The Year of the Infringement

Happy 2019! I wish all the readers of this blog a very successful and eventful new year.

And to start 2019, nothing better than a post on naughty States and the stellar role recently played by infringement actions before the Court. Who would have thought that the infringement procedure would be close to outmaneuver the preliminary reference procedure and overtake its position as the “jewel of the crown” among the remedies of the Court? But that is what we have started to witness in the past months, and will probably consolidate throughout 2019. Thus, 2019 could very well be… the year of the infringement.

This is not a completely new story. 2017 and 2018 provided extraordinary examples of how the infringement procedure could be used, particularly in the Polish forest case and, more recently, in the case of the Polish forcefully retired judges. Those cases proved that the interaction between the interim measures procedure and the infringement procedure can be crucial in order to ensure the effectiveness of EU law. The Grand Chamber ruled twice on these matters, the first time to confirm that the sanctions mechanism of Article 260 TFEU can be used in the context of interim measures (quite a ruling!), and the second to remind that interim measure inaudita parteagainst Member States can be retroactive (quite another ruling!).

But 2019 will provide us with further developments in the field of infringements, and some of them are of a huge significance, both in procedural and substantive terms.

First, the Polish proceedings concerning the independence of the judiciary will prove how far the Court of Justice is willing to go in the interpretation of a very broad and generic provision, as is Article 19 TEU, which generically ensures the independence of the judiciary. Is this provision enough to justify the launch of an infringement procedure against the reform of a national judiciary? If the Court of Justice sides with the Commission, what would happen next? Should Member States consult with the Commission any further amendments to their judiciary? Wouldn’t the EU be stepping into a closely guarded domain of national sovereignty, its domestic judiciary? It looks like the Court will probably side with the Commission, but the seismic consequences of that conclusion could be felt for many years.

Shortly after, the Court will be ruling on Commission/Hungary (C-235/17), a case that has nothing to do with the rule of law crisis in that country, but with a point that could be applied to any infringement action against any Member State: can the Commission bring an infringement action on an independent ground of review based solely on the Charter of Fundamental Rights? The case raises key issues of principle, not only about the scope of application of the Charter, but also on the Commission’s policy on infringements, which could leave the institution in a position closer to the one of an Ombudsman in the promotion and defense of fundamental rights. So far, in a thoroughly reasoned Opinion, AG Øe claims that the Commission cannot bring an action on such grounds, but the counterarguments are powerful too. Some fundamental rights are self-executing, even in horizontal situation, as the Court has stated recently in some high-profiled cases (Egenberger, Bauer…). Also, the Court’s decisions in preliminary judgments confirm that the Charter can act as a sole ground of infringement in areas only indirectly covered by EU law (think about consumer protection and the vast number of breaches of the right to an effective protection in civil judicial proceedings ruled by the Court). It would be strange if the Commission is subject to a stricter standard of proof of the link between the Charter and the implementation of EU law, simply because the case is brought through an infringement action. We shall see, but the case will condition the role of the Charter as a significant or insignificant legal instrument in the Commission’s infringement policy.

We will also hear about the unknown (to date) Article 14.2 of the Statute of the European System of Central Banks, which grants the Governing Council of the ECB the right to bring an action against a Member State having unlawfully removed a governor of a national central bank. The typical provision that was drafted with the hope that it would never be applied, finally ended up being put to the test in the case of ECB/Latvia (C-238/18), together with Rimšēvičs/Latvia (C-202/18). But is Article 14.2 an infringement procedure or an action of annulment? Or none of the above? AG Kokott has rendered a powerful Opinion arguing that the remedy looks like an infringement, moves like an infringement and talks like an infringement. But the Court will have the final say, again in Grand Chamber, in a case that will open the door to a new generation of sui generisinfringements brought by Institutions other than the Commission.

