Week 15 Lecture Slides PDF

27 May 2024 Dr. Michael DE BOECK THE IMPLEMENTATION & ENFORCEMENT OF EU LAW III Article 263 TFEU: the action for annulment Overview 1. Introduction: conditions and rationale in the EU judicial system 2....

27 May 2024 Dr. Michael DE BOECK THE IMPLEMENTATION & ENFORCEMENT OF EU LAW III Article 263 TFEU: the action for annulment Overview 1. Introduction: conditions and rationale in the EU judicial system 2. Admissibility grounds: 1. The act must be adopted by a body or institution subject to judicial review by the CJEU. 2. The challenged act must be a ‘legal act’, which ‘produces legal effects’. 3. The applicant must have ‘standing’ to challenge the act. 4. The action must be raised within the time limit. 3. Substantive grounds for annulment 1. Lack of competence 2. Infringement of procedural requirements 3. Infringement of the Treaties or any rule of law relating to their application 4. Misuse of powers 4. Consequences of an annulment action? 5. Afterthoughts for the workshops: 1. Links to the preliminary reference procedure and the action for damages? 2. A complete system of judicial remedies? ‘Les Verts’ in context… ? Rationale & conditions of art. 263 TFEU […] 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. C-294/83 Parti Écologiste « Les Verts » v. Parlement Européenne, EU:C:1986:166, para 23. Art. 2 TEU: “The Union is founded on the values of respect for […] the rule of law […]. These values are common to the Member States” Art. 19 TEU: 1. The Court of Justice of the European Union shall include the Court of Justice, the General Court and specialised courts. It shall ensure that in the interpretation and application of the Treaties the law is observed. Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law. Why having actions for annulment in the EU system?  Article 263 TFEU provides for actions to be brought before the CJEU to review the legality of acts of Union institutions and other Union bodies, the acts of which are intended to produce legal effects in relation to third parties  Article 264 TFEU: If the action is well founded, the CJEU shall declare the act concerned to be void The goal of actions for annulment is to ensure that Union institutions comply with all requirements of EU law when they take action.  Actions for annulment - introduction Judicial review of the legality of Union acts is a function of the CJEU! Under what conditions is direct action available against acts of the Union?  Who can bring an action for annulment?  Against which institutions?  Which acts can be reviewed?  When can an action be brought?  On what grounds?  With what consequences? Picture source: https://quizlet.com/169598616/review-of-eu-institutions-flash-cards/ Admissibility A complex issue –> several questions need to be examined: Acts of which institutions are subject to review? Which acts can be reviewed? Is there a time limit for challenging acts? Which applicants can bring an action for annulment? – the issue of locus standi Admissibility - acts of which institutions are reviewable? Initially, Article 173 EEC (now Article 263 TFEU) only referred to acts of: The Commission The Council Then, in Case C-294/83 Parti Écologiste ‘Les Verts’, the CJEU addressed the following question: Does the Court have jurisdiction to hear and determine an action for annulment brought under Article 173 EEC (now Article 263 TFEU) against a measure adopted by the European Parliament? Admissibility - acts of which institutions are reviewable? Case C-294/83 Parti Écologiste ‘Les Verts’: “The European Parliament is not expressely mentioned among the institutions whose measures may be contested because, in its original version, the EEC Treaty merely granted it powers of consultation and political control rather than the power to adopt measures to have legal effects vis-a-vis third parties.” (para. 24) Article 38 of the ECSC Treaty shows that where the Parliament was given the power to adopt binding measures […], measures adopted by it were not in principle immune from actions for annulment” (para. 24) Admissibility - acts of which institutions are reviewable? Case C-294/83 Parti Écologiste ‘Les Verts’: “An 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 […] and to its system.” (para. 25) Article 173 EEC (now Article 263 TFEU) is “a provision of general application” (para. 25) Admissibility - acts of which institutions are reviewable? Case C-294/83 Parti Ecologiste ‘Les Verts’, para. 25 continued: “Measures adopted by the European Parliament in the context of the EEC Treaty 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, without its being possible to refer them for review by the Court. It must