Irreconcilable Differences? Divorce and departure of EU citizens under the Citizens’ Directive

 

Steve Peers

What happens when a marriage between an EU citizen (who has moved to another Member State) and a non-EU citizen ends, after the EU citizen has already left that Member State? The EU Citizens’ Directive contains rules on both issues (divorce and departure), but those rules appear to conflict with each other nearly as much as divorcing couples do. An Advocate-General’s opinion today in the important case of Singh addresses these issues (there is a reference pending from the UK on these issues also). But unfortunately, this opinion is fundamentally flawed, and the Court of Justice should take an entirely different approach than the one which the Advocate-General recommends.

Background

EU free movement legislation, in the form of the Citizens’ Directive, gives EU citizens the right (subject to certain conditions) to move to another Member State, joined or accompanied by their spouse and other specified family members. But what happens if that marriage ends? According to the CJEU case law beginning with Diatta, a ‘spouse’ remains a spouse (and therefore still entitled to derived free movement rights, if that spouse is a non-EU citizen) even if the couple in question is separated, up until the date when the divorce becomes final. After the divorce, the Court ruled in case law starting with Baumbastthat since the Regulation on free movement of workers gives the children of EU workers (or former workers) a right of access to education, they were entitled to stay on the territory to exercise that right, and the non-EU parent who cared for that child had a right to stay too (regardless of any divorce from the EU citizen), otherwise the child’s right would be ineffective.

Other cases where a marriage between an EU citizen and a non-EU citizen end are regulated by the citizens’ Directive. Article 12(2) of that Directive provides for the non-EU family members to retain residence rights in some cases if the citizen dies. Article 12(3) provides for the non-EU family members to retain residence rights if there are children left behind who are still studying, where the EU citizen dies or leaves the host Member State. Article 13(2) then specifies the right to remain of non-EU family members, in the event of divorce or end of a registered partnership. There are four alternative possibilities for retaining the right of residence in this case. The first possibility allows the right to be retained if the marriage or partnership has lasted at least three years, including at least one in the host Member State, ‘prior to the initiation of the divorce or annulment proceedings or termination of the registered partnership’. (After five years’ legal residence, the non-EU family members obtain permanent residence status; the complications arise in the period beforehand).

The Singh case, referred from the Irish courts, concerns three divorcing couples. In each case, the EU citizen first of all departed Ireland, leaving the non-EU spouse behind, and theninitiated divorce proceedings.  So in a case involving both a departure and a divorce, what rules govern the situation?

The opinion

The Advocate-General states that Article 12(3) of the Directive sets out an exhaustivelist of cases where a non-EU family member can retain residence rights after an EU citizen leaves the host Member State (presumably leaving aside the Regulation on free movement of workers, which is only relevant when there are also children involved). Conversely, the Advocate-General believes that Article 13 ‘is intended, in principle, to apply only to cases where both spouses are still residing in the host State until the time of the divorce’. If the EU legislature had wanted to create an exception to the rules on departure for cases relating to divorce, it would have done so expressly.  So Article 13 can only apply where a divorce claim is made before the EU citizen leaves the host Member State. Articles 12 and 13 can only be applied together in the cases referred to in Article 12(3), ie where the EU citizen has departed and there are children in education. This analysis is supported for reasons of legal certainty: it cannot be clear when an EU citizen departs that a marriage will end in divorce or not.

Therefore, in the Advocate-General’s view, once an EU citizen departs from that State without first initiating divorce proceedings, the non-EU citizen left behind loses the right to reside under EU law. On the other hand, if the divorce proceedings are initiated before the EU citizen leaves that Member State, then Article 13(2) applies and the non-EU ex-spouses will retain a right to stay if they meet the other conditions set out there. She admits the inequity in distinguishing between these two cases. However, problems could be avoided if the non-EU citizen accompanied the EU citizen, or began divorce proceedings in the host Member State before the EU citizen left.

She also rejects any relevance of the right to family life and private life referred to in Article 7 of the EU Charter of Fundamental Rights, since there is no family life to protect any longer in the case of a divorce. However, the Charter would protect the position of a non-EU spouse in an ‘intact’ marriage with an EU citizen who had moved to another Member State.

Finally, the opinion confirms prior case law to the effect that an EU citizen can also rely on resources provided by his or her non-EU family member in order to qualify for free movement rights.

Comments

With great respect, this opinion is highly problematic. The starting point is an over-literal interpretation of the relationship between the rules on departure and divorce in the EU citizens’ Directive. This leads the Advocate-General to suggest an interpretation which fails to take account of the consequences of her argument, and leads to results which were surely not intended by the EU legislature.

Let’s start with the purportedly literal interpretation of the Directive. In fact, there is nothing in the wording of Article 12(3) (like the words ‘only’ or ‘except where’) that clearly indicate that it sets out an exhaustive list of cases where non-EU citizens get to stay despite the EU citizens’ departure. We can turn the Advocate-General’s argument on its head here: if the EU legislature had wanted to create an exception to the rules on divorce for cases relating to departure, it would have done so expressly. Anyway, two of the four grounds for obtaining legal residence in the event of divorce (access to children and custody of children) will usually cross over with the grounds to remain after departure referred to in Article 12(3). If Article 12(3) were the only ground for the right to stay after departure, the reference to these cases in Article 13(2) is therefore largely redundant.