And yesterday we found AG Szpunar’s excellent Opinion in the saga of Germany’s reluctance to follow the Council’s voting instructions in the Intergovernmental Organisation for International Carriage by Rail. In yesterday’s Commission/Germany (C-620/16), an interesting procedural argument was raised by the defendant: Germany departed from the Council’s voting instructions and breached the Council Decision with which Germany disagreed. Germany took the Council to Court and challenged the Decision. Germany lost. However, in the meantime, the Commission launched infringement proceedings against Germany almost immediately after the recalcitrant vote. But the letter of formal notice and the reasoned opinion were issued once the rebellious vote had been cast, so there was nothing much to do by then. Thus, Germany argued that the Commission lacked any interest to bring the action, to which the AG has counterargued by claiming that the Commission was right to bring the action, or otherwise Member States would profit from their breaches of EU law by issuing acts of immediate effect. The AG argues, with the support of the case-law, that some breaches produce effects only in short segments of time, but that does not preclude the Commission from bringing an infringement action after the effects have faded, as long as the Commission brings the action immediately after the act takes place. This is the key: the Commission’s ability to react quickly, which it did in this case. But if the Commission had decided to await the Court’s decision in the action of annulment against the Council Decision, which could have a been a reasonable stance too, the AG’s proposal would ensue in the inadmissibility of the infringement action. We shall see what the Court finally says, but the issue is conceptually and procedurally complex, and crucial for the Commission’s infringement policy.

The infringement procedure became a rather unexciting area of practice for quite some time, mostly because the Commission did not have reasons to use it in novel ways. But the current times have put the Commission in a new role, struggling as it is now with phenomenal challenges unimagined year ago. The infringement procedure is proving to be a powerful ally in the Commission’s efforts to overcome such challenges, and so far the Court has been willing to play ball. But for how long? In 2019 we will find out.

In the meantime, happy new year to y’all.

Brexit and EU Citizenship After Wightman

The Wightman case is a landmark decision of the Court of Justice that deserves careful attention. The speed at which developments are taking place in Brexitworld are probably clouding our eyes for the time being, but in the following months a more thorough analysis of the judgment will probably emerge and provide further insight into this extraordinary case.

For the time being, I want to raise a point of the judgment that so far has come unnoticed in the discussions (at least in the ones I have followed), which could show the way for the hundreds of thousands of Britons living in the continent and who are about to lose their EU citizenship.

In paragraph 64 of the Wightman judgment, the Court argues, shortly before ruling on the revocability of the withdrawal application, as follows:

“It must also be noted that, since citizenship of the Union is intended to be the fundamental status of nationals of the Member States (see, to that effect, judgments of 20 September 2001, Grzelczyk, C‑184/99, EU:C:2001:458, paragraph 31; of 19 October 2004, Zhu and Chen, C‑200/02, EU:C:2004:639, paragraph 25; and of 2 March 2010, Rottmann, C‑135/08, EU:C:2010:104, paragraph 43), any withdrawal of a Member State from the European Union is liable to have a considerable impact on the rights of all Union citizens, including, inter alia, their right to free movement, as regards both nationals of the Member State concerned and nationals of other Member States.”

As a result, the Court concludes that “given that a State cannot be forced to accede to the European Union against its will, neither can it be forced to withdraw from the European Union against its will.”

For the first time, the Court is openly admitting that Brexit has “a considerable impact on the rights of all Union citizens”, and such impact must be pondered on by the withdrawing Member State in case it decides to revoke its intention to withdraw. In other words, the impact of Brexit on EU citizens conditions the interpretation of Article 50 TEU and consequently it entitles the withdrawing Member State to halt the process. As a logical result, the impact of the withdrawal on EU citizens must also have an effect on the interpretation of all Treaty provisions, particularly those that deal with fundamental rights, EU citizenship and free movement of persons.

This passage of the Wightman judgments confirms what Piet Eeckhout and Eleni Frantziou have coined as the constitutional interpretation of Article 50 TEU. This provision is not only procedural, it also reflects underlying rights and duties that fall upon the Union and the Member States. Such rights and duties have their foundation on several pillars of integration enumerated in Wightman, and they include the EU’s values (Article 2 TEU), the protection of fundamental rights (the Charter) and EU citizenship (Article 20 TFEU)

The rights and duties of Article 50 TEU apply to all the parties involved in the withdrawal process: the withdrawing Member State, the remaining Member States and the Union. In the case of the withdrawing and remaining Member States, the Wightman ruling confirms that the protection of EU citizens is a key imperative throughout the withdrawal process. In the same way that the withdrawing Member State must take into account the interests and rights of citizens (and thus its power to revoke the withdrawal process if necessary) the same applies to the remaining Member States. National authorities must do everything in their power to protect EU citizens residing in their territory form the “considerable impact” of a withdrawal of a Member State from the Union.

