European Law Journal Articles (Nov 2005) on SSRN: Free Movement, Citizenship & Hierarchy of Legal Acts

Articles from the November 2005 issue of the European Law Journal can now be found as full-text papers on SSRN. Here are a some of the titles and abstracts:


"The Constitutional Relevance of Citizenship and Free Movement in an Enlarged Union"
European Law Journal, Vol. 11, No. 6, pp. 675-698, November 2005
NORBERT REICH (University of Bremen, Faculty of Law) [full-text here]

The concept of citizenship is analysed on three seemingly contradictory levels: its integration by the recent case law of the European Court of Justice into the existing free movement , its restriction in the accession treaties with new Member States concerning free movement of workers, and its redefinition by new Member States themselves. The result is a somewhat blurred picture: While the European Court of Justices uses citizenship to fill gaps left by primary and secondary law mostly with regard to non-discrimination, the accession treaties have allowed a 're-nationalisation' of free movement, against the promises of equality inherent in the citizenship concept, which also includes nationals from new Member countries. The concept of citizenship itself in new Member countries, as the examples of Latvia and Estonia on the one hand, and Hungary on the other demonstrate, is very much related to the (somewhat sad) lessons of the past and therefore highly politicised; it has not been shaped with regard to free movement in the EU. The author suggests a gradual 'communitarisation' of citizenship itself even though the EU seems to miss competence in this area, for example, by paying greater attention to residence as basis for Community rights.

"What Does Free Movement Mean in Theory and Practice in an Enlarged EU?"
European Law Journal, Vol. 11, No. 6, pp. 699-721, November 2005
SERGIO CARRERA (Centre for European Policy Studies) [full-text here]

The purpose of this article is to review the main challenges to the principle of free movement of persons in theory and practice in an enlarged European Union. The right to move freely represents one of the fundamental freedoms of the internal market as well as an essential political element of the package of rights linked to the very status of EU citizenship. The scope ratione personae and the current state of the principle of free movement of persons is assessed by looking at the most recent case law of the Court of Justice and the recently adopted Directive on the rights of citizens of the Union and their family members to move and reside freely within the territory of the Member States. But what are the hidden and visible obstacles to free movement of persons in Europe? How can these barriers be overcome to make free movement and residence rights more inclusive? This article addresses these issues along with the following questions: Who are the beneficiaries of the free movement of persons in an enlarged Europe? What is the impact of the recent legal developments in the freedom of movement dimension, such as the European Court of Justice case law and the new Directive? And to what extent are pro-security policies such as the Schengen Information System II and an enhanced interoperability between European databases fully compatible with the freedom of movement paradigm?


"The Court of Justice and the Union Citizen"
European Law Journal, Vol. 11, No. 6, pp. 722-743, November 2005
JAMES D. MATHER (University of Leeds, School of Law) [full-text here]

Over a decade since the conception of the Union citizen, the aim of this article very simply is to measure his growth and maturity with a sustained analysis of the jurisprudence of the Court of Justice in this regard. After all, it was Advocate General Leger who stated that it was for the Court to ensure that its full scope was attained. The article focuses predominantly on three areas of study: Member State nationality law and citizenship, the effect and meaning of Article 18 EC, and the ever-evolving right to equal treatment for the Union citizen. It is fully updated in the light of recent case law, the Treaty establishing a Constitution for Europe, and the newly adopted Directive 2004/58 EC.