As for the argument based on legal certainty, applying a rule based on ‘departure’ of an EU citizen simply does not create any such certainty either. The Advocate-General herself argues for an exception where a marriage is intact despite a cross-border separation, but how can we know if that is the case?  How long a period in another Member State is necessary to count as a ‘departure’? What if the EU citizen decides to come back to the host State? What about cases where the EU citizen steps outside for the proverbial pack of cigarettes – and then goes missing?

Furthermore, the substance of the Advocate-General’s own argument is legally unclear. She mostly refers generally to the departure on an EU citizen from a Member State taking precedence over the rules on divorce set out in Article 13(2). But at one point, she makes a distinction based on whether the divorce application was filed before or after the EU citizen left the host Member State. Which is it? It’s a crucial distinction, because for the other three categories of cases where non-EU citizens retain residence rights despite a divorce (custody of children, access to children, domestic violence), there’s no reference to when the divorce proceedings were initiated. Anyway, her acceptance that the timing of the application for divorce might be relevant for the interpretation of the rules on departure undercuts her basic argument that Article 12(3) constitutes the only basis for non-EU citizens retaining a right of residence following the EU citizen’s departure.

What about the Advocate-General’s suggested solutions? It would be highly awkward, to say the least, to expect the estranged non-EU spouse to accompany his or her family member to another Member State, even though (according to the CJEU’s case law) they would not have to live under the same roof in that country. In any event, the family member would not have a right (under EU law) to accompany an EU citizen who moved to a third country (besides those covered by EU free movement rules: the EEA states and Switzerland). And it would be outrageous to conclude that the estranged non-EU spouse should follow an EU citizen in domestic violence cases.

The Advocate-General doesn’t mention the possibility that the non-EU family member could obtain rights under the EU’s long-term residence Directive, by adding periods of prior legal stay in that Member State to the time spent as the family member of an EU citizen. But not all non-EU citizens have had such a period of prior legal stay; and that Directive anyway does not apply to the UK, Ireland and Denmark.

The prospect of the non-EU spouse bringing divorce proceedings first depends on the interpretation of the EU’s rules on civil jurisdiction, which give jurisdiction to the courts of the Member State where one or both spouses are ‘habitually resident’. But that term is not defined in the Regulation, and so it might be argued that the courts of the host State, at least in some cases, will not have jurisdiction. Anyway, it is not unreasonable to expect the non-EU citizen concerned to devote his or her efforts to saving the marriage – and it’s even possible that he or she is unaware of the problems in it (where an EU citizen is having an affair, for instance).  Also, for the reasons already set out, this possibility should logically only apply where the Directive refers to the initiation of divorce proceedings. But that would mean that bringing proceedings first could not benefit those with custody of children, access rights to children or domestic violence issues.

Finally, it should be noted that the Advocate-General’s interpretation of the EU Charter analysis is simply wrong: Article 7 (which corresponds to Article 8 of the ECHR) does not apply only as regards family life, but also private life. This includes all the relationships which a foreigner has built up in a State, even if he or she no longer has family members there: see the Slivenko judgment, for instance.

So what is the correct approach to this issue? Admittedly, the Directive is very unclear about the relationship between divorce and departure. But the rules on divorce would lose much of their effet utile if they ceased to apply simply because the EU citizen left the country – particularly given that the whole point of EU law in this field is to promote such free movement in the first place. The best way to reconcile the two sets of rules is to rule Article 13(2) can confer a right of residence where a divorce application has been lodged within a reasonable period after the EU citizen has left the country. That’s undeniably vague. But the Directive is full of vague rules, such as the need to assess whether there is a reasonable prospect of finding employment, or to apply a case-by-case assessment of those convicted or crimes or applying for social assistance. And, as pointed out above, the Advocate-General’s alternative of relying upon the amorphous concept of ‘departure’ isn’t any more precise anyway.

 

Picture credit: salon.com

Barnard & Peers: chapter 13

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Is the ECB’s OMT programme legal? The Advocate-General’s Opinion in Gauweiler

 

 

Alicia Hinarejos, Downing College, University of Cambridge; author of The Euro Area Crisis in Constitutional Perspective (forthcoming, OUP)

 

 

On the 14^thof January, AG Cruz Villalon delivered his Opinion in Gauweiler (C-62/14) on the legality of the Outright Monetary Transactions (OMT) scheme of the European Central Bank (ECB). In his view, the OMT programme is, in principle, in compliance with the Treaties, as long as certain conditions are observed if the programme is activated in the future. The case has important implications for the constitutional framework of EMU and the role of the ECB, but also for the relationship between the German Constitutional Court (the Bundesverfassungsgericht) and the Court of Justice of the EU. Indeed, this is the first time that the Bundesverfassungsgerichthas ever asked the Court of Justice for a preliminary ruling.

 

Background

 

The ECB is in charge of conducting monetary policy for the euro area and its role is very narrowly defined in the Treaties. This role, however, has evolved and expanded substantially in recent years, as the ECB has announced or adopted various ‘non-standard’ measures in response to the euro area sovereign debt crisis. The OMT programme is one of these measures: it was announced in September 2012 in a press release and, so far, it has never been used.

