C-119/88

1. In these proceedings, the applicants claim 3. Fruit and vegetables are subject to a damages from the Community under Article common organization of the market, the 215(2) of the EEC Treaty by reason of rules relating to which are contained in losses allegedly suffered as a result of the Regulation N o 1035/72. The price support adoption of Commission Regulation mechanism laid down in that regulation, No 3587/86 (Official Journal 1986, L 334, which is fairly weak compared with that p. 1). That regulation altered the applicable in other sectors, has two conversion factors applicable in calculating elements. First, producers' organizations the price at which fruit and vegetables with may fix a withdrawal price below which certain commercial characteristics are they will not offer for sale products supplied bought in. by their members (Article 15(1)). When a withdrawal price is fixed, producers' organ- izations are required to grant an indemnity to their members for quantities that remain unsold. Member States may fix a maximum level for the withdrawal price. Producers' organizations may also decide not to put on sale products which do not comply with marketing rules. Where this occurs, 2. The applicants are eight in number. producers' organizations are required to Four of them, namely Aerpo, ALPO, grant their members compensation, the groupement de producteurs 'Hermitage- calculated on the basis of the withdrawal Basse Isère', and the groupement price, for the quantities that remain unsold 'Dauphiné-Vivarais', are producers' organ- (Article 15(1), as supplemented by A n k l e 4 izations within the meaning of Article 13 of of Regulation (EEC) No 1154/78, Official Regulation (EEC) No 1035/72 (Official Journal 1978, L 144, p. 5). Journal English Special Edition 1972 (II), p. 437), as amended. Of this group, the first two are based in Italy, the second two in France. Each of the remaining four applicants, namely CAPO, C O T , Mr Jean- Claude Guillermain and Mr Jean Julien, is a producer of fruit and vegetables and a member of one of the applicant producers' 4. T o finance these withdrawal measures, organizations. producers' organizations are required to

7. The main function of the buying-in price (i) contribute to the support of the is to determine when Member States incomes of farmers, become obliged to buy in products which are offered to them (Article 19, as amended by Article 3 of Regulation No 2454/72, supra). When the actual price on particular (ii) stabilize market prices without leading markets remains below the buying-in price to the formation of structural surpluses for three consecutive days, the Commission in the Community, is required to record, if the Member State in question so requests, that the market in the relevant product is in a state of serious crisis. At that point, Member States become (iii) consider the interests of consumers, subject to an obligation to buy in products of Community origin which are offered to them, provided the products meet certain requirements as to quality and size and that on the basis of the development of the they have not been withdrawn from the average of the prices recorded during the market under Article 15. Buying-in oper- preceding three years on the most represen- ations cease when prices remain higher than tative Community production markets, for a the buying-in price for three consecutive product with defined commercial charac- days.

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AERPO AND OTHERS y COMMISSION

10. In its defence the Commission suggests, The contested regulation somewhat obliquely, that the action is, at least in part, inadmissible. It claims that those of die applicants which are producers' organizations could have brought proceedings in the national courts chal- 9. By Regulation No 3587/86, the lenging the amount of financial compen- Commission introduced new conversion sation paid to them by the competent factors to be applied to the buying-in prices national authorities. The validity of Regu- for fruit and vegetables. According to the lation No 3587/86 could then have been applicants, the result was a reduction in (i) the subject of a reference for a preliminary the prices at which certain products covered ruling. Had that regulation been declared by Regulation No 1035/72 were bought in, invalid pursuant to such a reference, this (ii) the amount of financial compensation could have resulted in the payment of Member Sutes were required to grant compensation by reference to the old producers' organizations intervening conversion factors. pursuant to Article 15, and (iii) the level of the indemnities paid by producers' organiz- ations to their members in respect of unsold products. The applicants claim that Regu- lation No 3587/86 is unlawful and that 11. The Commission seems to be referring they should be awarded damages repre- to the case-law of the Court laying down senting, in the case of the producers' organ- that the admissibility of an action for izations, the difference between the damages is subject in certain cases to the financial compensation to which they would exhaustion of any domestic remedies which have been entitled from Member Sutes in would enable the applicant to recover application of the old conversion factors, compensation from the national authorities. and the amounts calculated by applying the An action for damages will only be inad- new conversion factors. In the case of missible on this basis, however, where the the applicant producers, the claim is for national remedies provide an effective damages representing the difference means of protection for individuals who between the indemnities to which they consider themselves harmed by acts of the would have been entitled from the Community institutions: see the judgments