In fact, some Member States have already been acting in accordance with this interpretation of Article 50 TEU and have enacted specific measures to ensure that EU citizens living in their territory and in the verge of losing their citizenship have the ability to continue being EU citizens. That was the case of Britons with a right to request nationality in a Member State that did not admit double nationality, or only allowed it in very restrictive cases. Germany and Luxembourg introduced measures to allow Britons to enjoy double nationality and thus to retain their EU citizenship after Brexit day. These measures applied to Britons with very close links to the host Member State and after having exercised free movement for several years on the grounds of EU law. Consequently, it is fair that the free moving EU citizen is granted reasonable assurances to remain an EU citizen if he or she wishes so.

However, other Member States are reluctant to open this door. The Netherlands is an extreme case. It refuses any recognition of double nationality and therefore long-standing British residents there are facing a stark choice. However, a country like Spain applies dubious double standards. It admits double nationality for nationals from Portugal, Andorra, The Philippines and Latin American countries, as well as Sephardic Jews with links to Spain and brigadistas of the Spanish civil war. Nevertheless, Britons having lived in Spain for years and complying with all the legal requirements to become Spanish nationals, after many years of having benefitted from free movement under EU law as EU citizens, must make the tragic choice between their British passport or their EU citizenship.

This approach is unfair, it is discriminatory and it undermines the constitutional rationale of Article 50 TEU, read together with Article 20 TFEU. If Member States have a duty under EU law not to provoke a legal or de facto deprivation of the status of EU citizenship of a national of a Member State, they should also be precluded from introducing discriminatory and disproportionate conditions to facilitate those nationals to continue being EU citizens.

Wightman paves the way for an active stance of Member States in the protection of EU citizens, particularly of those who reside in the territory and are about to lose their EU citizenship against their will. In some cases, these EU citizens will lose their status without even having the chance to express their democratic will. Most of the Britons with a right to claim nationality of a Member State had lost their right to vote in the 2016 referendum and their voice was unheard at the time. They lost such right because they had previously made use of the free movement rights that the Treaties granted to them. Therefore, it is fair for EU law to now give a helping hand, and preclude Member States from inflicting on these EU citizens an irreparable loss. A loss that is unwanted, not consulted and in breach of the values enshrined in Article 2 TEU.

And this is another unreflected outcome of the Wightman ruling. Brexit is not only about States and the Union. It is also about people. And mostly about EU citizens being stranded in the limbo of a shambolic catastrophe that the UK insists on inflicting on itself and its peoples.

Sharpening the Teeth of EU Social Fundamental Rights: A Comment on Bauer

Tuesday was a big day in Luxembourg. The Court of Justice rendered what is probably the most important set of judgments on fundamental rights in a long time. Since the days of Akerberg Fransson, Digital Rights, Melloni, etc…, the Grand Chamber had not delivered such a principled decision on the thorny issue of fundamental rights, and it has done so in a field that has traditionally been managed with caution and circumspection by the Court: employment and social fundamental rights.

In the cases of Bauer et al (C-569/16 and C-570/16, and a total of three judgments, but dealing with the same question of principle), the Court stated that Article 31(2) of the Charter, which includes the right of “every worker […] to an annual period of paid leave”, is directly effective and has the ability to empower national courts to set aside incompatible national provisions.

It might sound rather technical, but it is a tremendous development for the sources of EU law and for fundamental rights protection in the field of social policy.

The judgment must be put in its proper context. In 2005, in the case of Mangold, the Court introduced a notable exception to its long-standing case-law on direct effect of directives. In Mangold the Court argued that, despite its traditional case-law, directives that “concretize” a general principle of EU law have direct effect and therefore can be invoked between private parties. This approach caused an uproar in several Member States, but it was basically digested and confirmed in further case-law. The approach worked perfectly well in the case of discrimination, which had several Directives applicable in the field of employment that interacted with Treaty provisions and general principles of EU law. The Court was concerned that the enactment of Directives would in the long run undermine the effectiveness of those Treaty provisions and principles on discrimination. Thus, the Mangold case-law prevailed.