 

The idea is that the ECB will buy government bonds from euro countries in trouble, i.e., when nobody else buys these bonds, or their yield is becoming so high that the Member State will not be able to cover interest payments on newly issued bonds, thus having no more access to credit and risking default. Crucially, the Treaty prohibits the ECB from acquiring government bonds directly (Art 123 TFEU) as this would amount to monetary financing, or becoming a direct lender of last resort to a Member State. Instead, the ECB would buy government bonds in the secondary market—that is, from an institution that has bought these bonds first from a Member State—rather than from a Member State directly. While the ECB had already done this before, with the OMT programme there would be a formal element of conditionality as well, as the Member State in question would need to obtain financial assistance from the European Stability Mechanism or the EFSF and comply with its conditions (i.e. macroeconomic reforms negotiated between the Member State and the troika: the Commission, the ECB and the IMF).

 

The applicants before the German Court argued that the ECB had overstepped its Treaty role by creating a programme that should be viewed as a tool of economic, not fiscal, policy; it was also alleged that the programme violated the prohibition of monetary financing. In an exercise of ultra vires review, the German Constitutional Court’s preliminary response was to consider the OMT programme illegal under EU law. For the first time ever, the national court then referred the case to the CJEU. In the referring court’s view, the Court of Justice may either declare the OMT scheme contrary to the EU Treaties, or provide a more limited interpretation of the programme that is in accordance with the Treaties. The German Court provided certain indications as to what those limits should be.

 

The case is sensitive for various reasons: although not yet used, the mere announcement of the OMT scheme played an important role in getting the euro area out of the acute phase of the crisis, and offers a credible defence against similar future scenarios. A declaration of illegality, or the placing of substantive limits on the programme, may jeopardise post-crisis recovery. Additionally, the reference is the first ever submitted by the German Constitutional Court, and its tone is quite bold; there is clear potential for conflict between the two courts, with consequences unknown for EMU (on this aspect of the case, see this earlier blog post). Moreover, the case touches on the nature and legitimacy of the role of the ECB as an independent expert, and on the dichotomy between the original, rule-based conception of EMU and the evolving, more policy-oriented EMU that rose out of the crisis.

 

The AG Opinion

 

AG Cruz Villalon delivered a carefully argued Opinion that, first, acknowledged and unpacked the significance of the exchange for the dialogue between the German Constitutional Court and the Court of Justice, and, second, considered all concerns put forward by the national court. In doing so, the AG came to the conclusion that the ECB is free to create and implement a scheme like OMT, as long as it abides by certain limits in doing so. Crucially, these limits are far more permissive than those suggested by the German Court.

 

(1)    The relationship between the two courts

 

The German Constitutional Court has been very vocal on the question of limits to European integration, vowing to exercise its ‘emergency jurisdiction’ in different scenarios in the past: in order to protect human rights enshrined in the German Basic Law (Solange saga), to ensure that EU action is not ultra vires, i.e. does not go beyond what is allowed in the Treaties (Maastricht, Honeywell), and to protect Germany’s constitutional identity, which has so far included a particular conception of democratic legitimacy and the protection of national parliamentary powers (Lisbon and various post-crisis decisions).

 

In Gauweiler, the case at stake, the German Court exercised its ultra viresjurisdiction, coming to the interim conclusion that the ECB’s actions went beyond the powers given to it in the Treaties. Following its undertaking in Honeywell, the German Court referred the matter to the Court of Justice before reaching a final decision. Space precludes more careful consideration of this point, but it should be noted that ultra vires and constitutional identity intertwine in this case: first, because the German court used its conception of democratic legitimacy to ‘sharpen’ its ultra vires jurisdiction, in the sense that, for the first time, it was citizens’ right to vote that gave them standing to challenge EU action for going beyond EU primary law. And second, because the German Court went on to suggest that further review on the basis of constitutional identity would or may follow a Court of Justice’s decision that the OMT scheme is not in fact ultra vires: whether the OMT scheme could violate the constitutional identity of the Basic Law would depend on the Court of Justice’s specific interpretation of the scheme in conformity with EU primary law.

 

AG Cruz Villalon engaged with the case-law of the referring court on limits to European integration and acknowledged the background and significance of a reference that was worded in very bold (some would say almost aggressive) terms by the German court. Indeed, this discussion may be seen as the most diplomatic part of the Opinion.

 

The AG emphasized the ‘functional difficulty’ of the reference: in short, that the Court of Justice should not issue a preliminary ruling requested by a national court if that request ‘already includes, intrinsically or conceptually, the possibility that it will in fact depart from the answer received’ [36]. This, the AG continues, is not the intended or proper use of the preliminary ruling procedure. But was this such a situation? In this respect, it is problematic that the German Court may still conduct its own and independent ‘identity review’ after the Court of Justice has conducted its ultra vires review. Nevertheless, the AG relied on the principle of sincere cooperation to argue that trust is required in this situation: the Court of Justice should provide a constructive ruling, ‘on the basis of a particular assumption regarding the ultimate fate of its answer’ [66]. So there we have it: since both courts are under a duty to cooperate sincerely and to trust each other, the Court of Justice should give the requested ruling to the German court, trusting that the latter will, in turn, ‘do the right thing’. The AG was very clear as to what he considered that to be: ‘it seems to me an all but impossible task to preserve this Union, as we know it today, if it is to be made subject to an absolute reservation, ill-defined and virtually at the discretion of each of the Member States, which takes the form of a category described as ‘constitutional identity’. That is particularly the case if that ‘constitutional identity’ is stated to be different from the ‘national identity’ referred to in Article 4(2) TEU.’