therefore be concluded that an action for annulment may lie against measures adopted by the European Parliament intended to have legal effects vis-à-vis third parties.” Admissibility - acts of which institutions are reviewable? Case C-294/83 Parti Ecologiste ‘Les Verts’:  The CJEU ruled that an action for annulment may be brought against measures adopted by the European Parliament which intend to have legal effects vis-à-vis third parties Therefore, the CJEU ‘created’ a right to challenge measures adopted by the European Parliament Admissibility - acts of which institutions are reviewable? Currently, Article 263 TFEU reads as follows: “The CJEU shall review the legality of legislative acts, of acts of the Council, of the Commission and of the European Central Bank, other than recommendations and opinions, and of acts of the European Parliament and of the European Council intended to produce legal effects vis-à-vis third parties. It shall also review the legality of acts of bodies, offices or agencies of the Union intended to produce legal effects vis-à-vis third parties.” Admissibility – When is an act intended to produce legal effects vis-à-vis third parties? According to the CJEU: Whenever the act is intended to have binding legal effects that definitely and specifically determine obligations for third parties and bring about a distinct change in their legal position Admissibility - acts of which institutions are reviewable?  Acts of COREPER are NOT reviewable, because COREPER is NOT an EU decision-making body, and any agreement it reaches can be pushed aside by the Council  However, acts of the European Council are reviewable if those acts are intended to produce legal effects vis-à-vis third parties Admissibility – which acts are reviewable? What is meant by “reviewable acts”? Prior to the Lisbon Treaty, “reviewable acts” only included the following legally binding acts of the institutions: Regulations Directives Decisions However, the CJEU has interpreted the concept of “act” widely -> The CJEU’s case law has extended “reviewable acts” to other forms of acts. Admissibility – which acts are reviewable? What is meant by “reviewable acts”? How does the CJEU decide whether an act is reviewable or not? Case C-22/70 Commission v. Council (ERTA), para. 42: “An action for annulment must be available in the case of all measures adopted by the institutions, whatever their nature or form, which are intended to have legal effects.” Test applied by the CJEU: Is the act intended to produce legal effects vis-à-vis third parties, meaning, is the act intended to have binding legal effects that definitely and specifically determine obligations for third parties and bring about a distinct change in their legal position? Admissibility – which acts are non-reviewable? Example for acts held by the CJEU as non-reviewable under Art 263 TFEU Refusal by the European Commission to start an infringement procedure against a Member State In Case C-48/65 Alfons Lütticke GmbH and others v. Commission, the applicant asked the Commission to bring an action for infringement against Germany, but the Commission replied that it did not consider that there was an infringement. The applicant brought an action to the CJEU to annul the Commission’s decision NOT to start infringement proceedings against Germany. The CJEU ruled that the application was inadmissible because the Commission’s refusal to start an infringement action was NOT a legally binding act and thus, it was non-reviewable. Admissibility – which acts are non-reviewable? Example for acts held by the CJEU as non-reviewable under Art 263 TFEU A reasoned opinion delivered by the European Commission under Art. 258 TFEU In Case C-48/65 Alfons Lütticke GmbH and others v. Commission, the CJEU ruled that issuing a reasoned opinion by the Commission “constitutes an administrative stage intended to give the Member State concerned the opportunity of conforming with the Treaty. During this stage, the Commission makes known its view by way of an opinion only […]. No measure taken by the Commission during this stage has any binding force”. Therefore, the Commission’s reasoned opinion is non-reviewable. Admissibility – to sum up: which acts are reviewable?  It is not always clear whether an act/ a measure is a “reviewable act” or a “non-reviewable act” for the purposes of Article 263 TFEU.  A wide range of acts can be held reviewable by the CJEU depending on the legal effects they produce.  