C-368/89

1. This Opinion concerns the question 3. The national court is asking the Court of referred to the Court for a preliminary Justice to rule on the 'validity of Council ruling in proceedings between Antonio Cris- Regulations N o 1114/88 of 24 April 1988 poltoni, a tobacco planter in Umbria, Italy, and N o 2268/88 of 19 July 1988'. and a farmers' association of which he is a member, the Fattoria autonoma tabacchi di Città di Castello (hereinafter referred to as the 'Fattoria'). 4. Regulation No 1114/88 amended the basic regulation by establishing in the tobacco sector the system known as 'maximum guaranteed quantities', pursuant 2. After delivering a quantity of leaf to which, if production exceeds a certain tobacco of the 'Bright' variety to the threshold, the intervention prices and the defendant association, Mr Crispoltoni premiums in respect of the different varieties received, by way of advance payment, and of tobacco are automatically reduced in subject to the lodging of a security, the proportion to the amount by which the premium laid down in Article 3(1) of Regu- threshold is exceeded. Regulation lation (EEC) No 727/70 of the Council of N o 1114/88 also fixed the overall 21 April 1970 on the establishment of a maximum guaranteed quantity for tobacco common organization of the market in raw at 385 000 tonnes for each of the 1988, tobacco ' (hereinafter referred to as the 1989 and 1990 harvests. 'basic regulation'). However, following the entry into force of Regulations (EEC) N o 1114/88 2 and (EEC) N o 2268/88, 3 that premium was reduced by 5 % , and the Italian intervention agency demanded 5. Regulation N o 2268/88 adopted, for the partial repayment from the Fattoria, which 1988 harvest, the prices and other elements passed on that demand to its members. Mr provided for in the basic regulation, Crispoltoni then brought an action before including the maximum guaranteed quan- the Pretore, Perugia, for a declaration that tities relating to each of the varieties of tobacco. For the 'Bright' variety, that figure * Original language: French. was fixed at 38 000 tonnes. Production in 1 — OJ, English Special Edition 1970 (I), p. 206. 1987 amounted to 40 802 tonnes, and it has 2 — Council Regulation (EEC) No 1114/88 of 25 April 1988 subsequently been established 4 that actual amending Regulation (EEC) No 727/70 on the common production in 1988 reached the level of organization of the market in raw tobacco (OJ 1988 L 110, p. 35). 42 105 tonnes. 3 — Council Regulation (EEC) No 2268/88 of 19 July 1988 fixing, for the 1988 harvest, the norm and intervention prices and the premiums granted to purchasers of leaf 4 — Commission Regulation (EEC) No 2158/89 of 18 July tobacco, the derived intervention prices for baled tobacco, 1989, determining, for tobacco from the 1988 harvest, the the reference qualities, the production areas and the quantity actually produced and the prices and premiums guaranteed maximum quantities and amending Regulation payable under the system of maximum guaranteed quan- (EEC) No 1975/87 (OJ 1988 L 199, p. 20). tities (OJ 1989 L 207, p. 15).

6. I should point out at the outset that I 9. The facts mentioned by the Council do subscribe to the view expressed by the not seem to me to be such as to allow the Council that it follows from the order for Court to disregard that case-law by calling reference that the question submitted is in question the use made by the national actually aimed at ascertaining whether the court of its power to request a preliminary two regulations are valid in so far as they ruling. concern the fixing of a maximum guaranteed quantity for tobacco of the 'Bright' variety for the 1988 harvest (38 000 tonnes). 10. I now turn to the substance of the problem. The national court has doubts as to the validity of the two regulations in question on the ground that they are contrary to the principles of the protection of legitimate expectations, the non-retroac- 7. However, the Council has doubts as to tivity of legal measures and legal certainty. whether the main proceedings are genuine, emphasizing in that respect the special features of the context in which they arose. It states that deliberations of the Regional 11. Throughout a long line of judgments, Council of Umbria mention the existence of the Court has confirmed that, proceedings brought before the national and Community courts for a declaration that certain regulations are unlawful. The Council considers it significant that the 'although in general the principle of legal defendant in the main proceedings is the certainty precludes a Community measure Fattoria, of which the plaintiff is a member, from taking effect from a point in time rather than the Italian intervention agency. before its publication, it may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected'. 6 8. In that respect, it is sufficient to cite the consistent case-law of the Court, according to which 12. Since it follows from that case-law that the principle of legal certainty precludes the retroactive application of a measure save in exceptional cases where the two conditions 'it is solely for the national courts before laid down by the Court are satisfied, there is which the dispute has been brought, and no need to dwell on it further; I can thus which must bear the responsibility for its confine myself to examining whether the subsequent judicial decision, to determine in the light of the special features of each case 6 — Judgments in Case 98/78 Racke [1979] ECR 69, at p. 86, and Case 99/78 Decker [1979] ECR 101, at p. H I . See both the need for a preliminary ruling in also judgment in Joined Cases 212/80 to 217/80 Amminis- trazione delle Finanze dello Stato v Salumi [1981] order to enable them to deliver judgment ECR 2735, at p. 2751; judgment in Case 84/81 Staple and the relevance of the questions which Dairy Products v Intervention Board [1982] ECR 1763, at p. 1777; judgments in Case 108/81 Amylum v Council they submit to the Court'. 5 [1982] ECR 3107, at p. 3130, Case 110/81 Roquette Frères v O w i c i / [ 1 9 8 2 ] ECR 3159, at p. 3206 and Case 114/81 Tunnel Refineries y Council [1982] ECR 3189, at p. 3206; 5 — Judgment ¡n Joined Cases C-297/88 and C-197/89 Diodzi judgment in Case 224/82 Meiko-Konservenfabrik v [1990] ECR 1-3763. Germany [1983] ECR 2539, at p. 2548.