12. As the applicants point out, however, their claim is not limited to the difference 'where legislative action involving measures between the compensation and indemnities of economic policy is concerned, the payable on the basis of the new conversion Community does not incur non-contractual factors and the amounts payable under the liability for damage suffered by individuals old conversion factors, but also encompasses as a consequence of that action, by virtue of the loss they claim to have suffered by the provisions contained in Article 215, reason of the alleged fall in market prices second paragraph, of the Treaty, unless a consequent upon the adoption of the sufficiently flagrant violation of a superior contested regulation. Compensation for this rule of law for the protection of the indi- loss can only be awarded by the Court. vidual has occurred' (paragraph 11). Although the applicants only claim a symbolic sum in respect of this alleged loss, this tactic seems designed to circumvent the difficult issue of assessing that loss rather In order to establish whether that statement than simply to avoid having to bring is applicable in this case, it is necessary to proceedings in the national courts. consider whether Regulation No 3587/86 constitutes a legislative act involving, on the part of the institution which adopted it, choices of economic policy.

contention that Regulation No 3587/86 is buying-in price in the mechanism estab- not a legislative act but is analogous to an lished by Regulation No 1035/72. That this administrative act of general scope. It is involves subjective choices of economic clear that this regulation, being of general policy rather than merely the rigid application, is truly legislative in character. application of a formula is reflected by the applicants' failure to establish that the Commission actually made mistakes in fixing the amounts of the conversion factors or to specify the level at which they should, in the applicants' view, have been set. It is confirmed by the requirement laid down in Article 16(4) of Regulation N o 1035/72 that conversion factors are to be fixed 16. As to whether it involves measures of in accordance with the procedure laid economic policy, it will be recalled that the down in Article 33 (the so-called purpose of conversion factors is to allow the management committee procedure). Under buying-in price of products with commercial that procedure, the Commission is required characteristics different from those of the to submit a draft of any measures to be relevant pilot product to be calculated. In taken to a committee of representatives of fixing the buying-in price, the Council is the Member States. The committee must required by Article 16(3) of Regulation then deliver an Opinion on the draft. If the No 1035/72, as amended by Regulation measures subsequently adopted by the No 2454/72, to take special account, 'for Commission do not comply with the each of the relevant products, of the charac- committee's Opinion, the Council may, teristics of the market and, more within a period of one month, substitute its particularly, the extent to which market own decision for that of the Commission. prices fluctuate'. It follows that, in fixing the This procedure implies the possible exercise conversion factors applicable in particular of discretion at three stages: first, by the cases, the Commission must apply similar Commission; then by the committee of considerations to products with commercial national representatives; and finally by the characteristics different from those of the Council. It clearly envisages that views may pilot products, as indicated by the second differ as to what the proper functioning of recital of the preamble to Regulation the common organization of the market in No 3587/86. fruit and vegetables requires and establishes a mechanism for determining which view is to prevail.

19. The applicants have put forward three the mechanism established by Regulation grounds on which they consider Regulation N o 1035/72 may in my view be regarded as N o 3587/86 to be unlawful. First, they say intended, at least in part, to protect the that the Commission has exceeded its interests of the class to which the applicants powers because the effect of the new belong, namely traders dealing in the conversion factors is to reduce the buying-in products to which that regulation applies. prices fixed by the Council. This, it is said, As Article 39(l)(b) of the Treaty indicates, amounts to a usurpation of the Council's it is one of the objectives of the common prerogatives by a Commission intent on agricultural policy to protect the interests of pursuing policy objectives of its own, the agricultural community. The namely a reduction in the level of inter- Kampjffmeyer case suggests that the rules vention. Secondly, the applicants say that relating to that mechanism may therefore be the contested regulation undermines the seen as designed for the protection of indi- basic principles of the common organization viduals for the purposes of the Court's of the market in fruit and vegetables by decision in the Schöppenstedt case (see altering the effect of the prices fixed by the Joined Cases 5/66, 7/66 and 13/66 to Council on the evolution of market prices. 24/66 Kampjffmeyer v Commission [1967] Thirdly, the applicants claim that the ECR 245). This is so notwithstanding the reasoning of the contested regulation is fact that the mechanism in question defective. doubtless also has the broader objective of promoting the proper functioning of the relevant market organization.

