Judgment of the Court of 6 December 1984. - SA Biovilac NV v European Economic Community. - Non-contractual liability of the Community for an unlawful or possibly a lawful act - Sales of skimmed-milk powder at a reduced price. - Case 59/83.



European Court reports 1984 Page 04057

Spanish special edition Page 00883

Swedish special edition Page 00701

Finnish special edition Page 00683



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . ACTION FOR DAMAGES - IMMINENT AND FORESEEABLE DAMAGE - DECLARATION OF THE COMMUNITY ' S LIABILITY - APPLICATION TO THE COURT - PERMISSIBILITY

( EEC TREATY , ART . 215 )

2 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - MILK AND MILK PRODUCTS - STOCKS OF SKIMMED-MILK POWDER - MEASURES FOR REDUCING STOCKS - PARTIAL INEFFECTIVENESS - EFFECT ON THE LAWFULNESS OF THE MEASURES - NONE

( EEC TREATY , ART . 39 ( 1 ); COMMISSION REGULATIONS NOS 1753/82 AND 2923/82 )

3 . AGRICULTURE - COMMON ORGANIZATION OF THE MARKETS - DISCRIMINATION BETWEEN PRODUCERS AND CONSUMERS - GRANT OF SUBSIDIES FOR SKIMMED-MILK POWDER AND NOT FOR WHEY - DIFFERENCE IN TREATMENT OBJECTIVELY JUSTIFIED - ABSENCE OF DISCRIMINATION

( EEC TREATY , ART . 40 ( 3 ), SECOND SUBPARAGRAPH )

4 . NON-CONTRACTUAL LIABILITY - LEGISLATIVE MEASURE - UNLAWFUL OR LAWFUL ACTION - LIABILITY OF THE COMMUNITY - CONDITIONS - ABNORMAL DAMAGE

( EEC TREATY , ART . 215 , SECOND PARAGRAPH )

Summary

1 . ARTICLE 215 OF THE TREATY DOES NOT PREVENT AN APPLICATION FROM BEING MADE TO THE COURT FOR A DECLARATION THAT THE COMMUNITY IS LIABLE FOR IMMINENT DAMAGE WHICH IS FORESEEABLE WITH SUFFICIENT CERTAINTY , EVEN IF THE DAMAGE CANNOT YET BE PRECISELY ASSESSED .

2 . EVEN IF THE AIM OF RECONCILING THE NEED TO ENSURE A FAIR STANDARD OF LIVING FOR THE AGRICULTURAL COMMUNITY WITH THAT OF STABILIZING MARKETS , WHICH THE COMMISSION SOUGHT TO ACHIEVE WHEN IT LAID DOWN THE RULES FOR IMPLEMENTING MEASURES FOR REDUCING STOCKS OF SKIMMED-MILK POWDER , IS ONLY PARTIALLY ATTAINED , IT IS NOT POSSIBLE TO CONCLUDE THAT THE LEGISLATION ENACTED BY THE COMMISSION WAS UNLAWFUL VIS-A-VIS ARTICLE 39 OF THE TREATY SINCE THE LEGALITY OF A MEASURE CAN BE ADVERSELY AFFECTED ONLY IF THE MEASURE IS MANIFESTLY UNSUITABLE FOR ACHIEVING THE AIM PURSUED .

3 . AS A SPECIFIC EXPRESSION OF THE GENERAL PRINCIPLE OF EQUALITY , THE PROHIBITION OF DISCRIMINATION LAID DOWN IN THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE EEC TREATY DOES NOT PREVENT COMPARABLE SITUATIONS FROM BEING TREATED DIFFERENTLY IF SUCH DIFFERENCE IN TREATMENT IS OBJECTIVELY JUSTIFIED . CONSEQUENTLY , THE FACT THAT SUBSIDIES ARE GRANTED IN RESPECT OF SKIMMED-MILK POWDER , WHICH PLAYS A PART IN SUPPORTING THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS , WHILST THEY ARE NOT PROVIDED FOR IN RESPECT OF WHEY , WHICH IS ONLY A WASTE PRODUCT OF CHEESE-MAKING WHICH MUST BE ELIMINATED , MAY NOT BE REGARDED AS DISCRIMINATION .

4 . AN ACTION FOR DAMAGES BROUGHT UNDER ARTICLE 215 OF THE TREATY FOR UNLAWFUL LEGISLATIVE ACTION CANNOT SUCCEED UNLESS THE DAMAGE ALLEGED BY THE APPLICANT EXCEEDS THE LIMITS OF THE ECONOMIC RISKS INHERENT IN OPERATING IN THE SECTOR CONCERNED . THAT PRINCIPLE WOULD HAVE TO BE APPLIED A FORTIORI IF THE CONCEPT OF LIABILITY WITHOUT FAULT WERE ACCEPTED IN COMMUNITY LAW .