Four years later, the Charter of Fundamental Rights entered into force, and as of 1 December 2009 the full array of general principles enshrining fundamental rights became written primary law. And the obvious question was: if a Directive concretizes a provision of the Charter, does the Mangold rationale apply as well? Also, the issue of horizontal protection of fundamental rights ensued, mostly inspired by the Court’s reluctance to embrace horizontal direct effect of directives. As of 2009 an interesting debate began. A debate that resonated strongly in national legal orders, which have all struggled in one way or another with the issue of enforceability of fundamental rights between private parties. This time the debate took a different twist as a result of the peculiar idiosyncrasies of EU law and its sources of law.

In Association de Médiation Sociale (AMS) the Court sent a first and worrying message. When dealing with a provision of the Charter such as Article 27 (workers’ right to information and consultation in the workplace), the Court argued that it was not a directly applicable provision and therefore its concretization by Directive 2002/14 did not deploy a Mangold effect. The Court was eager to highlight that AMS was in stark contrast with Mangold precisely because of the general principles involved: in Mangold it was a directly invokable provision (no discrimination on the grounds of age), in AMS the provision of the Charter needed further legislation to be cognizable as an invokable rule of law. The Court seemed to agree with the Advocate General by hinting that Article 27 is a “principle” and not a “right” in the sense of Article 51.2 of the Charter. But that was not explicitly nor clearly stated in the judgment.

On Tuesday, the Court seems to have reversed its restrictive approach in AMS and it has embraced a full Mangold approach for certain social fundamental rights. The case concerned Article 31(2) of the Charter and the right to paid leave, in the context of a German law disproportionately restricting the worker’s ability to claim compensation for not enjoyed days of leave prior to the termination of the contract. The Court agreed with the referring court that German legislation was not in line with Directive 2003/88, but the main proceedings concerned litigation between a worker and his employer. Thus, in a horizontal situation, the standard and traditional case-law would rule that the Directive could not be invoked directly against the employer.

The Court reversed its traditional stance and bluntly argued that Article 31(2) of the Charter is an imperative rule that can be directly invoked, even between private parties. The interaction between the Charter right and Directive 2003/88 produces that result. Thus, in a single stroke the Court allowed the national court to set aside national legislation contrary to Article 31(2), and in proceedings between private parties. It is quite an achievement, considering the history and circumstances of social rights in EU law.

On the point of horizontal effect of Article 31(2), the Court refers to its recent decision in Egenberger, in which it confirmed the horizontal application of the right to freedom of religion. However, in Bauer there is an important development, because the Court explicitly argues that in the case of social rights there is a direct reference in the written provision of the Charter to “the worker” and “the employer”. Thus, when the written rule of the Charter individualizes the addressees, it appears that there is a strong presumption in favor of horizontal application. That seems to be a first in the case-law.

And on the point of direct effect and the setting aside of national law, the Court has finally extended the Mangold rationale to social rights different to discrimination, thus opening a new playing-field in the enforcement of social rights in Europe. It is true that in Egenberger the Court extended the Mangold approach to the fundamental right to an effective legal protection. However, that right is not used in horizontal situations, but in vertical contexts between a party and a court. In Bauer et al, the Court has undergone a genuine expansion of the Mangold approach in a purely horizontal right, the right to paid leave. If AMS appeared to have cornered Mangold and leave it in the specific and isolated territory of discrimination law, Bauer et alhas reversed that situation and it has now put AMS in the isolated corner instead. Now there is a strong presumption that other Charter social rights, if “concretized” by proper EU law, will have direct effect in horizontal relations, thus empowering national courts to set aside any provision of national law in breach of the Charter right.

These are good news for the protection of social rights in Europe. These are badly needed rights not only for vulnerable groups, but also for the EU itself. The social pillar of European integration cannot be limited to vaporous rhetoric by good-willed politicians. It must also be able to bite, and sometimes it needs to bite hard. In Bauer et al the Court has taken the first step in sharpening the teeth of EU social law. Now we must wait and see if it will have the courage, in a nearby future, to take a nice bite.

Interim Revolutions

The decision of 19 October of the Vice-President of the Court of Justice, ordering the Republic of Poland to suspend the effects of the Judiciary Reform Act and, in particular, to ensure that no sitting judge is removed as a result of the new retirement age, is revolutionary to say the least. The Court has entered a terra incognita, a place where no previous European court had ever entered into, forcing a sovereign Member State to choose between its membership to the club of European integration, or to walk away and follow the path of authoritarian illiberalism. To do this in an Order of interim measures, without hearing the defendant Member State, and two days before a crucial regional and local election in Poland, is quite a gamble on the part of the Luxembourg court.