The CJEU decides whether an act produces or not legal effects of the kind that make the act concerned a “reviewable act” for the purposes of Article 263 TFEU. Admissibility – the time limit Article 263 TFEU: “The proceedings provided for in this Article shall be instituted within two months of the publication of the measure, or of its notification to the plaintiff, or, in the absence thereof, of the day on which it came to the knowledge of the latter, as the case may be.” Admissibility – the time limit The time limit has been very strictly applied by the CJEU! Example: In Case C-406/01 Federal Republic of Germany v. European Parliament and Council, the Court ruled as follows: “In the present case […], the full time-limit for the action to be brought expired on Thursday 11 October 2001 at midnight. Consequently, the present action, which was brought on 12 October 2001, is out of time.” (para. 18-19) “The action must therefore be dismissed as manifestly inadmissible. (para. 23)” Admissibility – the issue of locus standi Which applicants can bring an action for annulment? Locus standi: Recognition of a legal interest in a matter, i.e., the right to bring a legal action against an act Expressed in the TFEU; further defined & interpreted by the CJEU Restrictions on locus standi constitute the greatest impediment faced by some categories of applicants: “No standing” = NO right to challenge! Three categories of applicants for the purposes of Article 263 TFEU:  Privileged applicants  Semi-privileged applicants  Non-privileged applicants Admissibility - Locus standi for privileged applicants Art. 263 TFEU: [The Court] “shall have jurisdiction in actions brought by a Member State, the European Parliament, the Council or the Commission” Privileged applicants, for the purposes of Article 263 TFEU, are:  The Member States  The Council  The European Commission  The European Parliament In case of privileged applicants, the TFEU does NOT restrict the purpose of bringing an action for annulment. Privileged applicants – examples of types of action: Member States v. Union institutions:  See Case C-376/98 Federal Republic of Germany v. European Parliament and Council (Tobacco Advertising), in which the Court annulled a directive on the ground of an incorrect legal basis used by the Community legislature for its adoption  A Member State may bring an action for annulment against an act of a Union institution even if it did not oppose that act during the decision-making process in the Council Union institution v. Union institution – for example:  Commission v. Council  Commission v. European Parliament Admissibility - Locus standi for semi-privileged applicants Art. 263 TFEU: “The Court shall have jurisdiction […] in actions brought by the Court of Auditors, by the European Central Bank and by the Committee of the Regions for the purpose of protecting their prerogatives.” Semi-privileged applicants for the purposes of Article 263 TFEU are:  Court of Auditors  European Central Bank  Committee of the Regions  Semi-privileged applicants have a restricted right to challenge Union acts: They can only do so for the purpose of protecting their own prerogatives, meaning, where their own interests are clearly affected. Admissibility - Locus standi for non-privileged applicants Art. 263 TFEU: “Any natural or legal person may […] institute proceedings against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and does not entail implementing measures.” Non-privileged applicants for the purposes of Article 263 TFEU:  “Natural or legal persons” – as interpreted by the CJEU Non-privileged applicants face considerable restrictions on locus standi Natural or legal persons The concept “natural or legal persons” includes: Individuals For-profit and not-for-profit entities, i.e., companies, associations, etc. Non-member states, as ruled by the CJEU in Case C-298/89 Gibraltar v. Council and in Case C-872/19 P, Venezuala v. Council – such as the Russian Federation, Canada, the Republic of Serbia, the USA, etc. Admissibility - Locus standi for non-privileged applicants According to Article 263 TFEU, natural or legal persons may challenge Union acts which:  Are addressed to them or,  Are of ‘direct’ and of ‘individual concern’ to them, and  Regulatory acts which are of direct concern to them AND do not entail any implementing measures  Locus standi for non-privileged applicants – 4 possible scenarios under Article 263 TFEU The act is NOT of general application The act is of general application 1. The act is 2. The act is 3. The act is NOT 4. The act is a addressed to addressed to a regulatory act regulatory act which the applicant “another person” and/or requires does NOT entail any implementing implementing measures measures Locus standi for non-privileged applicants – 4 possible scenarios under Article 263 TFEU Scenario 1: The act is addressed to the applicant Scenario 