Parties

IN CASE 59/83

SA BIOVILAC NV , HAVING ITS REGISTERED OFFICE IN LEUZE , BELGIUM , REPRESENTED BY HANS G . KEMMLER , BARBARA RAPP-JUNG AND ALEXANDER BOHLKE , RECHTSANWALTE , FRANKFURT AM MAIN , WITH CHAMBERS AT 223-225 RUE DE LA LOI , BRUSSELS , AND WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ERNEST ARENDT , 34B RUE PHILIPPE-II ,

APPLICANT ,

V

EUROPEAN ECONOMIC COMMUNITY , REPRESENTED BY THE COMMISSION , ITSELF REPRESENTED BY JORN SACK , A MEMBER OF ITS LEGAL DEPARTMENT , ACTING AS AGENT , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ORESTE MONTALTO AND MANFRED BESCHEL , ALSO MEMBERS OF ITS LEGAL DEPARTMENT , JEAN MONNET BUILDING , KIRCHBERG ,

DEFENDANT ,

Subject of the case

APPLICATION FOR AN AWARD OF DAMAGES MADE UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY ,

Grounds

1 BY APPLICATION LODGED AT THE COURT REGISTRY ON 11 APRIL 1983 SA BIOVILAC NV , WHICH SINCE 1978 HAS MANUFACTURED AND MARKETED KULACTIC AND SINCE 1980 BIOBLANCA , TWO BASIC FEEDINGSTUFFS FOR PIGLETS AND POULTRY MADE FROM WHEY , BROUGHT AN ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 215 OF THE EEC TREATY FOR COMPENSATION FOR THE DAMAGE WHICH IT ALLEGEDLY SUFFERED AS A RESULT OF THE ENACTMENT AND IMPLEMENTATION OF CERTAIN COMMISSION REGULATIONS .

2 THE APPLICANT CONTENDS THAT THE ALLEGED DAMAGE - AN APPRECIABLE REDUCTION IN THE SALES OF ITS PRODUCTS SINCE NOVEMBER 1982 AND A DRASTIC REDUCTION IN THOSE SALES SINCE 1 MARCH 1983 - WAS CAUSED BY REGULATION ( EEC ) NO 368/77 OF 23 FEBRUARY 1977 ON THE SALE BY TENDER OF SKIMMED-MILK POWDER FOR USE IN FEED FOR PIGS AND POULTRY ( OFFICIAL JOURNAL 1977 , L 52 , P . 19 ) AND BY REGULATION ( EEC ) NO 443/77 OF 2 MARCH 1977 ON THE SALE AT A FIXED PRICE OF SKIMMED-MILK POWDER FOR USE IN FEED FOR PIGS AND POULTRY ( OFFICIAL JOURNAL 1977 , L 58 , P . 16 ), AS AMENDED BY REGULATION NO 1753/82 OF 1 JULY 1982 ( OFFICIAL JOURNAL 1982 , L 193 , P . 6 ) AND BY REGULATION NO 2923/82 OF 29 OCTOBER 1982 ( OFFICIAL JOURNAL 1982 , L 304 , P . 64 ). REGULATION NO 1753/82 BROUGHT BACK INTO FORCE REGULATIONS NOS 368/77 AND 443/77 ON THE SALE AT A REDUCED PRICE BY THE INTERVENTION AGENCIES OF SKIMMED-MILK POWDER FOR FEEDING TO PIGS AND POULTRY . REGULATION NO 2923/82 INSERTED INTO THOSE TWO REGULATIONS NEW DENATURING FORMULAE FOR SKIMMED-MILK POWDER SOLD AT REDUCED PRICES . ACCORDING TO THE APPLICANT , THOSE FORMULAE DO NOT PREVENT SKIMMED-MILK POWDER SOLD BY THE INTERVENTION AGENCIES FROM BEING USED AS BASIC FEED FOR PIGLETS , ALTHOUGH THAT IS CONTRARY TO THEIR INTENDED PURPOSE .

3 THE APPLICANT ' S ACTION IS PRIMARILY BASED ON THE ALLEGED ILLEGALITY OF THE MEASURES ADOPTED BY THE COMMISSION . ONLY IN THE ALTERNATIVE , IN CASE THOSE MEASURES SHOULD BE REGARDED AS LAWFUL , DOES IT CONTEND THAT THE COMMUNITY IS STILL LIABLE BECAUSE THE GENERAL SCHEME INTRODUCED BY THE COMMISSION IMPOSED A ' ' SPECIAL SACRIFICE ' ' ON THE APPLICANT .