However, the stakes are so high that the Court was left with hardly any other choices. Unfortunately the Polish government has triggered a process and a style of governance that has eventually cornered it into an untenable position, a no-prisoners approach in which EU Institutions have now no other choice but to stand firm and keep calm. In contrast with other illiberal governments within the Union, notably Hungary, the Polish crisis is acutely visceral and radical.

Looking at the Order from a strictly legal angle, the decision is quite an event and a ground-breaking precedent. Interim measures are exceptional means to ensure the effectiveness of a procedure, but they are mostly used to suspend the effects of EU acts. Challenges before the Court will usually involve private applicants questioning the legality of, for example, Commission decisions. The scenario in which a Member State acts as a defendant to which an interim measure can be imposed, is basically limited to infringement procedures brought by the Commission or by another Member State on the grounds of Article 258 TFEU. These kinds of interim measures are hardly ever requested, for the Commission is well aware of the reluctance of the Court to order Member States to act or refrain from acting in provisional terms. Such interim relief is granted on the grounds of Article 279 TFEU, a provision that gives the Court ample discretion to be creative about the kind of interim measure that the case deserves, but in practice they are scarcely requested and, as a result, hardly ever granted.

In Friday’s Order, the Vice-President has not granted ordinary interim relief on the grounds of Article 279 TFEU, but a particularly urgent kind of relief. The Order relies on Article 160(7) of the Rules of Procedure, which allows the Court to rule prior to hearing the defendant Member State. These interim measures are used when the urgency is such, that the order must be granted immediately and therefore with no time to hear the defendant party. Therefore, there will be another decision on the interim measures soon, once Poland has been heard in writing and, most probably, in the course of an oral hearing.

Furthermore, the Order is retroactive. The Judiciary Reform Act introduced a new retirement age for judges set at 65 years of age, and since its entry into force it has already served as a legal cover for the retirement of several sitting judges. Despite the fact that the Act had been suspended by the Supreme Court as a result of a preliminary reference sent to Luxembourg this summer, some of its provisions have already produced effects. Therefore, the Order imposes on Poland a retroactive suspension of effects that deploys the rulings’ effects from the moment of entry into force of the Act.

And finally, the Order steps into a terrain which has traditionally been handled with the utmost care by the Court, but which is now an arena in which the Court seems comfortable to rule in far-reaching ways. When a similar action was brought by the Commission against Hungary’s reform of the judiciary in 2012, the grounds of review were linked to Directive 2000/78 and discrimination on the grounds of age. A rather low-profile approach for a case that involved very special “workers”, as is the case of national judges. However, this time around the Commission has brought the case against Poland on the grounds of Article 19 TEU, which states that the EU’s judiciary is composed of both EU and national courts, acting in conformity with fundamental rights and in full independence. This independence is now being questioned by the Polish reforms. There is hardly any other provision of EU law at stake, but this has been deemed to be sufficient by the Commission to bring such a case, and the Court appears willing to play ball. There are good arguments about competence that could be used against the Commission, but it seems that one thing is to reform a national judiciary, and quite another to launch a full-blown attack on the independence of all the high courts of the land. The Commission appears to be committed to fight the latter, but Poland will certainly argue that the competence of the Union is shaky to say the least.

Nevertheless, last week’s Order has been slowly and carefully brewed in the Luxembourg futuristic anneau. In the landmark case of the Portuguese judges, rendered in early 2018, the Court set the tone for this new ground of review, and stated that Article 19 TEU, including its reference to independence, is a relevant parameter of review of national measures. Shortly before, in the case of the Polish forest of Białowieża, the Court ruled that in case of breach of an interim measure addressed to a Member State, penalty payments and pecuniary sanctions can be imposed by the Court at the request of the Commission, on a careful but daring interpretation by analogy with Article 260 TFEU. Before the 2018 summer holiday, in the LM case, the Court sent yet another powerful message by stating that judicial cooperation with Poland in the field of criminal law could come to an end In Poland if the European Council finally triggers Article 7 TEU proceedings against the Member State. Last week’s Order seems to be another piece in this terribly complex jigsaw puzzle that the Polish challenge is proving to be.

