Posts Tagged extraterritorial

Forget Facebook and Safe Harbour. CJEU in Weltimmo confirms wide prescriptive but finds limited executive jurisdiction in EU data protection.

A lot of attention last week went to the CJEU’s annulment of the EC’s ‘Safe Harbour’ decision in Schrems v Facebook  (aka Austrian student takes on internet giant). I will not detail that finding for I assume, for once, that readers will be au fait with that judgment. For those who are not: please refer to Steve Peers for excellent analysis as per usual. It is noteworthy though that the CJEU’s finding in Schrems is based in the main on a finding of ultra vires: often easily remedied, as those with a background in public law will know.

Schrems (held 6 October) confirmed the Court’s approach to the EU’s prescriptive jurisdiction in data protection laws, as in Google Spain. However the Thursday before, on 1 October, the Court took a more restrictive view on ‘executive’ or ‘enforcement’ jurisdiction in Case C-230/14 Weltimmo. Lorna Woods has the general context and findings over at EU Law analysis. The essence in my view is that the Court insists on internal limitations to enforcement. It discussed the scope of national supervisory authority’s power in the context of Directive 95/4, the same directive which was at issue in Google Spain. The Court held

Where the supervisory authority of a Member State, to which complaints have been submitted in accordance with Article 28(4) of Directive 95/46, reaches the conclusion that the law applicable to the processing of the personal data concerned is not the law of that Member State, but the law of another Member State, Article 28(1), (3) and (6) of that directive must be interpreted as meaning that that supervisory authority will be able to exercise the effective powers of intervention conferred on it in accordance with Article 28(3) of that directive only within the territory of its own Member State. Accordingly, it cannot impose penalties on the basis of the law of that Member State on the controller with respect to the processing of those data who is not established in that territory, but should, in accordance with Article 28(6) of that directive, request the supervisory authority within the Member State whose law is applicable to act.

In other words, the supervisory authority in a Member State can examine the complaints it receives even if the law that applies to the data processing is the law of another Member State. However the scope of its sanctioning power is limited by its national borders.

This finding (I appreciate there are caveats) has important implications for the discussion on the territorial reach of the so-called ‘righ to be forgotten’. It supports in my view, the argument that the EU cannot extend its right to be forgotten rule to websites outside the EU’s domain. I have a paper forthcoming which discusses the various jurisdictional issues at stake here and the impact of Weltimmo on same.

Geert.

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‘Extraterritorial’ application of EU cosmetics Regulation’s ban on animal testing. High Court refers to the ECJ.

Update 17 March 2016 Bobek AG Opined today.

The EU’s cosmetics Regulation prohibits the placing on the market of products tested on laboratory animals. Application of the (criminally enforced) UK implementing regulations, raised questions on the precise scope of the Regulation’s provisions which are aimed at preventing the simple circumvention of the Regulation via production abroad. (Rosalind English has excellent review here). The case at issue concerns the question whether products may incorporate ingredients tested outside the EU, where this testing has been carried out with a view to meeting the product regulation requirements of third States. It is known at the CJEU as Case C-592/14.

The room for circumvention of the EU regime is obvious. The limits to the EU’s territorial reach likewise. International trade law is not at issue in the case however it is clear that the eventual ECJ ruling will feed into WTO et al discussions on so-called ‘non-product incorporated production processes and -methods’.

Similar discussions were at issue in Zuchtvieh-Export, Case C-424/13, on the application of EU rules with respect to animal welfare to transport taking place outside of the EU.

Geert.

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Al Shimari v. CACI: An ATS case found to touch and concern the US with sufficient force.

Regular or indeed occasional readers of the blog will have been following developments in US case-law since SCOTUS issued its ruling in Kiobel. In Al Shimari v. Caci, the fourth circuit Court of Appeal held in early July that plaintiffs’ claims “touch and concern” the territory of the United States with sufficient force to displace the presumption against extraterritorial application of the Alien Tort Statute: that is the test which SCOTUS set in Kiobel.