'decisions having such effect must include in the statement of the reasons on which they 14. The fact is, however, that on 29 April are based particulars which justify the 1988 tobacco producers had determined desired retroactive effect'.7 their production for 1988 and that on 26 July 1988 the harvest was already under way. It is common ground, as the Pretore has stated, that tobacco of the 'Bright' 18. In this instance, the purpose to be variety is sown in special seed beds achieved, as indicated in the preamble to the in February and the young plants are regulation, does not in any way serve to planted out in the fields before the end justify the retroactive application of the of April. It is the planting-out which seems system of maximum guaranteed quantities to be the most costly operation and the one to the 1988 harvest. The first recital in the which determines the area under cultivation. preamble to Regulation No 1114/88 states It is also common ground that the harvest that, begins in July.

'in order to curb any increase in the 15. As the principle of the restriction of the Community's tobacco production and at the guarantee was thus introduced at a time same time to discourage the growing of when the decisions regarding production for varieties which are difficult to dispose of,9 the current year had already been made, provision should be made for a proportional and as the maximum guaranteed amount for reduction in the prices and premiums if the 'Bright' variety was fixed when the production exceeds a maximum guaranteed harvest to which it applied was already quantity fixed for each harvest; . . . '. under way, I think that it may rightfully be 7 — Order in Case 1/84 R Il/ord v Commission [1984] held that the regulations in question were ECR 423, at p. 431. applied retroactively. I see no reason to 8 — Emphasis added.

22. Finally, by Regulation (EEC) 26. In assessing compliance with that N o 1251/89 9 of 3 May 1989, the Council principle within the context of a measure replaced paragraph 5 of Article 4 of Regu- having retroactive effect, the following two lation N o 727/70, which it had introduced questions must, in my opinion, be scarcely a year earlier by Regulation examined: N o 1114/88. The new version expressly provides that 'the C o u n c i l . . . shall lay down every year. . . for the following year's harvest, a maximum guaranteed quantity (a) should the persons concerned have for each tobacco variety or group of anticipated the introduction of new varieties. In the first recital in the preamble regulations with retroactive effect, and should they, accordingly, have taken 9 — Council Regulation (EEC) No 1251/89 of 3 May 1989 precautions to avoid being adversely amending Regulation (EEC) No 727/70 (OJ 1989 L 129, p. 16). affected by those measures?

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CRISPOLTONI

(b) if the alteration was not foreseeable, did that for the following year the Commission the competent institution provide would propose that the overall maximum adequate transitional measures to guaranteed quantity be fixed at 350 000 protect the interests of the operators tonnes (part H, end of paragraph 2). who had made their decisions under the old regulations?

17. The first point obviously has features in In the following paragraph, it was stated common with what I have just been saying that an adjustment of 5% for the year with regard to the retroactivity of the new 1988/1989 and of 10% for the year system. 1989/1990 was foreseen.

29. It must be recognized that in such circumstances an informed operator could 32. Furthermore, in the conclusions have no doubt that the measures of support adopted by the European Council at its 38th provided by the common organization of meeting in Brussels on 11 and 12 February the markets would be subjected to certain 1988, all that was mentioned was an overall quantitative restrictions. What remained to maximum guaranteed quantity fixed for a be seen was to what extent and as from period of three years, with no indication of when. which year would be the first. The year 1988 appears for the first time in the Commission's proposal for what was to become Regulation N o 1114/88, published 30. The communication from the on 31 March 1988 (Official Journal 1988 Commission of 30 September 1987, not C 84, p. 31). However, as that text published in the Official Journal but mentions only the maximum guaranteed probably known in interested circles, stated quantity of 385 000 tonnes for the whole

