Ernst-Otto Flemmer (C-80/99) and Renate Christoffel (C-81/99) v Council of the European Union and Commission of the European Communities, represented by: Bundesanstalt für Landwirtschaft und Ernährung and Marike Leitensdorfer (C-82/99) v Bundesanstalt für Landwirtschaft und Ernährung.

• Jurisdiction: European Union
• Date: 25 January 2001
• Court: Court of Justice (European Union)

Important legal notice

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61999C0080

Opinion of Mr Advocate General Tizzano delivered on 25 January 2001. - Ernst-Otto Flemmer (C-80/99) and Renate Christoffel (C-81/99) v Council of the European Union and Commission of the European Communities, represented by: Bundesanstalt für Landwirtschaft und Ernährung and Marike Leitensdorfer (C-82/99) v Bundesanstalt für Landwirtschaft und Ernährung. - Reference for a preliminary ruling: Verwaltungsgericht Frankfurt am Main - Germany. - Non-contractual liability - Milk producers - Non-marketing undertaking - Exclusion from milk quota scheme - Compensation - Substitution - Flat-rate compensation by contract - Regulation (EEC) No 2187/93 - Relevant jurisdiction - Applicable law. - Joined cases C-80/99, C-81/99 and C-82/99.

European Court reports 2001 Page I-07211

Opinion of the Advocate-General

1. The Verwaltungsgericht (Administrative Court), Frankfurt am Main, Federal Republic of Germany, has referred a number of questions to the Court pursuant to Article 177 of the EC Treaty (now Article 234 EC) for a preliminary ruling on the interpretation of Article 178 and the second paragraph of Article 215 of the EC Treaty (now Article 235 and the second paragraph of Article 288 EC) and of Council Regulation (EEC) No 2187/93 of 22 July 1993 providing for an offer of compensation to certain producers of milk and milk products temporarily prevented from carrying on their trade (hereinafter: Regulation No 2187/93).

Legal background

2. The national proceedings giving rise to this order for reference are part of the well-publicised litigation concerning implementation of the milk quota scheme set up under the common organisation of the markets in milk and milk products. It is appropriate, therefore, to consider briefly the complex EC legislation on the subject.

3. As you will be aware, the existence of surpluses in the market for milk products led the Council to adopt Regulation (EEC) No 1078/77 of 17 May 1977 introducing a system of premiums for the non-marketing of milk and milk products and for the conversion of dairy herds. The Regulation provided for payment of a premium to producers who undertook not to market milk or milk products from their holdings for a period of five years.

4. However, those measures soon proved unsuitable for dealing with production surpluses, leading the Council to introduce the scheme known as the additional levy: firstly with Council Regulation (EEC) No 856/84 of 31 March 1984 amending Regulation (EEC) No 804/68 on the common organisation of the market in milk and milk products, and, subsequently, with Regulation (EEC) No 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in Article 5c of Regulation No 804/68 in the milk and milk products sector. The levy was payable by each producer for quantities of milk marketed which exceeded the quota allocated to him (reference quantity), the quota being equivalent to the amount produced by each producer during the course of a reference year, which for Germany was 1983. Producers who had not transferred milk during the reference year, in accordance with a non-marketing undertaking under Regulation No 1078/77, were excluded from the system of quotas.

5. In its judgments in Mulder and von Deetzen of 28 April 1988 the Court ruled that Regulation No 857/84 was invalid in so far as it did not provide for the allocation of a reference quantity to that category of producers, because it breached the principle of legitimate expectations.

6. To comply with those judgments, the Council accordingly adopted Regulation (EEC) No 764/89 of 20 March 1989 amending Regulation No 857/84 adopting general rules for the application of the levy referred to in Article 5c of Regulation No 804/68 in the milk and milk products sector. In particular, it inserted in that Regulation a new Article 3a which allowed milk producers who had not delivered milk during the reference year, on the basis of undertakings given under Regulation No 1078/77, to obtain a specific temporary reference quantity equal to 60% of the quantity of milk sold by the producer during the twelve months preceding the registration of the application for a non-marketing premium (the SLOM I system).

