Inuit, Case C-583/11 P of 3 October 2013 and Microban, T-262/10 of 25 October 2011 – A short assessment of ‘locus standi’ for persons in annulment actions

Art. 263 (4) TFEU and “Individual Concern” at a glance

Before the entry into force of the Lisbon Treaty, annulment actions brought by persons (both individuals and legal persons) were regulated under Article 230 (4) EC which provided that any natural or legal person could take legal action against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former. With the Treaty of Lisbon, Art. 263 (4) TFEU replaced Art. 230 (4) EC: Any natural or legal person can now institute proceedings against an act addressed to that person or against an act which addresses another person but is of direct and individual concern to them, or  against a regulatory act which is of direct concern to them and which does not entail implementing measures. Thus, under new Art. 263 (4) TFEU, persons can challenge against validity of any “binding” act (directives, decisions and regulations), not only of decisions. Apart from that, the new article has introduced regulatory acts as examined below. However, what has not changed is locus standi: persons who wish to challenge validity of a binding act must first show locus standi. Therefore, persons are called “non-privileged” applicants in annulment actions.

The first case in which the ECJ defined individual concern is Case C-25/62 Plaumann. A German importer of clementine, Plaumann, contested a decision of the Commission which refused to authorize Germany to suspend customs duties applicable to clementine imported from third countries. The action for annulment brought by the importer was declared inadmissible as Plaumann did not fulfill individual concern criteria. According to the ECJ, Plaumann was only concerned by the decision of the Commission by reason of a commercial activity (import of clementine from third countries) and this commercial activity may, at any time, be practiced by any person. In other words, there was an open group: anyone could become importer of clementine at any time, and existing and future importers of clementine would also be affected by the Commission’s decision just like Plaumann. Therefore, there was no specific reason that distinguished Plaumann individually from the others. Thus, Plaumann was not individually concern to the decision in question and did not have locus standi. “Plaumann test” has been the applicable test for assessment of individual concern since then but the problem is that Plaumann test is particularly difficult to satisfy. Therefore, criticisms against the difficulty of satisfying individual concern has naturally appeared in the doctrine and even by some Advocate Generals since Plaumann judgment. However, neither the ECJ nor the General Court has “softened” Plaumann test even for the interpretation of Art. 263 (4) TFEU.

As stated above, Art. 263 (4) TFEU has introduced the category of regulatory acts. The crucial issue is that applicants need to satisfy only direct concern, if they want to challenge against a regulatory act that does not entail implementation. This new category  gave rise two important questions: What is “regulatory” act and what does “implementation” mean for the purpose of Art. 263 (4) TFEU? Finally, Case Inuit C-583/11 P answered the first question and Case Microban T-262/10 answered the second question.

Background to Case Inuit      

The case concerned the European Parliament and the Council regulation (EC) No 1007/2009 on trade on seal products. The regulation limited seal products which could be placed on the market to those which came from hunts by Inuit and other native communities (to contribute to their subsistence). These conditions would apply to import and export of the seal products. Furthermore, the placing on the market of seal products could not be allowed for commercial reasons (par. 4). The applicants consisted of acouple of companies, associations and private persons which were active in the placing of seal products in the European market and were adversely affected by the regulation as they could not place seal product in the EU market following the regulation concerned (par. 17). The applicants sought the annulment of the contested regulation stating that it was a regulatory act and therefore they only needed to show direct concern to be heard by the General Court. The General Court needed to examine whether there was a regulatory act or not which could fall within the scope of Article 263(4) TFEU.

