CJEU’s Annual Report: Manufacturers, Climate Change & Chemical Substances

Sylvie Gallage-Alwis and Gaëtan de Robillard, respective Partner and Associate at Signature Litigation, break down the CJEU’s 2019 Annual Report and what it means for manufacturers and distributors in Europe.

The Court of Justice of the European Union (CJEU)’s case law is a crucial guide for all Member States’ Courts which are supposed to follow its guidance on how to interpret European regulations. Its role is hence summarised on the Court’s website as follows: “ensuring EU law is interpreted and applied the same in every EU country; ensuring countries and EU institutions abide by EU law“.

In 2019, the CJEU rendered landmark case law to enforce EU rules against a number of Member States, whereby their liability was triggered, and they were imposed record fines. The 2019 Annual Report is, in this respect, a must-read since it allows businesses operating within the European Union (EU) to identify the areas and trends that will be debated at national level and the new responsibilities they will need to adapt to quickly, in order to avoid being the target of State-level litigation. Indeed, the condemnation of a State at EU level is often the starting point of challenging proceedings against companies at State level (class actions, individual claims, both civil and criminal proceedings, etc.). This can be observed in all the areas addressed by the CJEU in 2019 such as consumer protection, data protection or climate change litigation.

In its introduction to the Annual Report, Mr Lenaerts, President of the CJEU, highlights the increasing role of the institution with the following summary: “2019 was an exceptional year in many respects. The number of cases decided by the Court of Justice and the General Court combined, 1,739 in all, was just shy of the record reached in 2018, while the Court of Justice exceeded its own individual record (865 in 2019, compared to 760 in 2018). The number of new cases brought, 1,905 in total, was in fact greater than ever. Among these, the record number of references for a preliminary ruling, 641, is a testament to the increasing confidence of national courts in the EU judicial system“.

The Court of Justice of the European Union (CJEU)’s case law is a crucial guide for all Member States’ Courts which are supposed to follow its guidance on how to interpret European regulations.

When it comes to the areas ruled upon by the CJEU, there are a significant number which may directly impact manufacturers and distributors. Apart from the issues linked to data privacy, state aid or intellectual property rights which are of interest to all businesses in the EU, we can name consumer protection rights and climate/environment issues. As for the former, the CJEU notably refers to cases such as the one against Amazon whereby the Court “obliged [it] to provide consumers with a means of communication allowing them to contact it quickly and to communicate with it efficiently“. Other cases notably relate to the scope of the right to withdrawal and the right to compensation of consumers when dissatisfied.

As for climate change litigation, it is mentioned from the outset of the report, and the President even states, that it is one of the topics that will have a “direct impact on cases brought before the Court of Justice and the General Court“. This can already be observed through the increasing number of claims filed by NGOs and individuals before domestic courts against both States and companies. Interestingly, statistically, environment-related cases are however not ranked amongst the most frequent cases brought before the Court of Justice (60 cases out of 1,102 pending cases) or the General Court (12 cases out of 1,398 pending cases). But one should not be blinded by this. Indeed, in parallel, numerous claims were brought by NGOs, local authorities and individuals before domestic courts throughout the EU (as well as outside the EU).

The CJEU’s sentencing of Member States, on the ground that the protection of the environment has become one of the most important goals at EU level, will undoubtedly impact State Courts faced with such litigation whereby plaintiffs seek compensation for damage to the environment such as air pollution, soil pollution or water pollution. The Annual Report mentions cases where states or regions were condemned because they failed to comply with the limit values set out by the Paris Agreement and did not take adequate measures to ensure that the exceedance period was as short as possible (judgment of 24 October 2019, Commission v France, C-636/18; judgment of 26 June 2019, Craeynest and Others, C-723/17).

Going down this path, the French Administrative Supreme Court imposed on the French State a record interim fine of €10,000,000 for failure to implement measures to reduce Nitrogen and Particulate Matter emissions below the limit values.

Another vigilance point for manufacturers and distributors operating in the EU is the CJEU’s way to deal with certain chemical substances such as Bisphenol A or Glyphosate. As a matter of fact, the CJEU has had the opportunity to address, in a general way, the risks associated with potentially hazardous substances.

In the PlasticsEurope v ECHA cases, the CJEU confirmed the inclusion of Bisphenol A in the list of substances of very high concern in REACH. This inclusion triggered obligations for suppliers of products containing Bisphenol A in terms of information to stakeholders in the supply chain and to consumers (judgments of 11 July 2019 and 20 September 2019, PlasticsEurope v ECHA, T-185/17 and T-636/17).

The Annual Report also refers to the Tweedale case in which the CJEU sets aside the decision of the Food Safety Authority refusing access to glyphosate’s toxicity and carcinogenicity studies. According to the Court, “the public must have access to information enabling it to ascertain whether the emissions were correctly assessed and must be given the opportunity reasonably to understand how the environment could be affected by those emissions” (judgment of 7 March 2019, Tweedale v EFSA, T-716/14 and T-329/17).

If further evidence of the CJEU’s wish to have environment-related issues become a priority is needed, one will notice that, for the first time, the Annual Report contains a chapter on the CJEU’s own steps to protect it, trying to apply to itself the saying that “those who live in glass houses should not throw stones“.