"Towards a Hierarchy of Legal Acts in the European Union? Simplification of Legal Instruments and Procedures"
European Law Journal, Vol. 11, No. 6, pp. 744-765, November 2005
KOEN LENAERTS (Katholieke Universiteit Leuven (KUL) - Institute for European Law)
MARLIES DESOMER (Katholieke Universiteit Leuven (KUL) - Institute for European Law) [full-text here]

A remarkable feature of the Union's legal order is the absence of a genuine hierarchy of legal acts - a pre-established ranking of different types of legal acts in accordance with the democratic legitimacy of their respective authors and adoption procedures, which is used as a means to resolve conflicts among these different types of legal acts. There is however a clear suggestion of such hierarchy in the sequence in which the newly created legal instruments are listed in Article I-33(1) and in the organisation of the subsequent Articles I-34 to I-37 of the European Constitution. In this contribution, the (lost) logic behind the Union's current set of legal instruments is analysed, followed by an examination of the reform of the system of legal instruments carried out in the European Constitution. Lastly, an attempt is made to answer the question as to whether this reform amounts to the establishment of a genuine hierarchy of legal acts in the Union.

Krotoszynski on International Judicial Dialogue

Ronald James Krotoszynski of Washington and Lee University School of Law has posted "I'd Like to Teach the World to Sing (in Perfect Harmony): International Judicial Dialogue and the Muses - Reflections on the Perils and the Promise of International Judicial Dialogue" (Michigan Law Review, Vol. 104, May 2006 forthcoming) on SSRN. Here's the abstract:

"I'd Like to Teach the World to Sing" considers the implications and lessons of "Judges in Contemporary Democracy" for the ongoing debate about the legitimacy of international judicial dialogue, with particular attention to the problems associated with operationalizing strong forms of transnational borrowing of foreign legal precedents. The interlocutors participating in the conversations set forth in Judges in Contemporary Democracy are a remarkably talented group, including three members of national constitutional courts (Robert Badinter, Stephen Breyer, and Dieter Grimm), two members of transnational courts (Gil Carlos Rodriguez Iglesias and Antonio Cassese), and a well regarded constitutional theorist (Prof. Ronald Dworkin). Even so, the participants at times fail to appreciate the importance of political, social, economic, and cultural factors (as well as institutional structure) in the operation of both courts and legal rules. Even as the book demonstrates the potential value of informal forms of international judicial dialogue, it suggests that significant problems remain to be addressed before strong forms of international judicial dialogue (such as overt transnational borrowing of foreign legal precedents) could be implemented successfully.

"I'd Like to Teach the World to Sing" begins with a review of the idea of international judicial dialogue as propounded by its supporters and questioned by its critics. The review essay then considers and critiques the pricipal arguments set forth in Judges in Contemporary Democracy and the implications of these discussions for the project of international judicial dialogue. The essay concludes by positing that weak forms of international judicial dialogue could serve a kind of judicial muse - an ephemeral source of inspiration and creativity, but probably should not displace formal domestic sources of law in the creation, explication, and enforcement of fundamental human rights.

ECJ Grand Chamber: Marks & Spencer (C-446/03) (by Sjoerd Douma)

Sjoerd Douma, a colleague here in Leiden (Department of Tax Law, also of PWC's EU Direct Tax Group), wrote this guest post on the ECJ's decision in the case of Marks & Spencer v. Halsey, of last tuesday; many thanks for that. The decision itself can be found here.

Last Tuesday the ECJ (Grand Chamber) handed down its judgment in the case of Marks & Spencer, some eight months after Maduro’s much-discussed Opinion. The judgment was anxiously awaited by governments as well as companies, lawyers and academics. Will companies be able to benefit from loss relief in cross-border situations? Major consequences for Member States’ national budgets? Will there be a limitation of the effects of the judgment for budgetary reasons? Will the ECJ depart from its decision in Futura Participations and Singer (C-250/95)? The answers in short: no temporal limitation, at first sight no major impact on national budgets, cross-border loss-relief: yes and no, judgment aguably not consistent with Futura.

M&S, a company registered in England and Wales, in 2001 ceased trading in Continental Europe owing to the losses recorded from the mid-1990s. Subsequently, M&S claimed ‘group relief’ for losses incurred by its Belgian, German and French subsidiaries. This claim was refused by the UK tax authorities: UK resident companies in a group may not set off their profits and losses among themselves where the losses are incurred by subsidiaries which have no establishment in the United Kingdom and do not trade there.