ADMISSIBILITY

4 THE COMMISSION CONTESTS THE ADMISSIBILITY OF THE ACTION ON SEVERAL GROUNDS .

FAILURE TO HAVE RECOURSE TO NATIONAL REMEDIES

5 IN THE COMMISSION ' S VIEW , THE APPLICANT OUGHT TO HAVE BROUGHT ITS ACTION FOR DAMAGES IN THE NATIONAL COURTS SINCE IT IS DIRECTED ABOVE ALL AGAINST MEASURES WHICH THE NATIONAL AUTHORITIES ADOPTED IN IMPLEMENTATION OF COMMUNITY LAW , NAMELY THE SALES OF SKIMMED-MILK POWDER AT REDUCED PRICES BY THE INTERVENTION AGENCIES .

6 IT MUST BE OBSERVED WITH REGARD TO THAT OBJECTION THAT IN ITS APPLICATION THE APPLICANT DOES NOT CHALLENGE THE MEASURES ADOPTED BY THE NATIONAL AUTHORITIES TO IMPLEMENT COMMUNITY LAW BUT THE COMMISSION ' S MEASURES THEMSELVES SINCE IT IS CLEAR FROM ITS ARGUMENTS THAT IT COMPLAINS THAT BY ENACTING REGULATION NO 1753/82 THE COMMISSION BROUGHT BACK INTO FORCE REGULATIONS NOS 368/77 AND 443/77 AND SECONDLY THAT IN ENACTING REGULATION NO 2923/82 IT FAILED TO INSERT INTO THOSE REGULATIONS DENATURING FORMULAE WHICH WOULD HAVE EFFECTIVELY PREVENTED THE SKIMMED-MILK POWDER SOLD BY THE INTERVENTION AGENCIES FROM BEING SUBSTITUTED FOR POWDER SOLD UNDER COMMISSION REGULATION NO 1725/79 OF 26 JULY 1979 ( OFFICIAL JOURNAL 1979 , L 109 , P . 1 ) FOR USE AS FEED FOR PIGLETS . ACCORDING TO THE APPLICANT , THE ESTABLISHMENT OF THAT SCHEME BY THE COMMISSION CAUSED THE DAMAGE FOR WHICH IT CLAIMS COMPENSATION .

7 IT FOLLOWS FROM THE ABOVE OBSERVATIONS THAT THE COURT HAS JURISDICTION IN THIS CASE AND THAT IT MUST THEREFORE EXAMINE THE QUESTION WHETHER THE ENACTMENT OF THOSE REGULATIONS MAY GIVE RISE TO LIABILITY ON THE PART OF THE COMMUNITY BY VIRTUE OF ITS LEGISLATIVE ACTION . THE OBJECTION OF INADMISSIBILITY BASED UPON THE FAILURE TO HAVE RECOURSE TO NATIONAL REMEDIES MUST THEREFORE BE REJECTED .

THE OBJECTION THAT THE ACTION IS PREVENTIVE

8 THE SECOND GROUND ON WHICH THE COMMISSION CONTESTS THE ADMISSIBILITY OF THE ACTION IS THAT IT IS PREVENTIVE . IT CONTENDS THAT , IN SO FAR AS THE ACTION IS BASED ON THE ALLEGED ILLEGALITY OF THE REGULATIONS ADOPTED BY THE COMMISSION , THE APPLICANT HAS NOT PROVIDED SUFFICIENT EVIDENCE THAT AT THE TIME WHEN PROCEEDINGS WERE INSTITUTED DAMAGE DUE TO CERTAIN MEASURES ADOPTED BY THE COMMUNITY WAS FORESEEABLE WITH SUFFICIENT CERTAINTY . AS REGARDS THE CONTENTION THAT THE COMMUNITY IS LIABLE EVEN IN THE ABSENCE OF ANY ILLEGALITY , IT ARGUES THAT THE VERY NATURE OF SUCH AN ACTION REQUIRES THAT THE NATURE AND EXTENT OF THE DAMAGE SHOULD BE CLEARLY ESTABLISHED AT THE TIME WHEN IT IS BROUGHT .

9 IN THIS REGARD IT MUST BE BORNE IN MIND THAT THE COURT HAS REPEATEDLY HELD THAT ARTICLE 215 OF THE TREATY DOES NOT PREVENT AN APPLICATION FROM BEING MADE TO THE COURT FOR A DECLARATION THAT THE COMMUNITY IS LIABLE FOR IMMINENT DAMAGE WHICH IS FORESEEABLE WITH SUFFICIENT CERTAINTY , EVEN IF THE DAMAGE CANNOT YET BE PRECVISELY ASSESSED . IN THAT REGARD , IT MUST BE NOTED THAT THE APPLICANT STATED IN ITS APPLICATION , WITHOUT BEING CONTRADICTED , THAT SKIMMED-MILK POWDER DENATURED IN ACCORDANCE WITH FORMULA IK LAID DOWN IN REGULATION NO 2923/82 HAD BEEN ON SALE ON THE BELGIAN MARKET AS BASIC FEED FOR PIGLETS SINCE NOVEMBER 1982 . IN PRODUCING A TABLE COMPARING THE PRICES OF ITS PRODUCTS WITH THE PRICES OF THE SKIMMED-MILK POWDER SOLD BY THE INTERVENTION AGENCIES THE APPLICANT HAS THEREFORE SUFFICIENTLY DEMONSTRATED THAT THE ALLEGED DAMAGE IS IMMINENT AND FORSEEABLE . THE OBJECTION OF INADMISSIBILITY BASED ON THE PREVENTIVE NATURE OF THE ACTION MUST THEREFORE BE REJECTED .

