This Article examines the interactions between European Community and national law, in the context of Member State public tort liability. Specifically, the Article analyzes Brasserie du Pecheur v. Federal Republic of Germany, a case that pitted German beer purity legislation against requirements of Community law. In that case, the European Court of Justice (ECJ) ruled that acts or omissions of the national legislator may, under certain conditions, give rise to Member State public tort liability, which is adjudicated in the national court systems. The German Federal Court of Justice dismissed the case after finding that the conditions of state liability were not met under either German or Community law.
The Article discusses in detail the nature and characteristics of the Member State liability principle conceived by the ECJ; despite the silence of treaty law on this issue, the ECJ has long supported the notion that a Member State may incur tort liability for breaching community law. As a result of ECJ jurisprudence, supranational judge-made law may deeply permeate domestic legal orders. However, the German court's dismissal of the damages claim in Brasserie du Pecheur demonstrates that Member State liability is not open-ended. Rather, a balance may be achieved between European Community (EC) compliance interests and Member State domestic institutional prerogatives.
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On October 24, 1996, the highest civil court in Germany, the Federal Court of Justice (Bundesgerichtshof (BGH)), rejected a claim for damages levied by Brasserie du Pecheur against the Federal Republic of Germany.(1) The decision drew the final curtain on a drama of serial litigation(2) pitting German legislation against requirements of European Community (Community) law.(3) The German laws had confined the use of the designation "beer" (Bier) to products brewed from certain raw materials and prohibited the use of additives, basically codifying the ancient Purity Requirement for Beer (Reinheitsgebot fur Bier)--the hallmark of German beer brewing tradition--which stipulates malted barley, hops, yeast, and water as the only permitted ingredients for brewing beer.(4) Under European Court of Justice (ECJ) case law, beers that do not conform to the German beer recipe legislation may still be sold under the designation of beer in Germany.(5) They may contain other raw ingredients and additives, but must be unequivocally labeled.(6)
In contrast, the matter of damages to parties allegedly injured as a result of the Purity Requirement for Beer was not raised until Brasserie du Pecheur (hereinafter Brasserie), which involved proceedings before the German civil courts and the ECJ. The ECJ's preliminary ruling, which the BGH had requested, held that Member State public tort liability may be triggered by domestic legislation violative of Community law.(7) Nevertheless, the BGH, finding that the conditions of state liability were not met under German or Community law, dismissed the case.(8)
This Article employs the beer litigation as a case study to analyze the interactions and fault lines between Community and national law, as exhibited in the context of Member State public tort liability. Part I juxtaposes the ECJ's and the BGH's Brasserie decisions. Part II analyzes the content, characteristics, and nature of the state liability doctrine conceived by the ECJ. Part III assesses the effects of the ECJ's jurisprudence on the national legal orders. Finally, Part IV provides findings and conclusions.
