C-50/86

OPINION OF MR LENZ —CASE 50/86

O P I N I O N O F MR A D V O C A T E GENERAL LENZ delivered on 27 October 1987 *

Mr President, Order the European Economic Community Members of the Court, to pay the costs.

A — Facts 4. The Council contends that the Court should: 1. In the proceedings on which I deliver my „ opinion today, the society Les Grands Dismiss the application in so far as it is Moulins de Paris, the applicant, seeks directed against it; compensation from the European Economic Community, represented by its institutions Reserve the costs at this stage of the the Council and the Commission, the proceedings. defendants, for the damage which it claims to have suffered by reason of the fact that 5. The Commission contends that the Court the Community institutions did not grant should: for its product 'Granidon' the production refunds provided for in respect of substitute products. Dismiss the application as unfounded;

2. The applicant considers the different Order the applicant to pay the costs. treatment of Granidon and its substitute products unlawful. In its view, owing to the refusal to grant production refunds on B — Opinion' Granidon, it has suffered damage which it divides into three parts: I — Admissibility

of justice that, where Community liability is applicant could certainly have challenged involved by reason of the act of one of its the decisions refusing payment of the institutions, it should be represented before production refund before the French admin- the Court by the institution or institutions istrative courts and in those proceedings against which the matter giving rise to urged a reference for a preliminary ruling to liability is alleged. ' Consequently, in an be made to the Court, it concedes that, action for damages brought against the according to the case-law of the Court, an European Economic Community, which had action for damages under Article 178 and relied on allegedly unlawful legislation of 215 of the EEC Treaty must be regarded as the Council, the Court allowed the an independent remedy. With that statement application against the Community repre- it must be agreed. sented by the Council and the Commission since the Council had adopted the contested measure upon the Commission's proposal. 10. The action against the European Economic Community, represented by the Council and the Commission, is therefore admissible. 8. The same principle must apply if the measure involving Community liability were attributable to a legislative omission on the II — Substance part of the Council. Since the Council and the Commission act jointly in the legislative process in which the Commission has the 1. The unlawfulness of the conduct of the right to take the initiative but the Council Community institutions takes the final decision, it does not seem reasonable to allow the Community to be represented only by the Commission, which, 11. The applicant takes the view that the after all, could not have drawn up the European Economic Community has omitted legislative measure on its own incurred liability towards it by not allowing authority. That conclusion is not shaken by the rules on production refunds granted in the fact that, according to Article 43 of the respect of the products traditionally used in EEC Treaty, the Council can only act upon the brewing industry to apply to Granidon. a Commission proposal in matters It claims that Granidon can be used as a concerning the common agricultural policy substitute product for starch and maize since, according to Article 152 of the EEC gritz, that is to say products traditionally Treaty, the Council may request the used in the brewing industry; if production Commission to submit to it any appropriate refunds are granted in respect of starch and proposals. However, it did not do this with maize gritz but not in respect of the regard to the matter now in question. substitute product Granidon, this constitutes a breach of the principle of equal treatment.