LIABILITY ARISING FROM THE ALLEGED ILLEGALITY OF CERTAIN REGULATIONS

10 AS THE COURT CONFIRMED ONCE AGAIN IN ITS JUDGMENT OF 17 DECCEMBER 1981 ( IN JOINED CASES 197 TO 200 , 243 , 245 AND 247/80 , LUDWIGSHAFENER WALZMUHLE V COUNCIL AND COMMISSION ( 1981 ) ECR 3211 , AT P . 3246 ), IN ORDER FOR THE COMMUNITY TO INCUR NON-CONTRACTUAL LIABILITY FOR AN UNLAWFUL ACT A NUMBER OF CONDITIONS MUST BE MET AS REGARDS THE UNLAWFULNESS OF THE CONDUCT ALLEGED AGAINST THE INSTITUTIONS , THE EXISTENCE OF DAMAGE AND THE EXISTENCE OF A CAUSAL LINK BETWEEN THAT CONDUCT AND THE ALLEGED DAMAGE ; IF THE LEGISLATIVE ACT IN QUESTION INVOLVES CHOICES OF ECONOMIC POLICY , LIABILITY IS NOT INCURRED UNLESS A SUFFICIENTLY SERIOUS BREACH OF A SUPERIOR RULE OF LAW FOR THE PROTECTION OF THE INDIVIDUAL HAS OCCURRED . IN THIS REGARD THE COURT HAS STATED , IN PARTICULAR IN ITS JUDGMENT OF 25 MAY 1978 ( IN JOINED CASES 83 AND 94/76 , 4 , 15 AND 40/77 , BAYERISCHE HNL VERMEHRUNGSBETRIEBE GMBH & CO . KG AND OTHERS V COUNCIL AND COMMISSION , ( 1978 ) ECR 1209 , AT P . 1224 , THAT IT IS NECESSARY TO ESTABLISH , HAVING REGARD TO THE RELEVANT PRINCIPLES OF THE LEGAL SYSTEMS OF THE MEMBER STATES , THAT THE INSTITUTION IN QUESTION HAS MANIFESTLY AND GRAVELY DISREGARDED THE LIMITS ON THE EXERCISE OF ITS POWERS .

11 TO SUPPORT ITS CONTENTION THAT THE MEASURES ADOPTED BY THE COMMISSION ARE UNLAWFUL , THE APPLICANT PUTS FORWARD FOUR SUBMISSIONS : FIRST , THAT THE AIM ' ' TO STABILIZE MARKETS ' ' REFERRED TO IN ARTICLE 39 ( 1 ) ( C ) OF THE EEC TREATY AND DEFINED MORE SPECIFICALLY IN ARTICLE 7 ( 2 ) OF REGULATION NO 804/68 OF THE COUNCIL OF 27 JUNE 1968 ON THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 176 ) WAS DISREGARDED ; SECONDLY , THAT THE PROHIBITION OF DISCRIMINATION LAID DOWN IN ARTICLE 40 ( 3 ) OF THE TREATY WAS CONTRAVENED ; THIRDLY , THAT THE RIGHT TO PROPERTY AND THE RIGHT TO CARRY ON AN ESTABLISHED BUSINESS WAS INFRINGED AND FOURTHLY THAT THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTION WAS DISREGARDED . THE APPLICANT CONTENDS THAT ALL THOSE RULES ARE SUPERIOR RULES OF LAW WHICH THE COMMISSION MUST OBSERVE WHEN ENACTING REGULATIONS .

12 WITH REGARD TO THE FIRST SUBMISSION , THE APPLICANT STATES THAT THE BRINGING BACK INTO FORCE OF REGULATIONS NOS 368/77 AND 443/77 BY REGULATION NO 1753/82 AND THE INSERTION IN THOSE REGULATIONS BY REGULATION NO 2923/82 OF DENATURING FORMULAE WHICH WERE UNSUITABLE FOR PREVENTING SKIMMED-MILK POWDER SOLD UNDER REGULATIONS NOS 368/77 AND 443/77 FROM BEING SUBSTITUTED FOR POWDER SOLD UNDER REGULATION NO 1725/79 LED TO A DESTIBILIZATION OF THE MARKET IN SKIMMED-MILK POWDER FOR USE AS FEED FOR PIGLETS CONTRARY TO THE AIM REFERRED TO IN ARTICLE 39 OF THE TREATY AND DEFINED MORE SPECIFICALLY IN THE FIRST SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION NO 804/68 .