 

 

(2)    The legality of the OMT scheme

 

The German court’s concerns regarding the legality of the OMT programme can be summarized as follows: first, the programme is a measure of economic, not monetary policy, and as such beyond the remit of the ECB. Second, a programme of this kind amounts to monetary financing of a Member State, which Art 123 TFEU prohibits. It would allow the ECB to become lender of last resort to a country in financial difficulties, and it would transform EMU into a transfer union—something not foreseen in the current Treaties.

 

Is it monetary policy?

 

The AG started by considering the nature of the OMT scheme as a measure of monetary or economic policy. The applicants had argued that the scheme should be classified as an economic policy measure with the aim of saving the euro by changing certain flaws in the design of monetary union, i.e. by pooling the debt of euro countries. They also emphasized the effects of the attached conditionality on Member States’ economic policies. All this, they argued, placed the OMT scheme beyond the merely supporting role that the ECB may have in economic policy, according to the Treaties. The German Constitutional Court agreed, based on various features of the OMT scheme: its conditionality and parallelism with ESM and EFSF financial assistance programmes (as well as its ability to circumvent them) and its selectivity (in that OMT bond-buying would only apply to select countries, whereas measures of monetary policy typically apply to the whole currency area).

 

The ECB, on the other hand, argued that the aim of the scheme ‘is not to facilitate the financing conditions of certain Member States, or to determine their economic policies, but rather to ‘unblock’ the ECB’s monetary policy transmission channels’ [104]. In other words, the crisis was making it impossible for the ECB to pursue monetary policy through the usual channels. The proposed bond-buying would ensure that credit conditions return to normality, and that the ECB is able to conduct its monetary policy again. Additionally, the ECB argued that the element of conditionality was necessary to ensure that the OMT scheme would not interfere with the programme of macroeconomic reform agreed between the ESM and the Member State in receipt of financial assistance.

 

The AG started by considering that it is within the ECB’s considerable discretion to adopt ‘non-conventional’ measures of monetary policy in exceptional circumstances. He accepted that it was the ECB’s intention to pursue monetary policy when announcing the OMT scheme and then proceeded to analyse whether the features of the OMT programme bore out this initial aim. After addressing each of the German court’s arguments, it came to the conclusion that the OMT scheme was indeed a measure of monetary policy—with one caveat: the AG saw a problem in the fact that the ECB made bond-buying through the OMT scheme conditional on the Member State’s compliance with a programme of macroeconomic reform adopted within the framework of the ESM or EFSF, and the fact that the ECB plays a very active role in the negotiating and monitoring of this programme with the Member State. This double role of the ECB (first within a framework for financial assistance which constitutes economic policy, according to Pringle, and then in its bond-buying role within the OMT) would tip the OMT scheme beyond the boundaries of the ECB’s powers: monetary policy with, at most, a supporting role in economic policy. The AG thus considered that, if the OMT were to be activated, the ECB would have to distance itself from the Troika and the monitoring of the conditionality for financial assistance immediately.

 

Is it proportionate?

 

Once the AG was generally satisfied as to the monetary nature of the OMT scheme, he reviewed its proportionality; the fact that this was a non-conventional use of competence made the proportionality assessment the more essential.

 

The OMT programme is an incomplete measure (as not all its features were specified in the ECB press release, and the programme has never been implemented). The AG considered that the programme’s basic features were known and could be put through an initial proportionality assessment, but that a full review of proportionality will only be possible once or if the OMT programme is ever fully regulated. The result of that initial proportionality assessment was positive: the basic configuration of the OMT programme passed the tests of suitability, necessity (the AG considered that the limitations suggested by the referring court would likely render the programme ineffective) and proportionality stricto sensu. The broad discretion granted to the ECB had a bearing on the application of the proportionality test. In sum, the programme was considered proportionate in principle, subject to the ECB complying with the requirements of proportionality (among them the duty to give reasons) if the programme is ever implemented.

 

Is it against the prohibition on monetary financing?

 

Once the nature of the OMT programme had been discussed, the Opinion turned to the possible circumvention of the prohibition on monetary financing of Member States, which is a further manifestation of one of the principles underlying EMU, namely fiscal discipline. While the Treaty makes it illegal for the ECB to buy government bonds directly from a Member State, the referring court argued that, although OMT bond-buying would take place in the secondary market, this amounted to a circumvention of the same rule. This circumvention would undermine fiscal discipline and would make certain Member States responsible, ultimately, for the debts of others, which is banned by Article 125 TFEU.