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OPINION OF MR MISCHO —CASE C-368/89

38. The second question which must be examined in the context of the protection of legitimate expectations is whether the transi- 34. But what should be noted above all is tional measure which was laid down by the the fact that that last figure was not known Council may be considered as having suffi- until a very late stage. It does not even ciently safeguarded the interests of the appear in the Commission's proposal, planters who had decided on the scale of published on 30 May 1988 (Official Journal their production in the circumstances 1988 C 139, p. 95), which envisaged an described above. It should be noted that the amount of 63 000 tonnes for a group of transitional measure in question consisted in four varieties of tobacco. The figure of the fact that, for the 1988 harvest, the 38 000 tonnes appeared for the first time in reduction in the prices and premiums was Regulation N o 2268/88, at issue here, restricted to 5 % , even where the maximum which was published on 26 July 1988. In guaranteed quantity was exceeded by a that regulation, the four varieties were higher percentage. For the 'Bright' variety, allocated a total of 60 500 tonnes instead of the actual overrun amounted to 10.8%. It is the 63 000 tonnes envisaged in the proposal. also interesting to note, in passing, that there was an overrun of the maximum guaranteed quantity by only five varieties of tobacco out of 34 (see Annex I to Regu- lation (EEC) N o 2158/89, fourth column). 35. It should be pointed out, finally, that for the years 1989 and 1990 the Council, which had not in any way altered its policy of limiting the guarantees, fixed the quota at 44 250 tonnes and 46 750 tonnes 39. In those circumstances, I consider that a respectively. In such a context, the figure of distinction must be made between agri- 38 000 tonnes laid down for 1988 appears to cultural production where decisions be truly astonishing. regarding the extent of planting must be

made at a precise moment in the year, and future effects of situations created under where sales contracts are traditionally previous regulations, ' ' but not where new concluded before a certain date, and other rules are applied retroactively to choices types of production, such as that of milk, made when the former rules obtained. where production continues throughout the year, albeit with seasonal fluctuations. In the latter cases, it seems to me to be acceptable that the intervention price may be reduced in the course of the year, since such a change will affect only the milk which will 41. But the Commission is not claiming be obtained afterwards. The position is merely that the transitional measure was different for a crop such as tobacco, where, adequate; it puts forward a much more as has been seen, the extent of production is radical argument, contending determined once and for all in April. The Italian Government and the plaintiff, moreover, stated at the hearing, without being contradicted, that the great majority of sales contracts for tobacco are concluded before 1 May each year. 'that the changes to the system of guar- antees did not make it less favourable than the system previously in force, and that its validity thus is not conditional on compliance with the principles of the protection of legitimate expectations, the non-retroactivity of legal rules and legal certainty. Pursuant to Articles 2(2) and 4(1) of Regulation N o 727/70, in the version in 40. With regard to that type of situation, I force prior to the adoption of Regulation consider that any reduction in guaranteed N o 1114/88, the C o m m u n i t y — a n d conse- prices, by whatever percentage, made after quently the Council — had wide economic the decisions regarding production and sales and political discretion to fix the prices and have been made, infringes the legitimate premiums. When fixing either prices or expectations which the producers could premiums, the Community legislature could, properly have acquired, before making in particular, take into account any forecasts those decisions, that the level of the concerning changes in the level of guaranteed prices in the previous year supply... would be maintained, at least in nominal terms. Accordingly, the only transitional measure which could be considered as adequate is one which exempted current production from the change in the system. Even though, as the Court has consistently The prices and premiums, once fixed on held, and confirmed quite recently in its that basis, remained unaltered throughout judgment in Delacre,l0 a producer can have the year, even if the figures relating to the no legitimate expectation that the support harvests subsequently showed that they which his production enjoys will be main- could have been fixed at a higher level tained at its present level, that is true with because the total actual production had regard to the application of new rules to the been lower than forecast.

