Sánchez-Bordona AG in Volkswagen. The locus damni engine is clearly revving. Locus delicti commissi in my view left underdiscussed.

Update 8 June 2020 Matthias Lehmann flags a challenging court ruling in Germany here, which not only, as Matthias points out, is questionable from a Rome II point of view but it would seem to me, also challengeable from an EFTA free movement of services angle.

Sánchez-Bordona AG issued his opinion in C‑343/19 Verein für Konsumenteninformation v Volkswagen last Thursday. He relies heavily of course on CJEU authority almost all of which is reviewed on the blog – with Tibor Trans making a star appearance given its recent nature as well as its focus, like in Volkswagen, on financial damage.

Not long after, yesterday, the High Court in England in [2020] EWHC 783 (QB) held on a first preliminary issue in the class action suit pending there. Matthias Weller has already reviewed that judgment here and Matthias Lehmann adds a slightly different focus (on mutual recognition of administrative decisions) here. In that judgment, a lex causae argument on the binding authority of a German public body’s decision was advanced by claimants in subsidiary fashion. This was not entertained by the High Court for it had already found a binding effect on other grounds. Incidentally, the nature and timing of the High Court’s ruling suggest that there is no contestation of jurisdiction being brought forward by Volkswagen – I am enquiring with counsel in the case. Update 10 April 2020 VW are indeed not constesting jurisdiction in the UK.

Returning to CJEU C-343/19, though: Raphael de Barros Fritz has analysis here and I am happy to refer, for timing for the release of my own ponderings on the Opinion suffered from a Friday afternoon call on injunctive relief and jurisdiction. A few additional notes of interest and subject to further pondering:

Firstly, the AG is too kind when he suggests that the Brussels Convention had left open the (now) Article 7(2) question. The Court’s locus damni /locus delicti commissi distinction was not at all required by then Article 5(3). Much as the distinction may have been clear to make in the Bier case itself, it was not at all advanced by the text of the Brussels Convention. Many of us have been pointing out the fallacy, including Cruz Villalon AG in his Opinion in Pez Hejduk, case C-441/13 which I reviewed here and Szpunar AG in his Opinion in Universal Music reviewed here. As Sánchez-Bordona AG points out in Volkswagen, the distinction has become a paradigm (at 2); ‘obstinance’ might also be a good word for it. The result of the CJEU refusing formally to reverse its Bier distinction, means itself and the national courts have been having to conjure up all sorts of distinguishing to respect both the Handlungsort /Erfolgort distinction, and the predictability of Brussels Ia as well as the need to interpret special jurisdictional rules restrictively.

Raphael makes a most valiant effort to do justice to the AG’s attempt at systemisation, yet the reality remains that most certainly on the locus damni front, the ever unclearer distinction between direct and indirect aka ‘ricochet’ damage is a Valhalla for reverse engineering – and we have not even thrown Lazar into the mix.

The AG suggests that not only the first purchasers of the vehicle may be direct victims, but also downstream purchasers of second-hand vehicles, however in each case constrained (if I understand the Opinion properly) to those purchasers, first or not, where the loss of value of the vehicles did not become a reality until the manipulation of the engines was made public: at 41; ‘ The loss of value of the vehicles did not become a reality until the manipulation of the engines was made public. In some instances, the applicants may be end users who obtained the vehicle from another, previous buyer; however, the latter did not experience any loss because, at that time, the damage was latent and was not disclosed until later when it affected the then owner. Therefore, it is not possible to describe the damage as being passed on from the original buyers to successive buyers.’

Further, given that the location of the vehicle is unforeseeable, the Advocate General considers that the place where the damage occurred is the place where that transaction was concluded, pursuant to which the product became part of the assets of the person concerned and caused the damage. However even for these cases other elements (per Universal Music) will have to be shown to avoid forum shopping and for these other elements, the AG suggests in particular a minimum contacts rule such as in US conflict of laws: at 75: ‘the defendant’s intention to sell its vehicles in the Member State whose jurisdiction is in issue (and, as far as possible, in certain districts within that State).’

On locus delicti commissi, the AG suggests at 34 that the event giving rise to the damage in this case consists of the installation, during the vehicle manufacturing process, of software which alters the vehicle’s emissions data. I do not think that is the only possible Handlungsort: other events in the Dieselgate chain arguably may qualify as Handlungsort, too: the executive decision to go ahead with the program, for instance. Or the regulatory steps (including type approval under EU law such as discussed in [2020] EWHC 783 (QB), above; or other steps required under EU or national law) needed to market the product in the country.

The last words on this Opinion have far from been said.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.11.2.7

 

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