13 THE COMMISSION RESPONDS BY CONTENDING THAT , IN VIEW OF THE LARGE SURPLUSES OF SKIMMED-MILK POWDER AND THE LIMITED MEANS PUT AT ITS DISPOSAL BY THE COUNCIL FOR REDUCING THE LARGE STOCKS HELD BY THE INTERVENTION AGENCIES , IT TOOK THE ONLY COURSE OPEN TO IT BY BRINGING BACK INTO FORCE REGULATIONS NOS 368/77 AND 443/77 ON THE SALE AT A REDUCED PRICE OF SKIMMED-MILK POWDER FOR USE AS PIG AND POULTRY-FEED AND THAT ITS ACTION WAS INTRA VIRES SINCE THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION NO 804/68 EMPOWERS IT TO ADOPT SPECIAL MEASURES TO DISPOSE OF SKIMMED-MILK POWDER WHICH CANNOT BE MARKETED ON NORMAL TERMS DURING A MILK YEAR . THE PARTICULARLY LOW PRICE OF PRODUCTS COMPETING WITH SKIMMED-MILK POWDER ON THE MARKET IN PIG AND POULTRY-FEED , ESPECIALLY THE PRICE OF SOYA IMPORTED FROM THE UNITED STATES , WHICH WAS APPROXIMATELY 17 TO 18 ECU PER TONNE , JUSTIFIED THE FIXING OF THE PRICE OF SKIMMED-MILK POWDER FOR FEEDING TO PIGS AND POULTRY AT APPROXIMATELY 20 ECU PER TONNE .

14 AFTER LEARNING SOME TIME AFTER THE BRINGING BACK INTO FORCE OF REGULATIONS NOS 368/77 AND 443/77 THAT , OWING TO THE DENATURING FORMULAE LAID DOWN IN THOSE REGULATIONS , SKIMMED-MILK POWDER SOLD UNDER THEM WAS BEING INCREASINGLY USED AS A SUBSTITUTE FOR SKIMMED-MILK POWDER SUBSIDIZED UNDER REGULATION NO 1725/79 , IT ADOPTED REGULATION NO 2923/82 BY WHICH NEW DENATURING FORMULAE WERE INSERTED INTO REGULATIONS NOS 368/77 AND 443/77 WITH THE INTENTION OF PREVENTING SUCH SKIMMED-MILK FROM BEING USED IN FEED FOR PIGLETS .

15 THE COMMISSION POINTS OUT THAT IT IS DIFFICULT , IF NOT IMPOSSIBLE , TO FIND A DENATURING METHOD WHICH IS HARMLESS TO ANIMALS WEIGHING MORE THAN 25 KG WHILST MAKING THE SKIMMED MILK TOTALLY UNSUITABLE FOR ANIMALS WEIGHING LESS THAN 25 KG . IT DOES NOT DISPUTE THAT THE METHOD SUGGESTED BY THE APPLICANT , NEMELY THE INCORPORATION OF A COLOURING AGENT IN THE SKIMMED-MILK POWDER SOLD BY THE INTERVENTION AGENCIES , COULD HAVE BEEN USED INSTEAD OF THE DENATURING METHODS . HOWEVER , SINCE THE EFFECTIVENESS OF SUCH A MEASURES DEPENDED ON THE ESTABLISHMENT OF A SYSTEM OF CHECKING PIG-BREEDING FARMS , IT WAS ULTIMATELY LESS SUITABLE THAN THE DENATURING METHOD FINALLY ADOPTED , GIVEN THE PARTICULARLY HIGH NUMBER OF PIG-BREEDING FARMS IN THE COMMUNITY ( APPROXIMATELY 2 000 000 ) AND THE HIGH COSTS WHICH SUCH A MEASURE WOULD INVOLVE . BESIDES , THE PROVISIONS CITED BY THE APPLICANT DO NOT CONSTITUTE RULES OF LAW FOR THE PROTECTION OF THE INDIVIDUAL .