Definition of regulatory act: All acts of general application except legislative acts 

In reaching their decision, the Court did a literal, historical, and teleological interpretation of Art. 263 (4) TFEU (par. 11). The Court stated that a regulatory act is an act of general application, coming from the word regulatory which is not the same as legislative. The Court concluded that regulatory acts for the scope of Art. 263 (4) TFEU cover all acts of general application except of all legislative acts (par. 46). In the appeal, the ECJ agreed with the General Court as regards as the interpretation of regulatory act. The statement “except legislative acts” arose another question: then what is not legislative act? Both the General Court and the ECJ stated that the legal acts (directives, decisions and regulations) adopted according to a legislative procedure constitute legislative acts. As the regulation in Inuit case was adopted according to ordinary legislative procedure defined in Article 294 TFEU, it was a legislative act and the applicants had to show direct and individual concern at the same time (par. 13).

Background to Case Microban

The applicant Microban produced materials for food packaging which contained Triclosan. The Commission withdrew triclosan from the positive list through a decision. Thereby, the Commission prohibited use of triclosan in plastic food contact materials. Microban wished to challenge the validity of the decision as it prohibited triclosan which were used in the products manufactured by Microban (par. 1-3) Since the Commission claimed that it implemented the decision based on a directive, the General Court “assessed” the contested decision within implementing powers of the Commission until it annulled the decision due to the reason that the Commission’s decision lacked legal basis. What is interesting in Microban case is the clarification of meaning of “direct concern” for the purpose of the new Art. 263 (4) TFEU and the meaning of “does not entail implementation” for regulatory acts. The Court, in par. 27, clarified direct concern for the scope of application of Art. 263 (4) TFEU: “firstly, the contested [Union] measure must directly affect the legal situation of the individual, and secondly, it must leave no discretion to its addressees, who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from [Union] rules without the application of other intermediate rules”. The second  part assures casual link between the “damage” suffered by the applicant and the Union act challenged.

Undoubtedly the decision affected Microban adversely. As regards as whether the implementation of the decision was automatic or not, member states had a certain margin of discretion as regards the date from which they could ban the marketing of products containing triclosan in their territories. However, after November 2011, the ban would be automatic. In other words, even though member states had discretion as to the date from which they wished to prohibit the marketing of triclosan, it was optional and the ban was automatic and mandatory as of November 2011. Therefore, the Court stated that the prohibition of triclosan did not also entail any implementing measures involving any intermediate rules as it was an automatic ban. (par. 29). Thus, the decision was directly concern to Microban.

With Microban judgment, the Court confirmed that the concept of direct concern for the purpose of Art. 263 (4) TFEU is to be interpreted in the same way as it was presented in Art. 230 (4) EC. Most importantly, the Court interpreted the concept of “requiring implementation” for the purpose of regulatory acts. According to the Court, the transitional period left to member states did not amount to ‘implementation’ as the ban was automatic (par. 31-39). Consequently, Microban had locus standi. It can be stated that the examination of “implementation” for direct concern and “implementation” for regulatory acts seem to be employing the same assessment as both aim to establish causal link between the damage suffered by an applicant and EU act challenged by that applicant.

Short note on the distinction between legislative act and regulatory act

Secondary legislation is adopted by the institutions based on a Treaty provision. This provision is called “legal basis”. According to Art. 288 TFEU, secondary legislation is categorized as binding acts (directives, regulations and decisions) and non-binding acts (in principle opinions and recommendations are not binding). Apart from that, there is also a distinction between legislative acts and non-legislative acts [Art. 289 (3) TFEU]. A legislative act is an act adopted according to a legislative procedure, either under ordinary legislative procedure or special legislative procedure [Artciles 289 (1) and (2) TFEU and 294 TFEU). As regards as non-legislative acts, a non-legislative act can be delegated act (Art. 290 TFEU) and implementing act (Art. 291 TFEU). Delegated acts are adopted by the Commission. Implementing acts are adopted by the Commission and, in exceptional cases, by the Council upon conferral of power on the Commission/the Council by a legislative act.