Firstly, the ECJ held that the United Kingdom provisions constitute a restriction on freedom of establishment. The ECJ confirmed that the UK tax system was in accordance with the principle of territoriality enshrined in international tax law and recognised by Community law (see Futura). Nevertheless, it ruled that this does not in itself justify restricting group relief to losses incurred by resident companies. Accordingly, the ECJ dismissed the UK’s argument that non-UK resident and UK resident subsidiaries were not in comparable tax situations. Regarding justification, the ECJ accepted that the preservation of allocation of taxing powers between Member States, the prevention of double relief and the risk of tax avoidance where a multinational seeks to offset losses against the highest tax rate profits, taken together allow a Member State generally to deny cross-border loss relief. However, where there is no local loss relief whatsoever, whether by carryback, current relief or carryforward, an unconditional UK denial of cross-border loss relief is disproportionate.

The judgment raises many questions, such as:

· How can the M&S judgment be reconciled with the judgment in Futura where the ECJ held that “a system, which is in conformity with the fiscal principle of territoriality, cannot be regarded as entailing any discrimination, overt or covert, prohibited by the Treaty”?
· Has the ECJ changed its practice of striking down in its entirety a Member State tax provision where the application of that rule would be disproportionate?
· Why did the ECJ not expressly deal with the preliminary question on the disadvantage connected to the choice of the legal form of the foreign establishment (a disadvantage flowing from the fact that M&S chose to locate establishments in the other Member States in the form of subsidiaries rather than in the form of branches)?
· How to deal with taxpayers suffering only a timing disadvantage regarding utilisation of EU foreign subsidiaries’ losses? Might they nonetheless have a claim?
· How should we apply the test regarding the local possibilities of loss relief? Should we apply the test in the year in which the loss has arisen, or should we apply this test retrospectively when it is clear whether a local loss relief has de facto been granted? If we should apply retroactively, how should we deal with tax assesments – regarding the loss-year – which are final and not open to appeal? Or should the loss be taken into acount in another taxable year? And how does all this relate to the procedural autonomy of the Member States?

These questions will undoubtedly trigger new preliminary proceedings. It seems inevitable that positive harmonisation is needed. It is expected that the European Commission will reissue a paper on cross-border loss relief next year. Taken into account Europe’s history of direct tax harmonisation, taxpayers’ expectations should not be all too high…

ECJ Grand Chamber: Sevic Systems (C-411/03)

Last tuesday was a busy day at the ECJ, with Grand Chamber judgments being handed down in both Marks & Spencer (C-446/03) and Sevic Systems (C-411/03), both on articles 43 and 48 of the Treaty (freedom of establishment). Here's a short description of and some thoughts on the Sevic case (on M&S, see Sjoerd Douma's post above). The decision itself can be found here.

The preliminary reference in Sevic was brought by a German company which was prevented from merging with a Luxembourg company because of the fact that German legislation provided only for the inscription in the company register of mergers between German firms. The Court deals with the case through the familiar model of (a) applicability of the freedom of establishment, (b) the existence of a restriction on this freedom and (c) the possible justification for the restriction. As to the applicability of articles 43 and 48, the Court notes that "cross-border mergers constitute particular methods of exercise of the freedom of establishment, important for the proper functioning of the internal market". With regard to the existence of a restriction, the Court finds sufficient the differential treatment accorded to internal and cross-border mergers. Such difference in treatment can only be justified if it complies with the well known criteria of (1) a legitimate objective justified by imperative reasons in the public interest, (2) a measure appropriate to securing this objective, (3) which does not go further than necessary to attain the desired result. The Court notes that imperative reasons in the public interest could, in certain circumstances, justify a measure dealing with special problems caused by cross-border mergers. A general refusal of registration as at issue in this case, however, goes further than what is necesarry to protect these legitimate interests.