2: The act is addressed to “another person”, NOT to the applicant Scenario 3: The act is of general application, other than a regulatory act Scenario 4: The act is a regulatory act that does NOT entail any implementing measures Scenario No 1: The act is addressed to the applicant An act is considered “addressed to the applicant” if and only if the applicant is directly addressed by that act! Example: An applicant (e.g., a legal person) is directly addressed by a formal decision taken by the European Commission when the latter enforces competition rules Scenario No 1 continued: The act is addressed to the applicant When an act is directly addressed to an applicant, the only restriction on locus standi faced by the applicant addressed is the time limit However, the applicant directly addressed can only challenge final decisions intended to have a binding effect; as stated by the General Court, it is not possible for applicants to challenge a potential decision which has not actually been taken (yet) at the time of the challenge! Back to the four possible scenarios… Scenario 1: The act is addressed to the applicant Scenario 2: The act is addressed to “another person”, i.e., another natural or legal person or a Member State Scenario 3: The act is of general application, other than a regulatory act Scenario 4: The act is of general application falling in the category of regulatory acts & it does NOT entail any implementing measures When is a Union act considered “NOT addressed to the applicant”? An act is considered “NOT addressed to the applicant” in the following cases: 1. An act addressed to another person; “Another person” has been interpreted by the CJEU to include not only other natural or legal persons but also the Member States - see Case 25/62 Plaumann v. Commission where the Court ruled that the concept “another person” included the German government, Or 2. An act is of general application – i.e., it lays down general principles and produces legal effects for everyone or broad categories of persons determined in an abstract manner. E.g: An EU directive on patient rights which determines rights for patients in cross-border situations Acts NOT addressed to the applicant Non-privileged applicants face considerable restrictions when they try to challenge acts NOT addressed to them under Article 263 TFEU! However, under certain conditions, non-privileged applicants can challenge such acts. Acts NOT addressed to the applicant Under what conditions can non-privileged applicants challenge Union acts NOT addressed to them? According to Article 263 TFEU, natural or legal persons may challenge Union acts NOT addressed to them which:  Are of direct and individual concern to them, or  Are regulatory acts which are of direct concern to them AND do not entail implementing measures The concepts of “direct concern” and “individual concern” Please read the CJEU ruling in Case 294/83, Parti Ecologiste “Les Verts” v European Parliament ECR 1339, paragraphs 29 to 38! Direct concern When is an act considered to be of direct concern to a non-privileged applicant? “Direct concern” is not defined in the TFEU. According to the CJEU, two conditions must be met: 1. The applicant must show a direct link or an unbroken chain of causation between the act and its consequences for the applicant - e.g., show the existence of a loss or damage AND 2. The measure should leave NO discretion to the Member State in implementation. Otherwise, that act CANNOT, by its nature, give rise to direct concern because then the applicant is affected not by the act itself but by its implementation. Direct concern Example: Case 294/83 Parti Ecologiste “Les Verts”, paragraph 31: [The contested measures] “constitute a complete set of rules which are sufficient in themselves and which require no implementing provisions, since the calculation of the share of the appropriations to be granted to each of the political groupings concerned is automatic and leaves no room for any discretion.” Individual concern When is an act considered to be of individual concern to a non- privileged applicant? Individual concern is very difficult to demonstrate if an act is NOT directly addressed to the applicant! As ruled by the CJEU in Case 25/62 Plaumann & Co. v Commission , to demonstrate individual concern, the applicant must show the existence of factors that distinguish him/ her uniquely! Please read Case C-25/62 Plaumann & Co. v Commission , to be discussed at detail during Workshop! Individual concern: the Plaumann test Case C-25/62 Plaumann & Co. v Commission “Persons other than those to whom a decision is addressed may only claim to be individually concerned if that decision affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually just as in the case of the person addressed.” Individual concern: the Plaumann test Case C-25/62 Plaumann & Co. v Commission “In the present case, the applicant is affected by the disputed decision as an importer of clementines, that is to say, by reason of a commercial activity which may at any time be practiced by any person and is not therefore such as to distinguish the applicant in relation to the contested decision as in the case of the addressee. For these reasons the present action for annulment must be declared inadmissible.” 