The seal product cases (III): CJEU confirms GC and AG analysis of the concept ‘regulatory act’ in article 263 TFEU
The Grand Chamber today dismissed the appeal by the seal hunters to annul the basic regulation prohibiting the marketing of seal products on the EU internal market. As expected, the CJEU held that the seal hunters lacked standing to challenge a legislative act. This does not mean that the seal hunters will not prevail in the end (although I doubt it), as they have also challenged the Commission implementing Regulation, which will enable them to challenge the basic Regulation too (the decision of the GC in that case can be found here and my comments are here). What makes the judgment worth mentioning here though, is the more general relevance of the Grand Chamber’s interpretation of the concept of a ‘regulatory act’. This concept was introduced with the Lisbon Treaty and was intended to make it easier to challenge EU legal acts which were not of a legislative nature.
In today’s ruling the CJEU confirms the interpretation given to regulatory acts by the GC and AG Kokott earlier. To make things a bit easier to understand I have put the new part of article 263 TFEU in bold below and underlined the parts that make clear that regulatory acts are easier to challenge than ‘acts’ which are not addressed to them:
Any natural or legal person may, under the conditions laid down in the first and second paragraphs, 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.
The CJEU begins its analysis by noting that it will interpret article 263 TFEU by taking into account ‘not only […] its wording and the objectives it pursues, but also its context and the provisions of European Union law as a whole’ as well as the ‘origins of a provision’ of EU law (para 50). The CJEU then emphasizes the difference between privileged applicants, semi-privileged applicants, and non-privileged applicants (paras 52-54). It continues by noting that certain parts of the wording of article 263 TFEU (‘acts’ in general) have remained unchanged by Lisbon and therefore are not to be interpreted any differently (para 56). The concept of ‘acts’ therefore ‘covers acts of general application, legislative or otherwise, and individual acts’. Natural or legal persons must therefore show direct and individual concern if they wish to have standing.
The Court then continues to interpret the Lisbon innovation of ‘regulatory act’. The obvious difference in terms of standing is that a natural or legal person no longer has to be individually concerned which, following the Plaumann formula, is an almost insurmountable hurdle for individuals to take. The CJEU first uses a contrario reasoning to stipulate that ‘regulatory acts’ cannot possibly imply that all ‘acts’ of general application are ‘regulatory acts’:
As regards the concept of ‘regulatory act’, it is apparent from the third limb of the fourth paragraph of Article 263 TFEU that its scope is more restricted than that of the concept of ‘acts’ used in the first and second limbs of the fourth paragraph of Article 263 TFEU, in respect of the characterisation of the other types of measures which natural and legal persons may seek to have annulled. The former concept cannot, as the General Court held correctly in paragraph 43 of the order under appeal, refer to all acts of general application but relates to a more restricted category of such acts. To adopt an interpretation to the contrary would amount to nullifying the distinction made between the term ‘acts’ and ‘regulatory acts’ by the second and third limbs of the fourth paragraph of Article 263 TFEU.
The Court then continues to point out the intention of the drafters of the Treaty which amended the text of article 263 TFEU and the origins of the modification:
59 Further, it must be observed that the fourth paragraph of Article 263 TFEU reproduced in identical terms the content of Article III-365(4) of the proposed treaty establishing a Constitution for Europe. It is clear from the travaux préparatoires relating to that provision that while the alteration of the fourth paragraph of Article 230 EC was intended to extend the conditions of admissibility of actions for annulment in respect of natural and legal persons, the conditions of admissibility laid down in the fourth paragraph of Article 230 EC relating to legislative acts were not however to be altered. Accordingly, the use of the term ‘regulatory act’ in the draft amendment of that provision made it possible to identify the category of acts which might thereafter be the subject of an action for annulment under conditions less stringent than previously, while maintaining ‘a restrictive approach in relation to actions by individuals against legislative acts (for which the “of direct and individual concern” condition remains applicable)’ (see, inter alia, Secretariat of the European Convention, Final report of the discussion circle on the Court of Justice of 25 March 2003, CONV 636/03, paragraph 22, and Cover note from the Praesidium to the Convention of 12 May 2003, CONV 734/03, p. 20).
This is undoubtedly correct from the point of view of democratic legitimacy; a certain level of deference by courts is thereby maintained in relation to challenges by individuals of acts adopted as the result of a legislative procedure in which two institutions with the highest democratic legitimacy (EP and Council) are involved. This is thus fully in accordance with the distinction made in the Lisbon Treaty between legislative acts and non-legislative acts (art. 289 TFEU). For a bit more background to this issue, you may want to see my earlier blog posts on the subject here and here. In relation to the substantive arguments in the seal product cases, there is more info here.
In the end the CJEU dismissed the appeal in its entirety. There are also some interesting comments by the CJEU in relation to the application of the Charter and in particular the right to an effective remedy and a fair trial (art. 47 Charter). The CJEU there basically points out that a challenge of the basic regulation is always possible through the implementation of the Regulation either by Member States or by EU institutions. It is a nice crash course in the law of EU remedies and the relationship between national and EU courts. This reasoning is set out in paragraphs 90 to 106 and is a highly recommendable read with the CJEU concluding that ‘the protection conferred by Article 47 of the Charter does not require that an individual should have an unconditional entitlement to bring an action for annulment of European Union legislative acts directly before the Courts of the European Union’ nor ‘that fundamental right [or] the second subparagraph of Article 19(1) TEU require that an individual should be entitled to bring actions against such acts, as their primary subject matter, before the national courts or tribunals’ (paras 105-106). This quite bold statement is no doubt open to criticism, but it seems that considering the CJEU’s case law, only Treaty amendments can change this. In any event, the seal traders will likely have standing in their challenge of the implementing Commission Regulation in which case they will get the opportunity to challenge this basic Regulation as well (see the CJEU’s explanation in para 93).