 

The AG considered that the prohibition of monetary financing (as a manifestation of fiscal discipline) was one of the features of the constitutional framework of EMU that contributes to the attainment of a higher objective, the financial stability of the monetary union (Pringle). Exceptions to this prohibition must thus be interpreted restrictively, and a formalistic approach must be avoided: the focus must be on the substance of the measure, and not on whether the bond-buying occurs directly or in the secondary market.

 

The referring court had identified various technical features of the OMT scheme as running counter to this prohibition: the ECB’s lack of preferential creditor status and waiver of rights, its exposure to excessive risk, the disruptive effects of holding the bonds until maturity, the fact that bond-buying in the secondary market would take place on a large scale and only a short time after their issue (making it too similar in its effects to buying bonds directly from the state) and that the ECB’s action would encourage new investors to buy newly issued bonds. In very broad terms, the German court’s view was that these features amounted to a circumvention of the prohibition of monetary financing because, even though the bond-buying would take place in the secondary market, it would disrupt the market and undermine fiscal discipline to an intolerable degree.

 

The AG disagreed on all counts but one; after discussing the effects of each technical feature, he considered that they were not disruptive enough of the normal functioning of the market and of fiscal discipline to fall foul of the Treaty. Again, with one caveat: if the ECB ever implements the programme, the timing needs to allow for actual formation of a market price in respect of government bonds before the ECB buys them. If the ECB does that, according to the AG, the technical features of the OMT programme do not endanger fiscal discipline to a disproportionate degree, and as such they do not have the potential to make Member States responsible for each other’s debts or turn EMU into a transfer union.

 

 

Final Remarks

 

The AG Opinion in Gauweiler is thoughtful and carefully argued. His discussion of the German court’s case-law and the problematic of the reference is measured, while still seeking to protect certain elements of the Court’s jurisdiction that he considers essential to the integrity of the EU legal system. It will be interesting to see how the Court of Justice handles the matter in its decision but, just as importantly, how the German Constitutional Court reacts to the latter.

 

The Opinion is less diplomatic when it comes to the legality of the OMT scheme: it rejects almost all concerns put forward by the referring court, and it does so from a particular conception of the independence of the ECB and the role of courts in controlling its activities. In this regard, the Opinion can be said to continue in the Pringle vein of ratifying the move from a rules-based EMU to a policy-based one in the wake of the crisis. Yet despite the wide margin of discretion enjoyed by the ECB, the Court has a crucial role to play in protecting the constitutional framework of EMU and of the Union. In his Opinion, the AG discharges this task by grounding an important part of the analysis on the technical features of the OMT and their effects: this is particularly clear when it comes to the question of whether the programme is compatible with the prohibition of monetary financing, where the discussion turns on technical matters rather than on more abstract ones such as the nature of EMU, its evolution, and the role of solidarity within its constitutional framework. While this may seem like a shame, it is also understandable: this broader debate is of paramount importance, but the Court (or any court) may not be the most suitable forum for it.

 

Barnard & Peers: chapter 19

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Whatever it takes: the Advocate-General’s opinion on the EU’s unitary patent

 

Steve Peers

Today’s two opinions (see here and here) on the legality of the EU rules on the unitary patent would, if followed by the Court of Justice, finally make way for the EU’s patent plans to bear fruit. However, this would be at the cost of compromising some established principles of the EU legal order.

Background

The European Union (and previously, the European Community) have struggled for decades to agree on patent rules. Treaties between Member States on patents were signed in 1976 and 1989, but never came into force. A proposed EU Regulation was agreed in principle in 2003, but the deal was regarded as unworkable because of its translation requirements.

The Treaty of Lisbon, in force 2009, then created a specific legal base for the adoption of EU intellectual property rules (Article 118 TFEU). It provides for the main rules to be adopted by the ordinary legislative procedure (qualified majority voting in Council, joint power for the European Parliament). However, the languages rules, which apply to translations of the patent (or patent claims), must still be agreed by unanimity.

Discussions on a proposed EU patent were revived starting in 2008, and the rules on the patent were agreed by the time that the Treaty of Lisbon entered into force, except for the languages issue. Due to a deadlock on that point, most Member States eventually agreed to trigger the process of ‘enhanced cooperation’, ie adopting EU legislation that applied to some Member States, but not others.

The enhanced cooperation process is different from the specific opt-outs that some Member States have as regards EU economic and monetary union and justice and home affairs law. The relevant Treaty rules set out a two-step procedure. First, enhanced cooperation must be authorised by the Council (by a qualified majority vote of allMember States): this requires also a request by a group of Member States, a proposal by the Commission, and the consent of the European Parliament (EP). Secondly, the legislation to implement enhanced cooperation must then be adopted using whichever EU procedure would usually apply, with the exception that only the Member States participating in enhanced cooperation get to vote.

This process was applied first of all in 2010, to authorisea group of Member States to adopt EU rules on choice of law in divorce. That case was not controversial. Since the authorisation of enhanced cooperation as regards patents in 2011, the process has been used once more to date, to authorisea group of Member States to adopt a financial transaction tax. The UK challenged the latter decision, but the CJEU rejected its challenge this spring, essentially on the grounds that the UK was only challenging the legality of the substance of the planned tax. But that issue cannot not be raised, as long as the participating Member States have not yet adopted the EU law implementing enhanced cooperation as regards the tax (see the earlier discussion on this blog). Those Member States still haven’t adopted such a law; when and if they do, a second challenge by the UK is likely.  