With the reform a less rigid method of harvest that it was possible to calculate the determination was chosen, which enables low level in advance. the Council to continue to fix the prices and premiums at a low level to take account of forecasts of surplus supply, but which at the same time allows higher prices and 43. On the other hand, according to the premiums to be fixed if in fact supply first recital in the preamble to Regulation remains lower than forecast.. . N o 1114/88, that system was introduced in order to 'curb any increase i n . . . production'. Thus a system of unlimited guarantees (even though it On the basis of the reform, the Council, included a certain risk that premiums would which, pursuant to Regulation N o 727/70 be reduced from one year to the next) has in its previous version, could have fixed the been succeeded by a system including, at premium for the 'Bright' variety — on the least potentially, a guarantee which basis of forecasts of supply— at ECU 2.338 decreases sharply in proportion to the per kilogram (the premium ultimately quantity produced. received by farmers under the new system), could thus have fixed it at ECU 2.461 per kilogram if the supply had been lower than 44. Even if it were accepted that the 38 000 tonnes and could have fixed inter- previous rules allowed the Council to fix the mediate premiums in proportion to other prices and premiums at the level which they levels of supply. finally reached in 1988, the legal situation resulting from the former system was more favourable to producers than that resulting from the new regulations. T h e latter system While before the reform producers obtained does not make it possible for a producer to only the lowest premium, it was possible know, at the time of embarking upon his after the reform for them to obtain a higher production year, what quantity he must premium corresponding to a change in the produce in order to maximize his income, level of supply which was more favourable since that depends on the prices and than that f o r e c a s t ' . u premiums which themselves depend on the extent to which the maximum guaranteed quantity is exceeded. The percentage of the overrun will not be known until after the 42. What is to be made of that argument? I harvest. On the other hand, under the share the opinion expressed at the hearing former system, once the prices had been by counsel for M r Crispoltoni, according to fixed, even at a low level, producers had no which that presentation of the new rules difficulty in determining the level of inverts the way the system actually works. production which would enable them to The Council begins by fixing the prices and maximize their income. premiums at a high level and it is not until much later, after the total for the whole harvest has been arrived at, that it calculates, in proportion to the overrun of 45. Moreover, under the new system the the maximum guaranteed quantity, their income received depends not only on the actual, lower, level. It is only because a production decisions made by each indi- 'cut-ofP had been provided for the 1988 vidual planter, but just as much on those made by the other planters. If a certain 12 — Paragraphs 5 and 6 of the Commission's observations. number of producers of the same variety

'[i]t seems difficult to consider the 46. In the second place, the Commission's amendment of a provision, which was reasoning presupposes that, within the capable, because of its inflexibility, of framework of the previous system, the causing losses or gains for those concerned, Council was perfectly entitled to fix, at any as adversely affecting any established time during the spring or summer of 1988, the position which they hold' (paragraph 8). premium for 'Bright' tobacco for the 1988 harvest at ECU 2.338 per kilogram. As I have already pointed out, the basic regu- lation provides that the premium must be The Court added that the old provision did fixed before 1 November of the year before not confer on the persons concerned the the harvest. The Commission relies on the certainty of benefiting from an increase in fact that that rule had not been observed for the intervention price because the Council a long time because it had become could, on the basis of another provision, customary for the Council to adopt each have taken measures to prevent the increase spring, within the framework of a 'single of the refund. According to the Court, they package', the prices for all agricultural 'had . . . to take into account the possibility' products. Without wishing to express an that owing to the second provision the opinion on that problem in all its anticipated benefits under the old article complexity, I do however suggest that the would be taken away from them. The Court Court should declare that a practice which is concluded that the Council did 'not change flatly contrary to the applicable law cannot be intrinsically the situation of the persons invoked to deny the existence of a change concerned' and that the alteration which leaving those concerned worse off, because had come about was not to be regarded as nemo auditur propriam turpitudinem allegans infringing the protection of the legitimate (no one who relies on his own misconduct is expectations of persons concerned (para- heard). graphs 9 and 10).

50. For all those reasons, I consider that in tonnes for tobacco of the 'Bright' variety for this case there has definitely been a change the 1988 harvest. leaving those concerned in a less favourable position. It was not reasonably foreseeable, 52. I do not think it necessary to confine and as the transitional measures were that conclusion to tobacco harvested in inadequate, the legitimate expectations of Umbria. It is apparent from Annex III to the planters of 'Bright' tobacco were Regulation No 2268/88 that the 'Bright' infringed. variety is produced only in Italy. It may be presumed that at the time when that regu- 51. Since the two conditions to which the lation, which fixed the maximum Court makes the retroactive application of a guaranteed quantity of 38 000 tonnes, was measure subject — namely that the retro- published on 26 July 1988, the trans- active effect be indispensable and that the planting of the young plants had already legitimate expectations of those concerned been carried out throughout the territory of be respected — have thus not been fulfilled, Italy, so that the criticism regarding the it must be concluded that the regulations at unlawful retroactivity of the new system issue are invalid in so far as they lay down a holds good for all the regions of maximum guaranteed quantity of 38 000 production.

Conclusion

53. I suggest, therefore, that the national court's question be answered as follows:

'Council Regulation (EEC) N o 1114/88 of 25 April 1988 and Council Regulation (EEC) No 2268/88 of 19 July 1988 are invalid in so far as they lay down a maximum guaranteed quantity of 38 000 tonnes with regard to tobacco of the "Bright" variety harvested in 1988.'