14. It must be borne in mind first of all that 17. To support its proposition that, in order the product manufactured by the applicant to observe the principle of equal treatment, is not identical with those products2 on substitute products should also attract which production refunds were granted. In production refunds, the applicant relies in view of its high protein content, it is not particular on the Court's judgments of 19 quite the same as the product which it October 19774 and 4 October 1979.5 probably resembles most closely, which is wheat starch. Even though it was only in Commission Regulation No 2169/86 of 10 July 1986 laying down detailed rules for the control and payment of the production 18. In the judgments of 19 October 1977 refunds in the cereals and rice sectors3 that the Court held first of all that, according to it was stipulated that the degree of purity of the second subparagraph of Article 40 (3) of starch in the dry matter must in all cases be the Treaty, the common organization of at least 97%, it may not be assumed that agricultural markets had to exclude any during the period of over 18 years in which discrimination between producers or production refunds were granted on certain consumers within the Community. That kinds of starch the term 'starch' had not provision undoubtedly prohibited any been defined. At any rate, the possibility for discrimination between producers of the a product consisting of only 85% starch to 4 — Judgment of 19 October 1977 in Joined Cases 117/76 and be regarded as starch for the purposes of 16/77 Albert Ruckdeschel & Co. and Another v Haupt- production refunds must have been zollamt Hamburg-St. Annen; Dumalt AG v Hauptzollamt Itzehoe [1977] ECR 1753; judgment of 19 October 1977 in excluded. Otherwise the applicant could Joined Cases 124/76 and 20/77 SA Moulins et Huileries de Pont-à-Mousson v Office national interprofessionnel des have demanded production refunds on the céréales (ONIC); Providence agricole de la Champagne v basis of the law then in force. O N / C [1977] ECR 1795. 5 — Judgment of 4 October 1979 in Joined Cases 241, 242 and 245 to 250/78 DGV, Deutsche Getreideverwertung und 2 — Regulación N o 367/67/EEC of the Council of 25 July Rheinische Krafifutterwerke GmbH and Others v Council 1967 fixing production refunds on maize gritz and meal and Commission [1979] ECR 3017; judgment of 4 October and broken rice used in the brewing industry, Official 1979 in Joined Cases 261 and 262/78 lnterquell Journal, English Special Edition 1967, p. 216; Regulation Stärke-Chemie GmbH & Co. KG and Another v Council N o 371/67/EEC of the Council of 25 July 1967 Fixing and Commission of the European Communities [1979] ECR production refunds on starches and quellmehl, Official 3045; judgment of 4 October 1979 in Joined Cases 64 and Journal, English Special Edition 1967, p. 219. 113/76, 167 and 239/78, 27, 28 and 45/79 P. Dumortier 3 — Official Journal 1986, L 189, p. 12. frères SA and Others v Coanci/[1979] ECR 3091.

same product; however, it did not refer in on the one hand and maize starch on the such clear terms to the relationship between other) were given equality of treatment with different industrial or trade sectors in the regard to production refunds, it was not sphere of processed agricultural products. established that there were objective circum- Nevertheless, the prohibition of discrimi- stances which could have justified altering nation laid down in the aforesaid provision the Community rules. In that case, too, the was merely a specific enunciation of the Court found that the principle of equal general principle of equality, which was one treatment had been disregarded. of the fundamental principles of Community law. That principle required that similar situations should not be treated differently unless differentiation was objectively justified. 21. In the judgments of 4 October 1979 the Court then drew the necessary conclusion from the decisions of 19 October 1977 and in essence found that the undertakings concerned were entitled to compensation. 19. Applying those principles the Court then went on to consider in Joined Cases 117/76 and 16/77 the abolition of the production refund on quellmehl and the retention of the production refund on starch. In doing so, it had to take into 22. The common feature in the aforesaid account the particular fact that until 1974 decisions was that products which had the Community regulations were based on previously been treated identically were the assumption that both products were treated differently from a certain point in interchangeable. Since the defendant time. However, that fact alone would Community institutions were not able to probably still not have persuaded the Court justify the different treatment of the two to find that the prohibition of discrimination products as from 1974, the Court then held had been disregarded if the Community in its judgment of 19 October 1977 that it institutions had been in a position to was not established that there were objective substantiate their view that on account of circumstances which could have justified the new findings the aforesaid products were no alteration of the previous system. Conse- longer interchangeable. Consequently, it quently, the abolition of the refund for seems to me that a further legal principle is quellmehl when the refund for maize-based implicit in the aforesaid decisions, namely starch was maintained constituted a breach the principle of the protection of legitimate of the principle of equal treatment. expectation: the traders concerned were entitled to rely on the fact that the Community institutions would continue to regard the aforesaid products as inter- changeable — a fact which was recognized in the legislation of the Community — until 20. The Court stated something similar in an objective alteration in the situation its judgment of 19 October 1977 in Joined occurred. For only where the interchange- Cases 124/76 and 20/77. In that judgment, ability of the products is established is it too, it held that in view in particular of the possible to consider the general principle of length of time during which the two equal treatment or the prohibition of products in question (maize groats and meal discrimination.