Due to a shortage of trained military interrogators, the US hired civilian contractors to interrogate detainees at Abu Ghraib, Iraq – context will be known to readers. During the time period relevant to the civil action, those private interrogators were provided exclusively by CACI Premier Technology, Inc. (CACI), a corporation domiciled in the US. Plaintiffs in the case are foreign nationals who allege that they were tortured and otherwise mistreated by American civilian and military personnel while detained at Abu Ghraib. Plaintiffs allege that CACI employees “instigated, directed, participated in, encouraged, and aided and abetted conduct towards detainees that clearly violated the Geneva Conventions, the Army Field Manual, and the laws of the United States.”

The Court of Appeal noted among many things that SCOTUS in Kiobel broadly stated that the “claims,” rather than the alleged tortious conduct, must touch and concern United States territory with sufficient force, suggesting in the view of the CA that courts must consider all the facts that give rise to ATS claims, including the parties’ identities and their relationship to the causes of action. It found that the claims do concern US territory, pointing to the fact that:

the plaintiffs’ claims allege acts of torture committed by United States citizens who were employed by an American corporation, CACI, which has corporate headquarters located in Fairfax County, Virginia. The alleged torture occurred at a military facility operated by United States government personnel.

In addition, the employees who allegedly participated in the acts of torture were hired by CACI in the United States to fulfill the terms of a contract that CACI executed with the United States Department of the Interior. The contract between CACI and the Department of the Interior was issued by a government office in Arizona, and CACI was authorized to collect payments by mailing invoices to government accounting offices in Colorado. Under the terms of the contract, CACI interrogators were required to obtain security clearances from the UnitedStates Department of Defense. Finally, the allegations are not confined to the assertion that CACI’s employees participated directly in acts of torture committed at the Abu Ghraib prison. The plaintiffs also allege that CACI’s managers located in the United States were aware of reports of misconduct abroad, attempted to “cover up” the misconduct, and “implicitly, if not expressly, encouraged” it.

(The case nb is not home and dry: whether the claims present non-justiciable political questions still needs to be determined by the district court).

Many out there must be writing PhDs on related issues: a moving target indeed!

Geert.

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Rolex v Blomqvist. ECJ confirms irrelevance of ‘focus and target’ or ‘direction’ in intellectual property cases.

After its withholding of mere accessibility of a site as a jurisdictional trigger for copyright infringement in Pinckney, the ECJ has now accepted that the mere acquisition of a good by a person domiciled in an EU Member State, suffices to trigger the application of the EU Customs Regulation’s provisions on counterfeit and pirated goods. It is not necessary, in addition, for the goods at issue to have been the subject, prior to the sale, of an offer for sale or advertising targeting consumers of that State.

In Case C-98/13 Martin Blomqvist v Rolex Mr Blomqvist, a resident of Denmark, ordered a watch described as a Rolex from a Chinese on-line shop. The order was placed and paid for through the English website of the seller. The seller sent the watch from Hong Kong by post. The parcel was inspected by the customs authorities on arrival in Denmark. They suspended the customs clearance of the watch, suspecting that it was a counterfeit version of the original Rolex watch and that there had been a breach of copyright over the model concerned. In accordance with the procedure laid down by the customs regulation, Rolex then requested the continued suspension of customs clearance, having established that the watch was in fact counterfeit, and asked Mr Blomqvist to consent to the destruction of the watch by the customs authorities. Mr Blomqvist refused to consent to the destruction of the watch, contending that he had purchased it legally. Is there in the present case any distribution to the public, within the meaning of the copyright directive, and any use in the course of trade, within the meaning of the trade mark directive and the trade mark regulation?

The ECJ re-iterated earlier case-law (in particular L’Oreal /E-bay) that the mere fact that a website is accessible from the territory covered by the trade mark is not a sufficient basis for concluding that the offers for sale displayed there are targeted at consumers in the EU. However proof that the goods are intended to be put on sale in the European Union, is being provided, inter alia, where it turns out that the goods have been sold to a customer in the European Union, such as clearly in the case at issue.

That sales to the EU have taken place is enough. Proof that EU consumers were actually targeted is not required – at least not with a view to triggering intellectual property protection (cf consumer protection under i.a. the jurisdiction Regulation).

In the view of the EU of course this is not an ‘extraterritorial’ application of EU law: the territorial link is firmly established through the customer’s domicile.