It is noteworthy that, in this case, it was the German company, that claimed infringement of its rights under the Treaty. This means that the freedom of establishment at issue was the right of the German company to undertake commercial activities in another Member State, by way of a merger with a local company. At times, it seems that the Opinion of A-G Tizzano looks at the case as if it involved a claim by the Luxembourg company, for example when dealing with the German government's objection that because the Luxembourg company would cease to exist at the time of the merger, there could be no question of establishment in another Member State. (Tizzano disagrees, referring to the fact that this only happens when the merger is complete, and that the contested legislation applies to an earlier stage, when both companies still have full legal personality).

The fact that its the German company that claims, also brings the case close enough to the Daily Mail case as to merrit an explicit distinction. That case also concerned restrictions on the freedom of establishment coming from the state of origin). It's true that Daily Mail was different in various respects, - for example in that it dealt with the transfer of the seat of a company, not a cross-border merger - but it would perhaps have been worthwile to point out the specific differences between the cases.

Daily Mail is discussed by A-G Tizzano when countering an objection by the Dutch government that the German legislative measure did not fall within the scope of articles 43 and 48. In the course of this argument, the Advocate General gives the following assessment (at par. 30) of the scope of these provisions:

"Therefore, the right of establishment covers all measures which permit or even merely facilitate access to another Member State and/or the pursuit of an economic activity in that Member State by allowing the persons concerned to participate in the economic life of the country effectively and under the same conditions as national operators."

This seems to be a very broad conception of the right to freedom of establishment. The Opinion refers to various cases (Case 63/86 Commission v Italy, Case 305/87 Commission v Greece, Case C-302/97 Konle, Case C-251/98 Baars and Case C-208/00 Überseering), but in none of these did I find a similar categorical and broad statement. I look forward to comments on whether this definition is indeed novel in some respects. It's an important point as the Court accepts the A-G's defintion in principle (with reference only to the Opinion and no additional citing of case law).

Test your Jurisprudential Orientation (JOT)!

Always wanted to know where you fitted in on the jurisprudential leanings spectrum? This is a good chance to find out: the Jurisprudential Orientation Test (JOT), brought to you by Maris Köpcke Tinturé, a PhD-student at Oxford. Check whether you're a Positivist, a Dworkinian, a Finnisian or Meta. People who not fit in any of these categories can decide for themselves whether they are Post-Modern 'or' (simply? blissfully?) Confused.

Follow the link on the Oxford's JDG website's sidebar, linked to above.

Meltzer on Member State Liability in Europe and the U.S.

Daniel Meltzer of Harvard Law School has posted "Member State Liability in Europe and the United States" on SSRN (International Journal of Constitutional Law, forthcoming 2006). This is the abstract:

The European Community (EC) and the United States have contrasting approaches to the place of member state liability to private parties as a remedy for the violation of the law of the union. The EC recognizes a general doctrine of member state liability in damages for violations of EC law, while American states generally possess sovereign immunity from private damage claims for violations of federal law. This contrast is paradoxical, as one would expect the U.S., a better established and more powerful federal polity, to have fewer concerns about the imposition of state liability than the less powerful and more fragile EC.

A cluster of differences between the EC and the U.S. helps to account for this paradox. These differences include the factual circumstances of their respective seminal cases; the historical settings in which they arose; civil law systems' greater hospitality to governmental liability as compared to common law systems; stronger political control over judicial appointments in the U.S.; and EC member states' stronger safeguards against unwelcome federal legislation. Collectively, these differences help to explain why state liability was deemed more important to the center and less threatening to the member states in the European Community than in the U.S.

UKHL on use of evidence possibly gained from torture abroad

The House of Lords has ruled this morning that evidence possibly gained from torture abroad may not be used against terrorist suspects in UK courts. The decision can be found here. It's a solid 91 pages and the analysis should be very interesting. I'll keep you posted on commentary as it appears on the web.