58 years after the delivery of the judgment, the Plaumann test is still valid & applied by the CJEU! Back to the four possible scenarios… Scenario 1: The act is addressed to the applicant Scenario 2: The act is addressed to another person, i.e., a natural or legal person or a Member State Scenario 3: The act is of general application, other than a regulatory act Scenario 4: The act is a regulatory act AND it does NOT entail any implementing measures Regulatory acts According to Article 263 TFEU, natural or legal persons may challenge Union acts which:  Are regulatory acts which are of direct concern to them and do not entail any implementing measures “Regulatory acts” is a term introduced by the Lisbon Treaty without any definition/ explanation -> this term has been interpreted by the CJEU Regulatory acts According to the CJEU, regulatory acts are the non-legislative acts described in Article 290 (1) TFEU, i.e., the delegated and implementing administrative acts issued by the European Commission: “A legislative act may delegate to the Commission the power to adopt non-legislative acts of general application to supplement or amend certain non-essential elements of the legislative act.” Regulatory acts: the requirement NOT to entail any implementing measures According to Article 263 TFEU, non-privileged applicants can only challenge a regulatory act if it is of direct concern AND it does NOT entail any implementing measures What is meant by “implementing measures”? Not defined in the Treaty; interpreted by the CJEU as any intervention by either the Commission or by Member States in the application of a general non-legislative act (Case T-262/10 Microban) If there is an intervention -> the regulatory act entails an implementing measure -> non-privileged applicants have NO right to challenge it in front of the CJEU, under Article 263 TFEU! Regulatory acts – the requirement of direct concern According to Article 263 TFEU, non-privileged applicants can only challenge a regulatory act if that regulatory act is of direct concern to them Does this mean that, in case of regulatory acts, applicants only have to demonstrate direct concern and they are NOT required to demonstrate individual concern? Yes: the CJEU stated that in case of challenging regulatory acts, non- privileged applicants only need to demonstrate direct concern! To sum up: locus standi for non-privileged applicants – 4 possible scenarios 1: If the act is addressed to the applicant -> the applicant is NOT required to demonstrate direct concern, nor individual concern 2: If the act is addressed to “another person”, i.e., another legal or natural person or a Member State -> the applicant must demonstrate both direct and individual concern 3: If the act is of general application, other than a regulatory act -> the applicant must demonstrate both direct and individual concern 4: If the act is a regulatory act AND it does NOT entail implementing measures -> the applicant must only demonstrate direct concern The time limit of 2 months applies to all 4 scenarios! Grounds for annulment – 1. Lack of competence or authority Acting without competence = acting “beyond the power to act” or acting without a lawful basis Art. 5(2) TEU: “Under the principle of conferral, the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein.” Art. 13(2) TEU: “Each institution shall act within the limits of the powers conferred on it in the Treaties.” Grounds for annulment – 2. Misuse of powers Is rarely successful, because the required standard of proof is difficult to meet Use of power for the wrong purpose, i.e., to carry out unauthorized action – which practically amounts to acting without a lawful basis or acting “beyond the power to act” Grounds for annulment – 3. Infringement of an essential procedural requirement Art. 296 TFEU: “Legal acts shall state the reasons on which they are based and shall refer to any proposals, initiatives, recommendations, requests or opinions required by the Treaties.” This ground includes:  Breach of general procedural requirements  Breach of specific procedural