23. A point worth noting in this connection which are not directly comparable to the is that in both judgments of 19 October products indirectly receiving preferential 1977 the Court found that, whilst the treatment. second subparagraph of Article 40 (3) of the Treaty undoubtedly prohibited any discrimi- nation between producers of the same 26. Although the applicant has shown that product, it did not refer in such clear terms its product could be used in the brewing to the relationship between different industry with some success, it has not industrial or trade sectors in the sphere of proved beyond doubt that it is fully inter- processed agricultural products. T o that changeable with the traditional products. It extent, the case-law of the Court seems to is also clear that the product in question is a me to give the Community institutions a preliminary product which could be certain degree of discretion as regards the processed into starch through a further question of comparability of similar process and which could then attract products even when applying the principle production refunds. of equal treatment. If it is conceded'that such a discretion exists in the case of tradi- tional products, then it must be even more true when it is a question of assessing the 27. In those circumstances Granidon cannot economic importance of a product new to be equated with starch. There is therefore the market in order then to be able to draw no breach of the principle of equal the necessary legal conclusions. Finally, the treatment. principle of the protection of legitimate expectation no longer applies in this case. 2. The special requirements needed for a legis- lative wrong to give rise to liability 24. Another point to be considered in this regard is that the production refund provided for in Article 11 of the common 28. Since no unlawful conduct on the part market organization for cereals is not meant of the Community institutions was found, to stabilize cereal prices — that is the further examination of the claim for purpose of the intervention rules — but damages would be unnecessary; I will rather to ensure that the basic products therefore examine the further submissions of needed by the processing industry are made the applicant only for the sake of available to it at a lower price than that completeness. which would result from applying the rules of the common market organization. 6

33. If the Commission may still be regarded as having a legal duty to consider the applicant's request and determine whether a production refund had to be granted for Granidon, the fact that no such refund was granted still cannot be considered a grave 31. In principle it is not to be excluded that breach of the principle of equal treatment or a breach of the prohibition of discrimination a manifest and serious overstepping of may be regarded as a breach of a superior powers for the following reasons: since the rule of law for the protection of the indi­ Commission had been anxious since 1970 to vidual. If the European Economic restrict the system of production refunds Community were to treat producers of the and since its proposals had at least some same product differently for example, it is success in the Council — until the Court in quite possible that it could incur liability its judgment of 19 October 1977 declared through that action. However, that principle invalid the Council regulations enacted on cannot apply so strictly where the equal the Commission's proposal — it cannot be treatment of interchangeable products is blamed for not wanting to have the Council concerned. Finally, as the Court stated in its include new products in the system of judgment of 19 October 1977, the production refunds at a time when it was prohibition of discrimination laid down in anxious to restrict the production refunds. It Article 40 of the EEC Treaty does not refer thus acted within the limits of its discretion in such clear terms to the relationship in making decisions of economic policy, between different industrial or trade sectors even if it supposedly infringed the principle in the sphere of processed agricultural of equal treatment through that conduct. products. Furthermore, the present case The Commission tried to pursue a concerns alleged discrimination brought consistent and logical economic policy on about by an omission, which would the question of production refunds and this therefore raise the question from which attempt cannot be regarded aş a manifest point in time could it be said that the and serious overstepping of its powers. Community institutions had a legal duty to act, only upon the breach of which a claim for damages could be based.

Granidon included in the system of refunds. (b) Lost profit It must be conceded that the development and marketing of the applicant's product may have been hindered by the rather slow decision-making process of the Community institutions but this is due to the ponderous 39. The applicant estimates that it would nature of the Community decision-making have made a profit of FF 6 000 000 in the mechanism, which a trader wishing to last five years prior to its action if Granidon receive subsidies for a newly-developed had been competitive through the grant of product on a regulated 'market' when he production refunds. That estimate is based knows that no provision has been made for on assumptions regarding the possible them to be paid on that product must put up market share which Granidon could have with. captured in the brewing industry. According to the applicant, those assumptions are based on market research which has been undertaken by the applicant itself and does 35. Therefore, even if the Community not show the objective factors on which the institutions had acted unlawfully, the expected turnover is meant to be based. conditions for the European Economic Even the correspondence between the Community to incur liability for a legislative applicant and various breweries, which has wrong in the sphere of economic policy been submitted to the Court at its request, would not be fulfilled. does not enable any reliable conclusion to be drawn about the level of expected turnover. Furthermore, according to the accounts for the financial year 1985/86 3. The damage incurred submitted by the applicant, a loss would have occurred even if production refunds had been granted. The burden would be on the applicant at least to show how a profit 36. Last of all, on the question of damage, of FF 6 000 000 for the previous five years there would remain to consider the may positively be deduced from that loss. existence of damage and of a causal link However, since it has not done so, it has between the Community's omission and the not proved that it actually lost the profit in damage suffered by the applicant. question.

'(1) The application is dismissed;

(2) The applicant is ordered to pay the costs except the Council's costs ;

(3) The Council is to bear its own costs.'