The CJEU today held in Case C-572/14 Austro Mechana. I reported earlier on the AG’s Opinion (which was issued not too long ago). That post also refers readers to Tobias Lutzi‘s analysis. He points quite correctly (indeed entirely correctly) to the issue of dovetail between (now) Article 7(1) and 7(2). Given the interplay between Handte and Kalfelis, is an obligation between parties which is not contractual, necessarily one in tort? I.e. do these two dovetail? Following Kalfelis itself, the answer must be no: an action falls under Art. 7(2) if it ‘seeks to establish the liability of a defendant’ and is ‘not related to a “contract” within the meaning of Article 5(1)’ (para 56). Therefore one must seek to establish the liability of the defendant, and not just review whether the claim is contractual or not.
In the case of collection of copyright levies for private use (where consent of the copyright holder is not sought and a compensatory levy is imposed by national law instead, in accordance with relevant instructions in EU copyright law), one would intuitively say that no ‘liability’ is established against the distributor of copyrighted materials to whom effectively collection of a State-imposed duty is outsourced.
In the present case, the action brought by Austro-Mechana seeks to obtain compensation for the harm arising from non-payment by Amazon of the remuneration provided for in Austrian law. That failure to collect , the Court holds (at 44) constitutes a harmful event within the meaning of Article 7(2). At 50: ‘Austro-Mechana’s claim seeks to establish the liability of the defendant, since that claim is based on an infringement by Amazon of the provisions of the UrhG imposing that obligation on it, and that that infringement is an unlawful act causing harm to Austro-Mechana.’
The Court therefore does not dismiss the first criterion of the Kalfelis formula (‘establishing liability’). Yet it surely stretches it. The Court’s initial formulation of a two-pronged condition of application, therefore has not disappeared. However if the criterion of establishing liability is too readily accepted, the relevance of the initial formulation is certainly fading.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 184.108.40.206.
Determining whether a legal relationship is one in tort, for the purposes of (now) Article 7(2) of the Brussels I Recast Regulation, is in principle subject to autonomous interpretation. National law ought not to feature (emphasised ia in Melzer). In the Brussels I Regulation, Article 5(3) features alongside Article 5(1)’s jurisdictional rule for contract. (In the Recast Regulation, Artt 7(1 and (2)). Sometimes, as in Brogsitter, both are present between two contractual parties and one needs to be separated from the other. In Kalfelis, the CJEU defined ‘tort’ as ‘all actions which seek to establish the liability of a defendant and which are not related to a “contract” within the meaning of Article 5(1).‘
Tobias Lutzi’s review is very useful in reminding us of the need to distinguish the two tracts of the Kalfelis definition. Just focusing on Brogsitter might lead one into thinking that Article 5(1) and 5(3) [7(1) /7(2)] ‘dovetail’: i.e. if it is not the one, it is the other (with tort being the subordinate category). That is however clearly not the case: that it may have looked like this in Brogsitter is due to liability being present in any case: the issue was there where contractual liability stops and liability in tort takes over.
Article 5(3) therefore requires an ‘action which seeks to establish the liability of a defendant’ which leads the Advocate General here into lengthy review of the Austrian implementation of EU law on copyright levies. With respect, I do not think that is what is either called for or justified. Article 5(3) requires an autonomous, EU interpretation. Too much interference of national law spoils that broth – a point also made in Melzer. Moreover the application of the jurisdictional categories is just that: it determines jurisdiction only. Once that settled, the national courts regain their authority to requalify and indeed may still decide that there is no liability in tort (or contract, as the case may be) at all, but rather one in contract (or tort, as the case may be) or indeed none at all.
I feel Sharpston AG’s centre of gravity etc. modus operandi, suggested by her re distinguishing between Rome I and II in Ergo but (probably) not accepted by the Court, would have come in handy at the jurisdictional level in Austro Mechana, too.
The CJEU’s judgment here is one to look out for.
European private international law, second ed. 2016, Chapter 2, Heading 220.127.116.11