Update 14/12/05: Scott Horton now has this discussion of the House of Lords decision and its broader context here on Balkinization. He writes:

"I can’t escape thinking it was written like a worried letter to American friends. For one thing, the Law Lords decided the question before them - whether evidence derived from torture could ever be introduced in legal proceedings - almost entirely on the basis of precedent from before 1789. That is, precedent which forms the common bond between the United States and Britain, the sole aspect of American law as to which the Law Lords have the power to speak with unquestioned authority."

Forbath on Law and State-Building in the US and UK

William E. Forbath (University of Texas at Austin, School of Law) has posted "The Long Life of Liberal America: Law and State-Building in the U.S. and U.K." on SSRN (Law & History Review, forthcoming). Here's the abstract:

This brief essay compares the law and politics, processes and outcomes of twentieth-century state-building in the U.S. and England. There were conspicuous differences between the New Deal state that was fashioned in 1930s and '40s America and the welfare state England created in those decades. More interestingly, the ideology and institutional contours of this new American state were deeply influenced by the ambivalent and lawyerly brand of American liberalism that animated figures like Charles Evan Hughes and Roscoe Pound - poised between progressive commitments to social reform, social provision, and administrative-state-building, on one hand, and older, classical liberal commitments to limited and decentralized, dual federalist government and the primacy of courts and common law and traditional legal and constitutional niceties, on the other.

The architecture of what we've come to call the New Deal state and of America's system of social provision was not the product of robust New Deal liberalism. If New Dealers had been able to design the state and American public social insurance according to their specifications, its institutions (and their justificatory language) would have looked dramatically different - and far more like England's. We better understand the state that actually emerged in the U.S. as the product of a half-century of conflict and accommodation between the new liberalism of Progressive and New Deal reformers and the old or classical legal liberalism of the Lochner Constitution, and the jurists, lawyers, and politicians who hewed to it. The modern American welfare and regulatory state was not one that any single group intended or envisioned; but it bore the deep imprint of Lochner's diverse defenders and the court- and common law-dominated institutional order they fought to preserve. Small wonder, the essay suggests, that members of the legal elite, such as Hughes and Pound, who combined vast energy, abilities, and ambition with a self-conscious and astute positioning of themselves as mediators between old and new liberalisms, left such durable legacies.

Smokers at the WHO

Here's a fun topic guaranteed to lead to heated argument: Should the World Health Organisation be allowed to refuse to hire smokers? The Financial Times this weekend reported that the WHO was taking its ideal to set a good example a step further by adopting a policy of not hiring smokers in the future. The ban will, naturally (?), not apply to current staff (who are, btw, given assistance if they wish to quit the habit).

There are many hurdles here even without considering purely legal constraints (although, as the FT article remarked, it would seem that anti-discrimination provisions, both in treaties and in national law, generally do not protect smokers specifically). I would tend towards the view that although the objective is positive, its enforcement will trigger privacy concerns of such magnitude that they would outweigh possible benefits.

One problem is the fact that with smoking, the (public) activity - which importantly assumes an expressive dimension in the face of opposition - and underlying (private) choices cannot really be separated. Surely it should be possible to ban WHO staff working in the relevant policy field from publicly defending or encouraging smoking. Similarly, it should be possible to forbid them from publicly defending unsafe intercourse - another activity that is perfectly legal in itself. In the case of unsafe sex, the privacy concerns involved in regulating the actual conduct are immediately obvious (also: the activity is more directly related to existing discrimination safeguards). The smoking case occupies a less akward position on this sliding scale, but I wouldn't be sure whether the difference is big enough.

And on a completely different note: Wishing you a good Sinterklaas evening from The Netherlands!

SA Constitutional Court on Same-Sex Marriage (Fourie decision)

Balkinization reports this decision of the Constitutional Court of South Africa holding that the State cannot constitutionally forbid same-sex marriage (Minister of Home Affairs/Fourie a.o., December 1st 2005). The Court did, however, grant the State a year to pass the neccesary legal reform. A decision that looks set to play a significant role in transnational constitutional dialogue on the issue (Bets on future references in American courts, anyone?).