But the stakes are high and the Polish government knows it. It is no coincidence that the Polish Prosecutor’s Office has recently brought an action before the Constitutional Court arguing that the suspension of effects enacted by the Supreme Court is unconstitutional. If the Constitutional Court sides with the Prosecutor (and the new composition of the Court inclines me to think that it will), the argument could be well extended to Friday’s Order. With that ruling from the Constitutional Court, the Polish argument will probably argue that proceedings in Luxembourg are ultra vires and not applicable in Poland.

At that stage, the showdown will be inevitable and the Commission will have no other choice but to request the enforcement of the Order through Article 260 TFEU. Penalty payments will be imposed and Poland will refuse to pay following the ultra vires rationale. The Financial Regulation will have to be interpreted creatively so that the amounts receivable are offset by forthcoming payments to Poland. After all, Poland is a net beneficiary of the EU budget and it will not be difficult to ensure that the penalty payments effectively end in the coffers of the EU budget and not in the pockets of the Polish government. At that point, the Polish government will have to explain to its citizens why the generous contributions coming from Europe start to decline. The blame game might work for a time, but at some point the Polish people will realize that their government is not only risking their benefits, but even their European membership.

Whatever the result might be, the Court seems committed to playing the role that it has been anticipating for several months now. Nothing appears to be stopping the Court from playing hardball in this new chapter of European integration, in which “integration through law” has now turned, to the surprise and concern of us all, into “integration through the rule of law”. A nice but worrying twist that puts Europe on the eve of a new chapter, in its always bumpy road towards peace and prosperity in the continent.

Judicial Infringements at the Court of Justice – A brief comment on the phenomenal Commission/France (C-416/17)

One of the fascinating features of EU law is that no matter how well established its classics may be, they are revisited over and over again. If you thought you had seen it all about preliminary references, think twice. Always think twice, because you can never be fully sure until the Court’s next judgment.

Last week, many of us saw something that could have happened years ago, but which has taken more than six decades to occur. For the very first time, the Court of Justice has ruled that a Member State failed to fulfil its obligations under Article 267 TFEU in an infringement action, as a result of the decision of a national Supreme Court to refuse to make a preliminary reference. It’s a first that could become a ground-breaking development for the future. It’s also a first that could alter the way in which Supreme Courts cooperate with the Court of Justice and their executives. The complex repercussions of this judgment are still early to envisage, but it is clear that the decision is a tremendous step forward in the development of a coherent system of remedies in Europe.

But first, the facts and the background of the case.

In the year 2011, in the judgment in the case of Accor (C-310/09), the Court ruled that France had breached the Treaties due to the difference in tax treatment of dividends according to the Member State of residence of subsidiaries. The Court also ruled on the conditions in which the evidence required by the tax authorities could be established. Shortly after, the Conseil d’État followed the Court’s decision, but it ruled on a point that had not been addressed in Accor: the tax treatment applicable for the case of sub-subsidiaries. Even though the Court rendered a decision after Accor on this point, the Conseil d’État considered that the precedent was distinguishable. As a result, and with no prior preliminary reference to the Court, the Conseil d’État ruled that the tax paid by a sub-subsidiary did not have to be taken into account in determining advance payments to the parent company. The Conseil d’État also established certain conditions on the evidence that must be provided by the company to the tax authorities, in terms not fully coincidental with the ones enunciated by the Court in Accor.

Following the judgments of the Conseil d’État, the Commission received several complaints from undertakings unable to request reimbursements of advance payments made by French companies which had received dividends of foreign origin. The Commission sent a letter of formal notice to the French authorities and eventually sent a reasoned opinion which, finally, ensued in an action of infringement on the grounds of Article 258 TFEU. Among the grounds of review, the Commission introduced a novelty. For the first time, a Member State was brought before the Court of Justice due to a failure of its supreme court to make a preliminary reference pursuant to the third paragraph of Article 267 TFEU.

In a groundbreaking judgment rendered on 4 October 2018, the Court sided with the Commission and declared that the Conseil d’État had erred in law when refusing reimbursements of the advance payments of sub-subsidiaries in another Member State. However, the Court rejected the Commission’s concerns on the grounds based on the evidentiary requirements imposed by the Conseil d’État. But having declared one of the three alleged breaches on the substance of the case, the Court went on to determine whether the Conseil d’État should have made a preliminary reference in the case at hand.