requirements set forth in specific Treaty provisions – for example, the obligation of an institution (e.g., the Council) to consult another institution (e.g., the European Parliament, under the consultation procedure) before adopting an act  Insufficient or vague or inconsistent reasoning of a legal act Grounds for annulment – 4. Infringement of the Treaties or any other rule of law relating to their application Most frequently argued ground - because it is able to include all sorts of errors of EU law such as: Breaches of the Treaties or the Charter of Fundamental Rights of the EU Breaches of general principles including non-discrimination, human rights, proportionality, non-retroactivity, etc. Effects of a well-founded action for annulment Art. 264 TFEU:  “If the action is well founded, the CJEU shall declare the act concerned to be void.”  “However, the CJEU shall, if it considers this necessary, state which of the effects of the act which it has declared void shall be considered as definitive.” Art. 266 TFEU:  “The institution whose act has been declared void […] shall be required to take the necessary measures to comply with the judgment of the CJEU.” Effects of a well-founded action for annulment If an action for annulment is well founded, the CJEU: Shall declare the act concerned to be void Can specify: - which parts of the act concerned will be annulled; - which parts of the act concerned may remain in force Effects of a well-founded action for annulment An action for annulment under Article 263 TFEU does NOT result in: Imposing a fine on the Union institution which adopted the act concerned. The CJEU CANNOT impose a fine on the Union institution under Article 263 TFEU! Awarding financial compensation for applicants who were damaged by the annulled act. The CJEU CANNOT order a Union institution to pay a sum of money to the applicant under Article 263 TFEU! Damages can be pursued under Article 340 TFEU as a separate and autonomous action, brought as a parallel or a follow-up to an action for annulment.  - Article 268 TFEU The Court of Justice of the European Union shall have jurisdiction in disputes relating to compensation for damage provided for in the second and third paragraphs of Article 340 [TFEU]. Action for - Article 256 TFEU The General Court shall have jurisdiction to hear and determine at first instance actions or proceedings referred to in Articles 263, Damages against 265, 268, 270 and 272, with the exception of those assigned to a specialised court set up under Article 257 and those reserved in the Statute for the Court of Justice. The Statute may provide for the EU the General Court to have jurisdiction for other classes of action or proceeding. - Article 340(2) TFEU In the case of non-contractual liability, the Union shall, in accordance with the general principles common to the laws of the Member States, make good any damage caused by its institutions or by its servants in the performance of their duties. Action for Damages (article 268 TFEU and 430 TFEU)  […] the conditions under which the State may incur liability for damage caused to individuals by a breach of Community law cannot, in the absence of particular justification, differ from those governing the liability of the Community in like circumstances. The protection of the rights which individuals derive from Community law cannot vary depending on whether a national authority or a Community authority is responsible for the damage. C-46/93 and C-48/93, Brasserie du Pëcheur and Factortame, para 42:  Conclusion: The substance of the principles that govern the liability of EU institutions for breach of EU law is largely similar to the principles that govern the liability of Member States for a breach of EU law, and ties in to the requirements of the action for damages against EU institutions, bodies and agencies. Action for Damages (article 268 TFEU and 430 TFEU) Conditions:  The existence of an unlawful act or conduct on the part of the institution; (“a sufficiently serious breach of EU law”)  Margin of discretion to act is a key criterion.  EU institution had discretion: standard of “manifest and grave disregard of the limits of its discretion”  EU institutions has no discretion: standard of mere (sufficiently serious)“breach of EU law”.  Actual damage suffered by the applicant; and  A causal link between the illegality of the act and the damage suffered by the applicant.  Time bar: 5 years from the event (act) that caused damages.  No individual standing requirements! Please read about  The action for failure to act (pp. 312-313 of the textbook) AND  The action for damages (pp. 314-316 of the textbook) THANK YOU FOR YOUR ATTENTION!