16 THE SUBMISSION THAT THE AIM REFERRED TO IN ARTICLE 39 ( 1 ) ( C ) AND DESCRIBED MORE PARTICULARLY IN THE FIRST SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION NO 804/68 WAS DISREGARDED CANNOT BE UPHELD . IN THIS REGARD IT NEED ONLY BE OBSERVED FIRST OF ALL THAT , AS THE COURT HAS STATED ON NUMEROUS OCCASIONS , THE INSTITUTIONS MUST RECONCILE THE VARIOUS AIMS LAID DOWN IN ARTICLE 39 , WHICH DOES NOT ALLOW ANY ONE OF THOSE AIMS TO BE PURSUED IN ISOLATION IN SUCH A WAY AS TO MAKE THE ATTAINMENT OF OTHER AIMS IMPOSSIBLE . REGULATION NO 1753/82 WAS ADOPTED PURSUANT TO THE GENERAL POLICY APPLIED TO MILK PRODUCTS . ONE OF THE MAIN AIMS OF THAT POLICY IS TO ENSURE THAT COMMUNITY MILK PRODUCERS IN ACCORDANCE WITH ARTICLE 39 ( 1 ) ( B ) OF THE EEC TREATY RECEIVE A REASONABLE INCOME THROUGH THE FIXING OF A TARGET PRICE FOR MILK WHICH IS GUARANTEED BY INTERVENTION BUYING OF THE PRINCIPAL PRODUCTS INTO WHICH MILK IS PROCESSED , NAMELY BUTTER AND SKIMMED-MILK POWDER ; IN THAT REGARD THE REGULATION CONSTITUTES A SUPPLEMENTARY MEASURE FOR ATTAINING THAT AIM .

17 FURTHERMORE , THE INTRODUCTION OF DENATURING METHODS WHICH - AS IS SHOWN BY THE FIRST RECITAL IN THE PREAMBLE TO REGULATION NO 2923/82 - WERE INTENDED TO PREVENT SKIMMED MILK SOLD UNDER REGULATIONS NOS 368/77 AND 443/77 FROM BEING SUBSTITUTED FOR SKIMMED MILK SOLD AT A HIGHER PRICE UNDER REGULATION NO 1725/79 IS SUFFICIENT PROOF THAT THE COMMISSION MADE AN ATTEMPT WHEN IMPLEMENTING THE MEASURES FOR REDUCING STOCKS OF SKIMMED-MILK POWDER TO RECONCILE THE AIM OF ENSURING A FAIR STANDARD OF LIVING FOR THE AGRICULTURAL COMMUNITY WITH THE AIM OF STABILIZING MARKETS . THE FACT THAT THE TECHNICAL METHODS OF DENATURING CHOSEN TO ACHIEVE THAT AIM SUBSEQUENTLY PROVED TO BE PARTIALLY INEFFECTIVE DOES NOT ALTER THE APPRAISAL OF THE LEGALITY OF THE CONTESTED LEGISLATION VIS-A-VIS ARTICLE 39 OF THE TREATY SINCE THE LEGALITY OF A MEASURE CAN BE ADVERSELY AFFECTED ONLY IF THE MEASURE IS MANIFESTLY UNSUITABLE FOR ACHIEVING THE AIM PURSUED BY THE COMPETENT COMMUNITY INSTITUTION .

18 WITH REGARD TO THE SUBMISSION ALLEGING AN INFRINGEMENT OF THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE TREATY , ACCORDING TO WHICH THE COMMON ORGANIZATION OF THE MARKETS MUST EXCLUDE ANY DISCRIMINATION BETWEEN PRODUCERS OR CONSUMERS WITHIN THE COMMUNITY , THE APPLICANT POINTS OUT THAT PRODUCTS MANUFACTURED FROM WHEY AND SKIMMED-MILK POWDER ARE BOTH COVERED BY THE COMMON ORGANIZATION OF THE MARKET AND CONTENDS THAT THE LATTER PRODUCT HAS RECEIVED GREATER PREFERENTIAL TREATMENT THROUGH NUMEROUS DIRECT AND INDIRECT SUBSIDIES THAN PRODUCTS MADE FROM WHEY .

19 THAT IS NOT AN ARGUMENT CAPABLE OF CASTING DOUBT ON THE LEGALITY OF THE COMMISSION MEASURES AT ISSUE . IN A CONSISTENT LINE OF DECISIONS THE COURT HAS HELD THAT , AS A SPECIFIC EXPRESSION OF THE GENERAL PRINCIPLE OF EQUALITY , THE PROHIBITION OF DISCRIMINATION LAID DOWN IN THE SECOND SUBPARAGRAPH OF ARTICLE 40 ( 3 ) OF THE EEC TREATY DOES NOT PREVENT COMPARABLE SITUATIONS FROM BEING TREATED DIFFERENTLY IF SUCH DIFFERENCE IN TREATMENT IS OBJECTIVELY JUSTIFIED . THE GRANTING OF DIRECT OR INDIRECT SUBSIDIES IN RESPECT OF SKIMMED-MILK POWDER IS OBJECTIVELY JUSTIFIED OWING TO THE VERY NATURE OF THE PRODUCT AND THE MARKET-SUPPORTING ROLE IT CONSEQUENTLY PLAYS IN THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS , WHILST WHEY DOES NOT HAVE THOSE CHARACTERISTICS . THE LATTER PRODUCT IS A WASTE PRODUCE OBTAINED IN THE MAKING OF CHEESE AND NORMALLY MUST BE ELIMINATED BY THE CHEESE MANUFACTURERS CONCERNED .