Similarly, the EU patent legislation has been challenged at both steps of the enhanced cooperation procedure. The initial authorisationof enhanced cooperation regarding patents was challenged by both Spain and Italy, each of which objected to the languages rules in the planned legislation, which provided for the key translations to be in English, French and German only. They lost this initial legal challenge in 2013, when the CJEU ruledthat the conditions for authorisation of enhanced cooperation were satisfied.

In the meantime, the participating Member States adopted two Regulations implementing enhanced cooperation in this area at the end of 2012: one of them concerns the substantive rules governing a ‘unitary patent’, while the other governs the language rules.  Spain (this time without Italy) challenged these measures in turn; those two challenges are the subject of today’s opinion.

The EU legislation on this issue is closely linked to two international treaties. First of all, the European Patent Convention,agreed in 1973, which binds all EU Member States and a number of non-Member States as well. That treaty sets up a legal framework for registering a patent in a number of European countries, by means of an application to the European Patent Office which it sets up. This results in a ‘European patent’, but the legal title concerned is not genuinely uniform, but depends on the national law of each of the countries where the patent is registered. The point of the EU legislation is to create a form of European patent that will have uniform existence in all of the participating Member States, also reducing the costs of translation that would otherwise apply.

The second treaty concerned is a treaty among Member States creating a Unified Patent Court, in order to reduce the costs of litigation concerning European patents and the planned unitary patent. (Although the CJEU had objected to aspects of these plans in its Opinion 1/09, Member States believe that they have addressed the Court’s concerns). That treaty will come into force once thirteen Member States, including France, Germany and the UK, have ratified it. So far five Member States have, including France (UK ratification is imminent). The application of the EU’s unitary patent law is dependent upon this treaty coming into force, and the unitary patents will only be valid in Member States which have ratified the treaty (all Member States except Spain, Poland and Croatia have signed it; all Member States except Spain, Italy and Croatia participate in the Regulations).

The opinion

Spain’s legal arguments against the two EU Regulations differ somewhat. As regards the main Regulation, Spain argues that it is invalid because it creates a unitary patent dependent upon the acts of the European Patent Office, whose acts are not subject to judicial review. Secondly, the Regulation does not create ‘uniform protection’ within the meaning of Article 118 TFEU. Thirdly, there is a ‘misuse of power’, ie enhanced cooperation has been used for a purpose other than the Treaties allow for. Next, the Regulation breaches the rules concerning the conferral of implementing power upon the Commission, because it gives power to the Member States to decide on issues such as renewal fees.

As regards the languages Regulation, Spain argues that the special status of the French, English and German languages is discriminatory. Also, it argues that there is no legal power for the EU to regulate language issues in the event of a dispute, as the Regulation does, and that the Regulation violates the principle of legal certainty.

In both cases, Spain argues that the rules on adopting implementing measures are invalid, since powers to implement EU law have been granted to a non-EU body, the European Patent Office. Also, it argues that making the application of the Regulations dependent upon the ratification of the treaty creating the unified patent court breaches the principle of the autonomy of EU law.

The opinion of Advocate-General Bot rejects all of these arguments. In his view, the main Regulation does create ‘uniform protection’, since it gives unitary status to a European patent that would otherwise be dependent upon different national laws. While the Regulation does refer back to national law, it does so as a form of (in effect) mutual recognition, ensuring that the national law governing each unitary patent governs the validity of that patent in other participating Member States. He does not believe that the argument regarding judicial review of the European Patent Office has merit.

Next, he argues that the EU legislature could confer power on issues such as renewal fees back to the Member States, rather than the Commission, since there was no need for uniform rules at EU level (which is when the Treaty requires implementing powers to be conferred upon the Commission) in this case.

As for the autonomy of EU law, he argues that the CJEU cannot review the validity of the treaty creating a unified patent court. It does not violate the autonomy of EU law to make the implementation of the Regulations dependent upon the entry into force of that Treaty, given the close link between the judicial system for patent protection and the patent system as a whole. Indeed, he suggests that the ‘principle of sincere cooperation’ set out in the Treaties requires Member States to ratify the treaty creating the separate court, in order to ensure that the unitary patent is effective. 

The translation rules are also acceptable. While it is discriminatory to confine translations to three languages only, it is not disproportionate in light of the need to ensure the cost-effectiveness of the patent. Finally, the Advocate-General argues that the principle of legal certainty is satisfied, since only one language version is authentic. 

Comments

In principle, this case is important because it raises questions about the substantivegrounds governing the implementation of enhanced cooperation. However, in practice only the argument relating to discrimination touches upon those substantive issues. And furthermore, in this case the discrimination argument doesn’t concern the nature of enhanced cooperation as such: the languages argument could equally be made against an EU legal measure which applies to allMember States, but which allows for the use of a limited number of languages only. Indeed, such an argument was made (unsuccessfully) against the translation regime of the EU trademark (the Kik judgment), which differs from the EU patent because it puts Spanish and Italian on an equal footing with the other three languages.  It looks as if we might have to wait for the legal challenge to the future financial transaction tax before the substantive rules on enhanced cooperation are interpreted by the CJEU.

