 ON THE COMPULSORY PURCHASE OF SKIMMED-MILK POWDER HELD BY INTERVENTION AGENCIES FOR USE IN FEEDING-STUFFS ( OFFICIAL JOURNAL 1976 , L 67 , P . 18 ).
2SINCE THE CASES HAVE BEEN JOINED FOR THE PURPOSES OF THE WRITTEN AND ORAL PROCEDURE , THEY SHOULD CONTINUE TO BE JOINED FOR THE PURPOSES OF THE JUDGMENT .
3IN THREE JUDGMENTS OF 5 JULY 1977 IN CASE 114/76 ( BELA-MUHLE ), CASE 116/76 ( GRANARIA ) AND JOINED CASES 119 AND 120/76 ( OLMUHLE HAMBURG AG AND FIRMA KURT A . BECHER ) (( 1977 ) ECR 1211 ET SEQ .) REFERRED TO THE COURT OF JUSTICE FOR PRELIMINARY RULINGS THE COURT DECLARED THAT REGULATION NO 563/76 WAS NULL AND VOID . IT REACHED THIS CONCLUSION ON THE GROUND THAT THE REGULATION PROVIDED FOR THE OBLIGATION TO PURCHASE AT SUCH A DISPROPORTIONATE PRICE THAT IT WAS EQUIVALENT TO A DISCRIMINATORY DISTRIBUTION OF THE BURDEN OF COSTS BETWEEN THE VARIOUS AGRICULTURAL SECTORS WITHOUT BEING JUSTIFIED AS A MEASURE IN ORDER TO OBTAIN THE OBJECTIVE IN VIEW , NAMELY THE DISPOSAL OF STOCKS OF SKIMMED-MILK POWDER .
4THE FINDING THAT A LEGISLATIVE MEASURE SUCH AS THE REGULATION IN QUESTION IS NULL AND VOID IS HOWEVER INSUFFICIENT BY ITSELF FOR THE COMMUNITY TO INCUR NON-CONTRACTUAL LIABILITY FOR DAMAGE CAUSED TO INDIVIDUALS UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY . THE COURT OF JUSTICE HAS CONSISTENTLY STATED THAT THE COMMUNITY DOES NOT INCUR LIABILITY ON ACCOUNT OF A LEGISLATIVE MEASURE WHICH INVOLVES CHOICES OF ECONOMIC POLICY UNLESS A SUFFICIENTLY SERIOUS BREACH OF A SUPERIOR RULE OF LAW FOR THE PROTECTION OF THE INDIVIDUAL HAS OCCURRED .
5IN THE PRESENT CASE THERE IS NO DOUBT THAT THE PROHIBITION ON DISCRIMINATION LAID DOWN IN THE SECOND SUBPARAGRAPH OF THE THIRD PARAGRAPH OF ARTICLE 40 OF THE TREATY AND INFRINGED BY REGULATION NO 563/76 IS IN FACT DESIGNED FOR THE PROTECTION OF THE INDIVIDUAL , AND THAT IT IS IMPOSSIBLE TO DISREGARD THE IMPORTANCE OF THIS PROHIBITION IN THE SYSTEM OF THE TREATY . TO DETERMINE WHAT CONDITIONS MUST BE PRESENT IN ADDITION TO SUCH BREACH FOR THE COMMUNITY TO INCUR LIABILITY IN ACCORDANCE WITH THE CRITERION LAID DOWN IN THE CASE-LAW OF THE COURT OF JUSTICE IT IS NECESSARY TO TAKE INTO CONSIDERATION THE PRINCIPLES IN THE LEGAL SYSTEMS OF THE MEMBER STATES GOVERNING THE LIABILITY OF PUBLIC AUTHORITIES FOR DAMAGE CAUSED TO INDIVIDUALS BY LEGISLATIVE MEASURES . ALTHOUGH THESE PRINCIPLES VARY CONSIDERABLY FROM ONE MEMBER STATE TO ANOTHER , IT IS HOWEVER POSSIBLE TO STATE THAT THE PUBLIC AUTHORITIES CAN ONLY EXCEPTIONALLY AND IN SPECIAL CIRCUMSTANCES INCUR LIABILITY FOR LEGISLATIVE MEASURES WHICH ARE THE RESULT OF CHOICES OF ECONOMIC POLICY . THIS RESTRICTIVE VIEW IS EXPLAINED BY THE CONSIDERATION THAT THE LEGISLATIVE AUTHORITY , EVEN WHERE THE VALIDITY OF ITS MEASURES IS SUBJECT TO JUDICIAL REVIEW , CANNOT ALWAYS BE HINDERED IN MAKING ITS DECISIONS BY THE PROSPECT OF APPLICATIONS FOR DAMAGES WHENEVER IT HAS OCCASION TO ADOPT LEGISLATIVE MEASURES IN THE PUBLIC INTEREST WHICH MAY ADVERSELY AFFECT THE INTERESTS OF INDIVIDUALS .