What is important for this case analysis is the fact that while direct concern is enough to have locus stand to challenge validity of a regulatory act which does not require implementation, direct concern and individual concern must exist to be able to challenge a legislative act. The problem is that Plaumann test is extremely hard to satisfy. This situation results in a real difficulty when a person wishes to challenge a legislative act. According to Dr. Limante (1), when deciding whether the act at issue is regulatory or legislative act, the Court will base its finding on the analysis of the legal basis of the act and the procedure chosen. This analyze was made in case Inuit. As the contested regulation was adopted according to ordinary legislative procedure, it was not a regulatory act.

The possibility to challenge a legislative act and a regulatory act is currently under debate. The logical interpretation of the difference between a legislative act and a regulatory act as regards as annulment actions could be that the European Parliament which represent the citizens’ interest and the Council which represents the member states’ interest are the main legislators of the Union, and adoption of EU legislation by the Commission which represents the Union interest is not “pleasant” in the light of institutional triangle. Regulatory acts are indeed non-legislative acts as they are not adopted through a legislative procedure, there is a risk of them being adopted or implemented in a wrongful way. There are, however, certain mechanisms to control “wrongful conduct” by the Commission. The Treaty states that when the Parliament and the Council give the Commission the power to adopt a non-legislative act, that act to be adopted by the Commission is scrutinized by the institutions. For example, Art. 290 TFEU states that a “legislative act shall explicitly lay down the conditions to which the delegation in subject”, and if the Commission exceeds the scope of the legislative act, the Parliament or the Council may decide to revoke the delegation. Despite this control mechanism, a regulatory act could be considered to be more “dangerous” or “irregular” acts and therefore there is a possibility to challenge those acts by showing only direct concern which is a rather easy criteria to satisfy. A legislative act is, on the other hand, much more “significant” and “stable” because it has been adopted through a legislative procedure by the Parliament and the Council under ordinary legislative procedure or at least by the Council with different involvement of the European Parliament under special legislative procedures. Perhaps, in the eyes of the drafters of the Treaty, legislative acts should not be challenged easily. However, in such a case, the difficulty of satisfying Plaumann test may be considered as going beyond the wish of the drafters of the Treaty because [legislative] acts can hardly be challenged under Plaumann test. In other words, Plaumann test as applied by the European Courts makes the [legislative] acts as “rarely challengeable” which goes beyond “not-easily challengeable”.

Suggestion: a more flexible test for indiviaul concern

An interesting aspect of the issue was mentioned by the AG Jacobs in the Case C-50/00, P Unión Pequenos Agricultores, 21 March 2002. In his opinion, he expressively points out that there is a need of a change within the meaning of individual concern:

“The assumption is correct that the preliminary ruling procedure provides full and effective judicial protection against general Union measures. The case-law on the standing of individuals to bring proceedings before the Court of Justice has, over the years, given rise to a large volume of discussion, much of it very critical. It cannot be denied that the limited admissibility of actions by individuals is widely regarded as one of the least satisfactory aspects of the [Union] legal system. It is not merely the restriction on access which is criticized; it is also the complexity and apparent inconsistency which have resulted from attempts by the Court to allow access where the traditional approach would lead to a manifest ‘denial of justice’. In my opinion, it should therefore be accepted that a person is to be regarded as individually concerned by a Union measure where, be reason of his particular circumstances, the measure has, or is liable to have, a substantial adverse effect on his interests.” (par. 60 and 100).

The AG claims that the only satisfactory solution is to recognize that an applicant is granted his true right of direct access to a court who can grant remedy. This would result in cases where possible denial of justice is avoided and the judicial protection is improved in a number of ways. By replacing the standing rules on individual concern/Plaumann test by a much simpler test, there would be a shift in the emphasis in cases before the Court from purely formal questions of admissibility to questions of substance. Such a replacement would also remove the present anomaly in the case-law which indicates the higher number of persons affected, the smaller is the possibility of effective judicial review.

By Miguel Ángel Núñez Riaño, Nicolas Anaïs, Oscar Björkholm, Sebastian Zivkovic and William Yüksel.

(1) Dr. Agne Limante, “Inuit and Microban: ECJ explains notion of ‘regulatory act’”.

 

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