But while the opinion doesn’t have much to say about enhanced cooperation as such, it has a lot to say about other forms of unorthodox law-making by the EU institutions. While the details and the substantive rules are of course different, it’s clear that on this front, there’s a lot in common between the EU’s unitary patent rules and the recent developments regarding economic and monetary union. Admittedly, in the former case, the EU is trying to kick-start a major harmonisation project for the umpteenth time, whereas in the latter case, it is trying to save the flagship of European integration from sinking. But in both cases, it is resorting extensively to treaties outside the legal order, such as the treaty approved by the CJEU in its Pringle judgment, as well as differentiated integration within it. Equally, it is creating new rules for the EU institutions (such as the powers for the European Central Bank being challenged in the pending Gauweilercase), including the deferral of power to Member States or international bodies (approved here by the Advocate-General, in spite of the Kadi precedent in which the CJEU frowned on decisions being made for the EU by a committee of the UN Security Council).

As with economic and monetary union, EU patent law will therefore (if the Court follows the opinion) be established and survive in a sui generis environment, in which many of the usual rules which govern the EU legal order do not apply.  Time will tell whether these two areas of law remain the exception in this respect, or begin to become the rule.

Barnard & Peers: chapter 5

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Is obesity a disability?

Katharina Ó Cathaoir, PhD Fellow, University of Copenhagen

Is obesity a disability? Advocate General Jääskinen addressed this loaded question yesterday 17 July 2014, in his anticipated opinion in Kaltoft v. Municipality of Billund. The case has garnered media attention with practitioners and journalists concerned by the implications for employers and health. The AG’s opinion is non-binding. The Court will issue its own judgment in the next few months, which will be binding on EU member states. However, in general, the Court tends to follow the AG’s opinion, although it is free to depart therefrom.

What is obesity?

An adult is classified as having obesity if he or she has a body-mass index (BMI) of over 30 (mass kg/ height m2). In most European states, the rate of obesity has doubled in the last twenty years. On average at least 17% of the adult European population is obese. As a result, the public, and state and interstate bodies increasingly look for solutions to the obesity “epidemic”.  Generally, obesity is linked to lack of physical activity and the consumption of too many calories. However, environmental factors, such as walkability, ability to afford and access healthful food, and opportunities to exercise may contribute. There is evidence of a link between low socio-economic status and obesity. Long term weight loss, although possible, is not maintained by everyone.

Facts of the case

Kaltoft worked as a child minder for 15 years with the Municipality of Billund. For the entirety of this time Kaltoft was obese, weighing no less than 160kg. During a period of one year he was provided with financial assistance by the Municipality to attend fitness and physical training sessions. He also unsuccessfully pursued bariatric surgery. Contrary to what has been reported, it has not been established that Kaltoft was dismissed due to his obesity. This will be a matter for the Danish court to decide following the preliminary ruling of the CJEU. Furthermore, Kaltoft, in a BBC interview, denied that he was unable to tie the children’s shoelaces as had been reported. Instead, both parties appear to maintain that Kaltoft was fully capable of fulfilling his position.

Mr Kaltoft was not formally given reasons for his dismissal although the Municipality contends it was due to a decline in the number of children making use of the service. Mr Kaltoft, however, alleges that his obesity was broached at his dismissal hearing and declared a reason for the decision. As a result, Mr Kaltoft argued that he had been unlawfully discriminated against due to his obesity and sought damages. The Danish court referred four questions to the CJEU for preliminary ruling.

Question 1: Is it contrary to EU law, as expressed, for example, in Article 6 TEU concerning fundamental rights, generally or particularly for a public-sector employer to discriminate on grounds of obesity in the labour market?

The AG succinctly opined that obesity does not fall under any general prohibition of discrimination under EU labour discrimination law. Jääskinen considered that the Charter of the Fundamental Rights of the EU did not apply as Denmark was not implementing EU law as such. The sufficient degree of connection with EU law above and beyond the fact that “matters covered are closely related, or one of those matters has an indirect impact on the other” was not met. Furthermore, as Articles 10 and 19 TFEU, as well as Directive 2000/78 (the employment equality Directive, which bans discrimination in employment on grounds of disability, age, religion or sexual orientation), Council Directive 2000/43/EC of 29 June 2000 (the race equality Directive) etc., address specific, exhaustive grounds of non-discrimination. These could not be seen as establishing a general prohibition against discrimination. Thus, the AG rejected a more expansive interpretation of discrimination in EU law as argued by Kaltoft.

Having swiftly disposed of the first three questions (the second two were nullified by the first answer in the negative), the AG engaged in a detailed analysis of the concepts of disability and obesity.

Question 4: Can obesity be deemed to be a disability covered by the protection provided for in Council Directive 2000/78EC… and if so, which criteria will be decisive for the assessment as to whether a person’s obesity means specifically that that person is protected by the probation of discrimination [on] grounds of disability as laid down in that directive?

The AG excluded the possibility that obesity per se would amount to a disability under Directive 2000/78. However, obesity of a certain severity may amount to a disability, provided it fulfils the criteria laid out in case law.