20 THE DIFFERENT TREATMENT OF THOSE TWO PRODUCTS IS THEREFORE BASED ON OBJECTIVE DIFFERENCES ARISING FROM THE ECONOMIC CIRCUMSTANCES UNDERLYING THE COMMON ORGANIZATION OF THE MARKET IN MILK AND MILK PRODUCTS AND CANNOT THEREFORE BE REGARDED AS DISCRIMINATORY .

21 AS ITS THIRD SUBMISSION THE APPLICANT CONTENDS THAT THE REGULATIONS IN QUESTION HAVE INFRINGED ITS RIGHT TO PROPERTY AND ITS RIGHT TO CARRY ON AN ESTABLISHED BUSINESS . THE LATTER RIGHT , WHICH IS RECOGNIZED IN PARTICULAR BY GERMAN LAW , IS , LIKE THE RIGHT TO PROPERTY OF WHICH IT IS A COROLLARY , ONE OF THE FUNDAMENTAL RIGHTS GUARANTEED BY THE COMMUNITY LEGAL ORDER . IN THEIR SUBSTANCE OR SCOPE THOSE TWO RIGHTS FORM ABSOLUTE LIMITS ON THE ACTION OF COMMUNITY INSTITUTIONS . THE MEASURES ADOPTED BY THE COMMISSION AMOUNT TO UNLAWFUL EXPROPRIATION BECAUSE THEY REDUCE THE PROFITABILITY OF ITS BUSINESS TO SUCH AN EXTENT AS TO PLACE ITS VERY EXISTENCE IN JEOPARDY .

22 THAT ARGUMENT CANNOT BE ACCEPTED . THE MEASURES ADOPTED BY THE COMMISSION DO NOT DEPRIVE THE APPLICANT OF ITS PROPERTY OR OF THE FREEDOM TO USE IT AND THEREFORE DO NOT ENCROACH ON THE SUBSTANCE OF THOSE RIGHTS . EVEN THOUGH THOSE MEASURES MAY , AS THE APPLICANT MAINTAINS , HAVE A DETRIMENTAL EFFECT ON SALES OF ITS PRODUCTS , THAT NEGATIVE EFFECT CANNOT BE REGARDED AS AN INFRINGEMENT OF THE SUBSTANCE OF THOSE RIGHTS , PARTICULARLY WHERE , AS IN THIS CASE , THE DETRIMENTAL EFFECT IS MERELY AN INDIRECT CONSEQUENCE OF A POLICY WITH WHICH AIMS OF GENERAL PUBLIC INTEREST ARE PURSUED WHICH VARY GREATLY , DEPENDING ON THE ECONOMIC FACTORS AFFECTING MARKET TRENDS AND ON THE GENERAL DIRCETION OF THE COMMON AGRICULTURAL POLICY .

23 IN THIS REGARD IT MUST BE EMPHASIZED , AS THE COURT HAS ALREADY STATED IN PARTICULAR IN ITS JUDGMENT OF 27 SEPTEMBER 1979 IN CASE 230/78 , SPA ERIDANIA - ZUCCHERIFICI NAZIONALI AND ANOTHER V MINISTER FOR AGRICULTURE AND FORESTRY AND OTHERS , ( 1979 ) ECR 2749 , THAT AN UNDERTAKING CANNOT CLAIM A VESTED RIGHT TO THE MAINTENANCE OF AN ADVANTAGE WHICH IT OBTAINED FROM THE ESTABLISHMENT OF THE COMMON ORGANIZATION OF THE MARKET AND WHICH IT ENJOYED AT A GIVEN TIME .

24 THE APPLICANT ' S FOURTH SUBMISSION , WHICH IS THAT THE MEASURES ADOPTED BY THE COMMISSION CONSTITUTED A BREACH OF THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATION , WAS PUT FORWARD BY THE APPLICANT FOR THE FIRST TIME AT THE HEARING AND THEREFORE CONSTITUTES A FRESH ISSUE WITHIN THE MEANING OF ARTICLE 42 ( 2 ) OF THE RULES OF PROCEDURE . THAT SUBMISSION CANNOT THEREFORE BE CONSIDERED .

25 IT FOLLOWS FROM THE FOREGOING CONSIDERATIONS THAT THE APPLICANT HAS NEITHER ESTABLISHED A SERIOUS BREACH OF A SUPERIOR RULE OF LAW FOR THE PROTECTION OF THE INDIVIDUAL NOR SHOWN THAT THE REGULATIONS AT ISSUE ARE IN ANY RESPECT UNLAWFUL .