According to the Court, the Conseil d’État faced a legal framework in which the judgment in Accor made no specific reference to sub-subsidiaries. Therefore, despite the fact that the Court had later rendered a ruling on the matter, it had not done so on the specific point in question before the French court. In addition, the Conseil d’État decided to depart from the case-law of the Court following Accor, with the argument that the said case-law concerned UK law, which differed from French law. The Court rejected this approach and stated that, precisely because the Conseil d’État had confirmation that the Court’s case-law was developing in a different direction to the one that the Conseil had in mind, it was under a particularly imperative duty to make a preliminary reference. As a result, the French Republic (ie, the Conseil d’État) failed to fulfil its obligations under the third paragraph of Article 267 TFEU.

This might sound like a rather obscure and technical judgment, but it hides a revolutionary development for the EU’s judiciary.

First, the Court has sent a powerful message to national supreme courts, a message that complements its decision in Ferreira da Silva (C-160/14), a case in which, for the first time, it declared a breach of the Cilfit doctrine of acte claire. Now the Court takes a step forward and goes as far as declaring a breach by a Member State, in the context of an infringement action, when the Cilfit doctrine is breached by a supreme court. Therefore, Cilfit has fully sharpened its teeth and the Court is willing to bite with it.

Second, the Court has come full circle in a process that has taken almost fifteen year to develop. In Commission/Italy (C-129/00), the Court dealt for the first time with the tricky question of whether a national judiciary’s decisions can trigger a Member State’s breach of EU law in the context of an infringement procedure. The case was deliberated at the same time as Köbler, but the ruling tried to strike a balance: the Court stated that indeed, a case-law of the national judiciary could entail a breach of EU law subject to infringement proceedings, but not as a result of isolated judgments, but as the outcome of a consolidated case-law, or a principled single decision. In the case at hand, Italy was declared in breach of EU law, but not due to the judgments of the judiciary, but to the legislature’s ambiguous rules (which led the judiciary to a set of decisions in breach of EU law).

A few years later, in Commission/Spain (C-154/08) the Court declared a breach of EU law as a result of a single judgment of a national supreme court. That was the first time that the Court took such a step, but the breach only concerned the substance of the case. Although the Commission has raised the fact that the Spanish Supreme Court made no reference to the Court, the judgment argued that the Commission had not raised this ground of review until the action was filed. Thus, the new ground of review was declared inadmissible.

And now, at last, almost fifteen years later, we have the final piece of the puzzle. The Court is clear when it states that the French Republic is in breach of the Treaties for having failed to comply with the duty imposed on the third paragraph of Article 267 TFEU.

Third, the Court has sent the Commission a very clear signal: if national supreme courts misbehave, and they do so without making a reference, the last chance for the losing party will be an infringement action, a remedy that is in the sole hands of the Commission (as well as a Member State, but we all know the use of that). Unfortunately, it is not uncommon to find judgments of national supreme courts that openly depart from the Court’s case-law. It is very frustrating to see that the only alternative to that outcome is an action for damages against the Member State for breach of EU law, particularly when the action has to be brought against the judiciary itself. In such cases, the helping hand of the Commission can be a very valuable tool in overcoming arbitrary or simply erroneous judicial decisions of supreme courts (which every now and then, unfortunately, do happen).

This last point leads me to a final observation, which raises a more conceptual issue. If the Commission is entitled to bring an action before the Court as a result of a supreme court’s failure to interpret EU law correctly and to make a preliminary reference,  the infringement procedure thus becomes a pseudo-direct appeal against national court decisions before the Court of Justice. It is exactly the kind of remedy that the Treaties avoided for decades: direct actions against national judgments. A system of the kind would fully integrate national judiciaries with the EU court system, and the Member States, when drafting the Treaties, were well aware of the impact of such development and had the caution to not step so far.  But after Commission/France, with the help of the Commission and motivated litigants, we are on the road towards a system in which national judicial decisions can be subject to review, in a direct and transparent way, by the Court. The EU judicial system is certainly more federal as of 4 October 2018. And in genuine EU method, the decision was hardly noted, it did not make the news, it was rendered by a chamber of five judges and, nevertheless, its effects will be felt for years and years to come. That’s a classic methodology, the methodology of discrete disruption, that will never die at the Court.