measure without being able to obtain conversion factors are set will obviously compensation from public funds . . . '. need to be reviewed as the requirements of the market evolve. Altering the conversion factors previously applied cannot therefore be said to amount to interfering with the prerogatives of the Council. It is rather an It went on to emphasize that, in a legislative integral part of the mechanism for regu- lating the common organization of the field involving the exercise of a wide market in fruit and vegetables established by discretion such as the common agricultural Regulation No 1035/72. The fact that the policy, the Community does not incur Commission subsequently decided, in the liability 'unless the institution concerned has further exercise of its discretion, to mitigate manifestly and gravely disregarded the limits the effects of the new conversion factors by on the exercise of its powers' (paragraph 6). adopting Regulation No 1998/87 laying down certain derogations from the contested regulation for the 1987/88 marketing year (Official Journal 1987, L 188, p. 30) does not in my view have any 23. In such cases, it is therefore necessary bearing on the legality of the latter regu- to enquire, as the Court pointed out in the lation. 'isoglucose' cases (Joined Cases 116/77 and 124/77 Amylum v Council and Commission [1979] ECR 3497, paragraph 16, and Case 143/77 KSH v Council and Commission [1979] ECR 3583, paragraph 13), whether there has been a grave and manifest disregard of the limits the Commission is required to observe in exercising its 25. That the fixing of new conversion discretion within the framework of the factors by the Commission falls squarely common agricultural policy. within the framework of the division of tasks envisaged by Regulation N o 1035/72 is confirmed by the procedure which was required by that regulation to be followed prior to the adoption of Regulation No 3587/86 and which I described briefly 24. This is a very strict test which the Court above. That procedure allows the Council may one day wish to reconsider. I do not to substitute its own decision for that of the believe it to be necessary for the Court to Commission when the committee of do so in this case, however, for the national representatives delivers an adverse applicants have not in my view succeeded in Opinion on the Commission's draft showing any misuse whatsoever by the measures. It appears from the last recital of Commission of the discretion conferred the preamble to the contested regulation upon it. In exercising its power to fix new that no Opinion was delivered by the conversion factors, the Commission was committee on the measures contained in simply giving effect to the duty cast upon it that regulation within the time-limit set by by Article 16(4) of Regulation No 1035/72. its chairman. It may therefore be assumed It is true that conversion factors alter the that the committee did not feel sufficiently buying-in prices applicable to products with strongly about those measures to give the certain characteristics, but this is the Council the opportunity to substitute its function they are intended by that regu- own views. In these circumstances, the lation to perform. The level at which Commission was required to implement the

measures it considered necessary. In doing will be called upon to deal with them. They so, it cannot therefore be said to have are, first, whether or not there is a causal interfered with the powers of the Council. link between the contested regulation and the loss said to have been suffered by the applicants; and, secondly, the assessment of damages. As to the question of causation, it has not in my view been established that those of the applicants which constitute producers' organizations in fact suffered any direct loss at all by reason of the 26. I would add that, in assessing the adoption of Regulation N o 3587/86. Even seriousness of the rule alleged to have been if the amount of financial compensation to violated, the Court also has regard to the which they were entitled from Member extent of the category affected. Thus, in the States fell after the introduction of the new HNL case, supra, the Court observed, in the conversion factors, that fall would have course of rejecting the applicants' claim, been cancelled out by an equivalent that the measure in question 'affected very reduction in the indemnities they had to pay wide categories of traders' (paragraph 7). to their members. I also have reservations Conversely, in the 'Maize Gritz' and about the effect of the contested regulation 'Quellmehl' cases (Cases 64/76 and 113/76, on market prices generally, for the market 167/78 and 239/78, 27/79, 28/79 and may be affected by many factors. Even if it 45/79 [1979] ECR 3091; Case 238/78 could be established that market prices for [1979] E C R 2955; Cases 241/78, 242/78 the relevant products fell after the new and 245/78 to 250/78 [1979] ECR 3017; conversion factors entered into force, it Cases 261/78 and 262/78 [1979] ECR would not automatically follow that the 3045), where actions against the former was due to the latter. The applicants Community under Article 215(2) were have not in my view discharged the burden successful, the Court pointed out that the on them of showing that this was the case. Community's disregard of the rule of law which had been violated affected a limited and clearly defined group of commercial operators. In the instant case, the effects of the contested regulation will have been felt by a broad group, namely anyone dealing in the numerous products to which that regu- lation applies. This in my view constitutes a further ground for concluding that the applicants have failed to establish a suffi- ciently serious breach of a superior rule of law. 28. With regard to the assessment of damages, the applicants have made some attempt to establish the extent of the loss they claim to have suffered as a direct result of the introduction of the new conversion factors. However, the parties remain at odds over whether the products singled out by the applicants to illustrate the effect of the 27. Finally, I will consider briefly two contested regulation are representative of further issues which have been addressed by fruit and vegetables generally. This is an the parties although, in the light of what has issue which would have to be pursued were been said above, I do not believe the Court the applicants' claim to be upheld in

(2) order the applicants t o p a y the costs.

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