It should be emphasized that there is limited support for obesity per se as a disability. In the United States, in many states, obesity must be accompanied with a physiological condition to qualify as a disability. However, the Equal Employment Opportunity Commission (EEOC) has stated that “severe obesity, which has been defined as body weight more than 100 percent over the norm, is clearly an impairment” and has succeeded on this basis in a number of federal cases. Thus, obesity must reach a higher, more extreme threshold to be a disability per se.

Classifying obesity as a disability

Disability is not defined by the Employment Equality Directive. However, the Directive must, as far as possible, be interpreted consistently with the UN Convention on the Rights of Persons with Disabilities (UNCRPD). The AG followed the definition of disability offered in previous case law:  

“A limitation which results in particular from physical, mental or psychological impairments which in interaction with various barriers may hinder the full and effective participation of the person concerned in professional life on an equal basis with other workers.”

This limitation must be long term. The AG, as in the aforementioned case, relied heavily on the UNCRDP and acknowledged disability as an evolving concept.

Thus, the AG concluded that “mere” obesity is insufficient to amount to a disability, instead “most probably only WHO class III obesity, that is severe, extreme or morbid obesity, will create limitations, such as problems in mobility, endurance and mood”.

The AG also stated that it would be absurd if the individual’s ability to carry out his work excluded him from the Directive. Thus, the long term condition must cause limitations “in full and effective participation in professional life in general on equal terms with persons not having the condition”. This may be due to “physical and or psychological limitations”.

Interestingly, the AG also addressed the issue of the origin of the disability. Whether the person’s obesity can be traced to his own behaviour or an external factor was deemed irrelevant. The AG pointed out that many other disabilities may occur due to negligence or risk taking and avoid the moral spotlight.

The implications of disability

Under the EU Employment Equality Directive, an employer has a duty to reasonably accommodate an employee with a disability. Article 5:

“In order to guarantee compliance with the principle of equal treatment in relation to persons with disabilities, reasonable accommodation shall be provided. This means that employers shall take appropriate measures, where needed in a particular case, to enable a person with a disability to have access to, participate in, or advance in employment, or to provide training for such a person, unless such measures would impose a disproportionate burden on the employer. When this burden is, to a sufficient extent, remedied by existing measures as an element of disability policy in the Member State, it should not be considered disproportionate.”

Thus, the duty is not absolute and the employer may show as a defence that accommodation would impose a “disproportionate burden”. Furthermore, as the AG highlighted, the employer is not required to maintain an individual who cannot “perform the essential functions of the post”. Thus, some of the panic regarding the wide reaching ramifications of the decision appears exaggerated.

Recital 20 of the Preamble suggests such accommodation could include “premises and equipment, patterns of working time, the distribution of tasks or the provision of training or integration resources”. However, the assessment will depend on the particular individual.

The Preamble also gives some guidance with regard to assessing whether any particular accommodation amounts to a disproportionate burden in Recital 21:

"To determine whether the measures in question give rise to a disproportionate burden, account should be taken in particular of the financial and other costs entailed, the scale and financial resources of the organisation or undertaking and the possibility of obtaining public funding or any other assistance."

Comment

In Against Health; How Health became the new Morality, Kirkland and others condemn the use of “health” to make value judgments and moral assumptions on an individual. The approach of the AG, in concentrating on the functionality of the individual, instead of causality and responsibility, avoids this. However, some commentators fear that tackling obesity discrimination may serve to support or normalise obesity. Will large numbers of employers now be subject to costly implications? Is it insulting to deem a potentially “curable” condition a disability? With the “fight” against obesity staunchly declared, is it contrary to public health to describe obesity as a disability requiring protection from discrimination? Will this opinion medicalise obese individuals and further remove their sense of personal responsibility?

The experiences of obese persons should not be ignored. Discrimination in employment and healthcare is well documented and appears to be increasing. The AG has adopted a balanced position whereby only severe obesity could be a disability on its own. In reality, this covers only a small percentage of obese persons, especially considering the long term requirement. The majority of obese persons seek to lose weight but some, like Kaltoft, despite efforts, fail to do so. Factors such as diet and preventability play into other recognised disabilities, such as diabetes.

It is contended that stigma and discrimination should never be in the arsenal of a state’s public health policy. Indeed, it appears that shame is a major factor that inhibits persons with obesity from engaging with health care professionals and exercise. Thus, stigma is unlikely to decrease the number of obese persons. Furthermore, having a disability should not be seen as infantilising but instead encouraging full equal participation.

Conclusion

The opinion will prove too moderate for some and extreme for others. While the AG did not go so far as to declare obesity per se a disability, he did suggest extreme obesity could be a disability. Despite showing an understanding influenced by a rights based approach, labelling people with obesity of a certain severity needs further exploration. It does not seem fully clear as to why the AG in particular identified Class III obesity as the only category per se justifying recognition as a disability. Further explanation as to what limitations separate an individual with a BMI of 39 from a BMI of 40 is needed. Furthermore, employers must avoid stigmatising or insensitive identification of employees on the basis of physical characteristics, no matter how well intentioned. 

Barnard & Peers: chapter 20 

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