26 THE CLAIM THAT THE COMMUNITY IS LIABLE FOR AN UNLAWFUL ACT MUST THEREFORE BE DISMISSED .

LIABILITY IN THE ABSENCE OF ILLEGALITY

27 TO SUPPORT ITS ALTERNATIVE CLAIM THE APPLICANT RELIES ON THE GERMAN LAW CONCEPT OF ' ' SONDEROPFER ' ' ( SPECIAL SACRIFICE ) AND THE FRENCH LAW CONCEPT OF ' ' RUPTURE DE L ' EGALITE DEVANT LES CHARGES PUBLIQUES ' ' ( UNEQUAL DISCHARGE OF PUBLIC BURDENS ); IT CONTENDS THAT , EVEN IN THE ABSENCE OF ANY ILLEGALITY , THE COMMUNITY IS NEVERTHELESS LIABLE , UNDER THE SECOND PARAPRAPH OF ARTICLE 215 OF THE EEC TREATY , TO MAKE GOOD ANY LOSS OF PROPERTY WHICH AN INDIVIDUAL SUFFERS IN CONSEQUENCE OF GENERAL MEASURES WHICH ARE LAWFUL IN THEMSELVES IF HE IS PARTICULARLY AFFECTED AND HARMED BY THEM , NAMELY IF HE IS AFFECTED IN A DIFFERENT WAY AND MUCH MORE SERIOUSLY THAN ALL OTHER TRADERS AND PRODUCERS .

28 IN THIS REGARD IT NEED ONLY BE OBSERVED THAT THE COURT HAS HELD IN A CONSISTENT LINE OF DECISIONS THAT AN ACTION FOR DAMAGES BROUGHT UNDER ARTICLE 215 OF THE TREATY FOR UNLAWFUL LEGISLATIVE ACTION CANNOT SUCCEED UNLESS THE DAMAGE ALLEGED BY THE APPLICANT EXCEEDS THE LIMITS OF THE ECONOMIC RISKS INHERENT IN OPERATING IN THE SECTOR CONCERNED . THAT PRINCIPLE WOULD HAVE TO BE APPLIED A FORTIORI IF THE CONCEPT OF LIABILITY WITHOUT FAULT WERE ACCEPTED IN COMMUNITY LAW . IN THIS CASE THOSE LIMITS WERE NOT EXCEEDED SINCE THE APPLICANT OUGHT TO HAVE ANTICIPATED WHEN MARKETING ITS PRODUCTS IN 1978 AND 1980 THAT REGULATIONS NOS 368/77 AND 443/77 , WHICH WERE SUSPENDED ONLY TEMPORARILY AND WHICH ORIGINALLY DID NOT CONTAIN ANY MECHANISM FOR PREVENTING SKIMMED-MILK POWDER SOLD UNDER THEM FROM BEING USED FOR FEEDING PIGLETS , WHICH IS NOT THE CASE NOW , WOULD BE BROUGHT BACK INTO FORCE IF THE CIRCUMSTANCES WHICH EXISTED AT THE TIME OF THEIR ADOPTION WERE LATER TO RE-OCCUR . WHEN IT WAS ESTABLISHED IN 1974 THE APPLICANT ALSO OUGHT TO HAVE ANTICIPATED , OR AT ANY RATE COULD HAVE ANTICIPATED , THAT SPECIAL MEASURES WOULD BE ADOPTED UNDER THE SECOND SUBPARAGRAPH OF ARTICLE 7 ( 2 ) OF REGULATION NO 804/68 IN ORDER TO DISPOSE OF SKIMMED-MILK POWDER WHICH COULD NOT BE MARKETED ON NORMAL TERMS DURING A MILK YEAR .

29 THE FORESEEABILITY OF THE RISKS INHERENT IN THE MARKET CONDITIONS AT THE TIME WHEN THE APPLICANT BEGAN TO MANUFACTURE AND MARKET THOSE PRODUCTS EXCLUDES THE POSSIBILIY OF ANY RECOMPENSE FOR THE LOSS OF COMPETITIVENESS WHICH IT HAS SUFFERED . THOSE RISKS FORM PART OF THE ECONOMIC RISKS INHERENT IN THE ACTIVITIES OF AN INDUSTRIAL AND COMMERCIAL UNDERTAKING IN THIS SECTOR , AS DOES THE INCREASE IN ENERGY COSTS WHICH , ON THE APPLICANT ' S EVIDENCE , IS ONE OF THE MAIN CAUSES OF THE CONSIDERABLE INCREASE IN THE PRICE OF ITS PRODUCTS IN THE SPACE OF FOUR YEARS .

30 IT FOLLOWS FROM THE FOREGOING CONSIDERATAIONS THAT THE ALTERNATIVE CLAIM MUST ALSO BE DISMISSED .

Decision on costs

COSTS

31 ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE PROVIDES THAT THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS .

32 AS THE APPLICANT HAS FAILED IN ITS SUBMISSIONS , IT MUST BE ORDERED TO PAY THE COSTS .

Operative part

ON THOSE GROUNDS ,

THE COURT

HEREBY :

1 . DISMISSES THE ACTION ;

2 . ORDERS THE APPLICANT TO PAY THE COSTS .