7. However, that regulation was also axed by the Court of Justice: in its judgments of 11 December 1990 in Spagl and Pastätter, the Court annulled the Regulation (once again) for failing to observe the principle of legitimate expectations, because it limited the specific reference quantity to only 60% of the quantity of milk delivered or 60% of the quantity of milk sold by the producer during the twelve-month period preceding registration of the application for a non-marketing or conversion premium.

8. In the light of that case-law the Council, in Regulation (EEC) No 1639/91 of 13 June 1991 amending Regulation No 857/84 adopting general rules for the application of the levy referred to in Article 5c of Regulation No 804/68 in the milk and milk products sector, once again amended Article 3a to allow a specific reference quota to be allocated also to producers who had previously been excluded (the SLOM II system).

9. The Court of Justice then intervened in this complex legislation, ruling, on 19 May 1992 in the second Mulder case, that the Community was liable for loss caused to those milk producers who, by reason of the application of Regulation No 857/84 had been excluded from the allocation of a reference quantity because, in carrying out an undertaking given under Regulation No 1078/77, they had not delivered milk during the reference year taken into consideration by the Member State concerned. The Court held that any producer who had been prevented from selling milk solely on the basis of his undertaking concerning non-marketing or reconversion was, as a rule, entitled to compensation for damages.

10. The complexity of the issue and the large number of producers affected by that judgment led the Council and the Commission to publish Communication 92/C 198/04. They announced their intention of adopting practical compensation criteria for producers affected and undertook, until the criteria were adopted, not to invoke expiry of the period of limitation pursuant to Article 43 of the EC Statute of the Court against producers entitled to compensation. This, however, was on condition that that entitlement was not already time-barred on the date of publication of the Communication or the date when the producer had applied to one of the two institutions.

11. Acting on that Communication and, in particular, in order to give effect to the judgment in Mulder II and to meet the specific requirement on the EC to compensate the loss suffered by producers of milk or milk products in the situations described above, the Council shortly afterwards adopted Regulation No 2187/93. In particular, it set up a proper system of flat-rate compensation which is described below.

12. It provides, firstly, that producers affected should present an application for compensation, in accordance with the criteria set out in Articles 2 to 5 of the Regulation, to the authority designated by each Member State pursuant to Article 10.

The tenth recital of the Regulation states that, the competent authorities of the Member States shall act, on behalf of the Community and the Commission by virtue of a mandate, which has to do only with the execution, in compliance with the provisions of this Regulation, of the administrative tasks necessary for its implementation.

Article 6 provides that the national authority is to determine the annual quantity in respect of which compensation is due; that authority, under Article 11, is to check the accuracy of the information provided by the producer and is to calculate the amount of the compensation on the basis of the quantity and the period in respect of which compensation is due, using the amounts specified in the Annex.

Under Article 14,

Within four months of receipt of an application the competent authority referred to in Article 10 shall, in the name and on behalf of the Council and the Commission, make an offer of compensation to the producer, accompanied by a receipt in full and final settlement.

...

Failure to accept the offer within two months of its receipt shall mean that it shall not be binding in the future on the Community institutions concerned.

Acceptance of the offer by the return to the competent authority of the duly approved and signed receipt shall imply the relinquishment of any claim of whatever nature against Community institutions in respect of any loss within the meaning of Article 1.

The financing of the payments made pursuant to the Regulation is deemed, under Article 16, to be intervention within the meaning of Article 3 of Council Regulation (EEC) No 729/70 of 21 April 1970 on the financing of the common agricultural policy.

Proceedings before the national court

13. The national proceedings giving rise to this case arose against the background of the scheme described above. Three sets of proceedings were brought before the Verwaltungsgericht, Frankfurt am Main, by a number of milk producers who had received and promptly accepted an offer of compensation from the Bundesanstalt für Landwirtschaft und Ernährung (hereinafter: the BLE) in the name and on behalf of the Council and the Commission in accordance with Regulation No 2187/93. Despite that offer, they were then refused payment of the amount agreed, in whole or in part, because the BLE, when subsequently reviewing entitlement to compensation, concluded that in these cases not all the conditions set out in the Regulation were met.

14. More specifically, the BLE held in Flemmer (C-80/99) and Leitensdorfer (C-82/99) that the definitive special reference quantity had been wrongly allocated from the outset.

The BLE held, in the first case, that the conditions under Article 3a of Regulation 857/84...