THE BRASSERIE DECISIONS OF THE ECJ AND THE BGH
The plaintiff, the French beer brewery of Brasserie du Pecheur based at Schiltigheim (Alsace), alleged that, until 1981, it exported significant amounts of beer into the Federal Republic of Germany.(10) Brasserie claimed that it was forced to discontinue exports of beer into Germany in late 1981 because the German authorities objected to the beer asserting that it did not comply with the German Purity Requirement for Beer laid down in the German Law on Beer Duty (Biersteuergesetz (BStG)).(11) Fines were assessed against staff of the plaintiffs German contract partner, which undertook the importation and distribution of the beer in Germany, as well as buyers acting for food market chains, in which the beer was sold.(12) In its letter of November 4, 1981 addressed to the plaintiff, the distributor declared that the frequency of administrative proceedings pressed against it as the importer made it advisable to desist from all importation of the plaintiff's beer into Germany forthwith until the resolution of the issues raised by the Purity Requirement for Beer.(13)
The Commission of the European Communities took the view that the provisions of the German Law on Beer Duty contradicted the Treaty Establishing the European Community (EC Treaty) and initiated infringement proceedings against the Federal Republic of Germany. The Commission's complaint was directed at the prohibition on marketing under the designation Bier (beer) of beer lawfully manufactured in other Member States according to different recipe rules (designation prohibition), as well as the importation ban on beer containing additives (ban on additives).(14) By judgment of March 12, 1987, the ECJ held that both prohibitions imposed by Germany were incompatible with the EC Treaty.(15)
Brasserie consequently brought an action against the Federal Republic of Germany for reparation of the loss incurred from 1981 until 1987 as a result of the import restrictions, including a partial claim for DM 1.8 million ($1.1 million).(16) The District Court (Landgericht) and Upper District Court (Oberlandesgericht)(17) rejected the complaint and the plaintiff appealed to the BGH.(18) After receiving the ECJ's preliminary ruling on the conditions under which a Member State may incur liability for damage caused to individuals by breaches of Community law attributable to that State, the BGH denied the claim for damages levied by the plaintiff.(19)
The Preliminary Ruling of the ECJ(20)
On March 5, 1996, the ECJ handed down its preliminary ruling resolving the five questions submitted to it by the BGH. The ECJ's answers addressed (1) the emergence of Member State liability for acts and omissions of the national legislature violative of Community law,(21) (2) the conditions under Community law triggering a guarantee of a right to reparation of loss or damage caused to individuals by breaches of Community law attributable to a Member State,(22) (3) the permissibility of making reparation conditional upon the existence of fault,(23) (4) the criteria for determining the amount of the reparation,(24) and (5) the period covered by the reparation.(25)
State Liability for Acts and Omissions of the National Legislature Violative of Community Law
The ECJ ruled that acts or omissions of the national legislature contrary to Community law qualify as potential triggers of state liability, which requires Member States to compensate individuals for damages suffered as a result of breaches of Community law.(26) The ECJ reasoned that the principle, which was inherent in the system of the EC Treaty, alleged breaches committed by the domestic legislature.(27) According to the ECJ, in light of the fundamental requirement of the Community legal system that Community law be uniformly applied,(28) the rise of Member State liability "cannot depend on domestic rules [governing] the division of powers between constitutional authorities."(29) The Court stated that this approach was consistent with international law(30) and, in the Community legal system, "all State authorities, including the legislature, are bound in performing their tasks to comply with the rules laid down by [Community] law directly governing the situation of individuals."(31)
The ECJ rejected two alleged limitations to the emergence of Member State liability. According to the Court, state liability was not dependent upon the absence of a directly effective provision of Community law(32) or upon the existence of formal legislation granting individuals access to reparations from the government.(33) The ECJ explained that the right of individuals to rely on directly effective provisions before national courts was only a minimum guarantee, not in itself sufficient to ensure full and complete compliance with Community law.(34) The Court emphasized that direct effect could "not, in every [instance], secure for individuals the benefit of the rights conferred on them by [Community] law"(35) and the operation of direct effect was not designed to remedy damages which individuals may incur as a result of a breach of Community law attributable to a Member State.(36) The Court argued that the full effectiveness of Community law would be impaired if individuals were unable to obtain redress when their rights were infringed by a Member State's breach of Community law.(37) The ECJ found that in cases of infringement of directly effective Community law, "the right to reparation [was] the necessary corollary of the direct effect" of Community law when the breached provision caused the damage sustained by the injured parties.(38) According to the Court, such a situation had arisen in the case at bar.(39)
Addressing the second alleged limitation, the ECJ held that its jurisdiction to interpret questions of Community law included adjudging "the existence and extent of state liability for damage ensuing as a result of a breach of obligations incumbent on the State by virtue of Community law."(40) The Court reasoned that its primary task and power of interpretation was rooted in primary Community law directing the ECJ to ensure that "in the interpretation and application of [the treaties] the law is observed."(41) This, the Court continued, included ruling on a question pursuant to generally accepted methods...