6IT FOLLOWS FROM THESE CONSIDERATIONS THAT INDIVIDUALS MAY BE REQUIRED , IN THE SECTORS COMING WITHIN THE ECONOMIC POLICY OF THE COMMUNITY , TO ACCEPT WITHIN REASONABLE LIMITS CERTAIN HARMFUL EFFECTS ON THEIR ECONOMIC INTERESTS AS A RESULT OF A LEGISLATIVE MEASURE WITHOUT BEING ABLE TO OBTAIN COMPENSATION FROM PUBLIC FUNDS EVEN IF THAT MEASURE HAS BEEN DECLARED NULL AND VOID . IN A LEGISLATIVE FIELD SUCH AS THE ONE IN QUESTION , IN WHICH ONE OF THE CHIEF FEATURES IS THE EXERCISE OF A WIDE DISCRETION ESSENTIAL FOR THE IMPLEMENTATION OF THE COMMON AGRICULTURAL POLICY , THE COMMUNITY DOES NOT THEREFORE INCUR LIABILITY UNLESS THE INSTITUTION CONCERNED HAS MANIFESTLY AND GRAVELY DISREGARDED THE LIMITS ON THE EXERCISE OF ITS POWERS .
7THIS IS NOT SO IN THE CASE OF A MEASURE OF ECONOMIC POLICY SUCH AS THAT IN THE PRESENT CASE , IN VIEW OF ITS SPECIAL FEATURES . IN THIS CONNEXION IT IS NECESSARY TO OBSERVE FIRST THAT THIS MEASURE AFFECTED VERY WIDE CATEGORIES OF TRADERS , IN OTHER WORDS ALL BUYERS OF COMPOUND FEEDING-STUFFS CONTAINING PROTEIN , SO THAT ITS EFFECTS ON INDIVIDUAL UNDERTAKINGS WERE CONSIDERABLY LESSENED . MOREOVER , THE EFFECTS OF THE REGULATION ON THE PRICE OF FEEDING- STUFFS AS A FACTOR IN THE PRODUCTION COSTS OF THOSE BUYERS WERE ONLY LIMITED SINCE THAT PRICE ROSE BY LITTLE MORE THAN 2 % . THIS PRICE INCREASE WAS PARTICULARLY SMALL IN COMPARISON WITH THE PRICE INCREASES RESULTING , DURING THE PERIOD OF APPLICATION OF THE REGULATION , FROM THE VARIATIONS IN THE WORLD MARKET PRICES OF FEEDING-STUFFS CONTAINING PROTEIN , WHICH WERE THREE OR FOUR TIMES HIGHER THAN THE INCREASE RESULTING FROM THE OBLIGATION TO PURCHASE SKIMMED-MILK POWDER INTRODUCED BY THE REGULATION . THE EFFECTS OF THE REGULATION ON THE PROFIT-EARNING CAPACITY OF THE UNDERTAKINGS DID NOT ULTIMATELY EXCEED THE BOUNDS OF THE ECONOMIC RISKS INHERENT IN THE ACTIVITIES OF THE AGRICULTURAL SECTORS CONCERNED .
8IN THESE CIRCUMSTANCES THE FACT THAT THE REGULATION IS NULL AND VOID IS INSUFFICIENT FOR THE COMMUNITY TO INCUR LIABILITY UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE TREATY . THE APPLICATION MUST THEREFORE BE DISMISSED AS UNFOUNDED .
Decision on costs
COSTS
9UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY MUST BE ORDERED TO BEAR THE COSTS . SINCE THE APPLICANTS HAVE FAILED IN THEIR APPLICATIONS THEY MUST BE ORDERED TO PAY THE COSTS .
Operative part
ON THOSE GROUNDS
THE COURT
HEREBY :
1 . DISMISSES THE APPLICATIONS .
2 . ORDERS THE APPLICANTS TO PAY THE COSTS .
Full & Egal Universal Law Academy