Geert.

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Schmid v Hertel: ECJ confirms ‘extraterritorial’ reach of insolvency Regulation’s Seagon extension – Actio Pauliana

(Postscript April 2015: The ECJ confirmed these principles in C-295/13, H v HK).

Less is more, I know – Apologies for the long title and thank you to Matthias Storme for highlighting the case. In Case C-328/12 Ralph Schmid v Lilly Hertel, Schmid was the German liquidator of the debtor’s assets, appointed in the insolvency proceedings opened in her regard in Germany on 4 May 2007. The defendant, Ms Hertel, resides in Switzerland. Mr Schmid brought an action against Ms Hertel before the German courts to have a transaction set aside, seeking to recover EUR 8 015.08 plus interest as part of the debtor’s estate.

In Case C-339/07 Seagon the ECJ had ruled that the courts of the Member State within the territory of which insolvency proceedings have been opened have jurisdiction to decide an action to set a transaction aside (actio pauliana) that is brought against a person whose registered office is in another Member State. However does Seagon also apply where insolvency proceedings have been opened in a Member State, but the place of residence or registered office of the person against whom the action to have a transaction set aside is brought is not in a Member State, but in a third country?

The ECJ held that it does. Bob Wessels has a very good analysis here and I am happy to refer. Let me just add one or two things. The Brussels I Regulation, the overall Regulation on jurisdiction on civil and commercial matters, displays bias in favour of the defendant: actor sequitur forum rei. The overall jurisdictional angle of the Insolvency Regulation is different: avoiding forum shopping to the detriment of creditors is its main aim, and its insistence on verifiable and predictable criteria to determine COMI (which in turns determines jurisdiction) needs to be seen in that light. That non-EU domiciled defendants get caught up in EU proceedings on the basis of COMI is not generally seen as problematic within the context of the Regulation.

The ECJ is rather realistic with respect to the potential recognition and enforcement problems associated with judgments under the Regulation held against non-domicileds. In the absence of assets in the EU held by the non-dom (if there were, enforcement would be straightforward), classic bilateral treaties may come to the rescue and if there is no such treaty, so be it: the Regulation’s jurisdictional rules should not be held up by potential problems end of pipe.

An important judgment for the reach of the Insolvency Regulation.

Geert.

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Where are all the dead pigeons? Proposed amendment to the Brussels I-Regulation prepares the ground for the Unified Patent Court

Pre-script posted 6 June: the amending Regulation was adopted in April (and published as Regulation 542/2014). The assets rule which it includes prima facie only applies for damage taking place outside the EU resulting from non-doms’ infringement. How and whether the assets rule applies vis-a-vis damage inside the EU caused by non-doms is still not clear. You may want to read the ‘comments’ section under this posting for clarification.

 

The proposal to amend Regulation 1215/2012 is due to be adopted by the European Parliament before its election recess. It forms part of the rather complex set of arrangements to introduce the Unified Patents Court – an oxymoron indeed. Leaving aside the complex set of arrangements at the substantive law level, I just wanted to highlight one or two interesting charachteristics at the pure conflicts /jurisdiction level.

The proposed amendment has a twofold objective. Firstly, to ensure compliance between the UPC Agreement and the recast Brussels I Regulation. So far so uncontested. These revisions concern in particular the clear inclusion of the UPC (as well as the Benelux Court) within the Regulation’s definition of a ‘court’; and the revision of the (rather complex)  regime of Article 71 with respect to international agreements and their relationship with the Brussels I Regulation.

The second objective however is misleadingly represented as necessarily forming part of the UPC package: the issue of jurisdiction vis-a-vis defendants not domiciled in the EU (see inter alia here for earlier postings on non-EU domiciled defendants). The newly inserted Article 71b essentially and as a rule lets the ‘common courts’ (i.e. the UPC and the Benelux Court) usurp national jurisdiction (for those States that have subscribed to the common court – remember this is an instrument of enhanced co-operation):

1. The common court shall have jurisdiction where, under this Regulation, the courts of a Member State party to an agreement establishing a common court have jurisdiction in a matter governed by that agreement.

It then prima facie at least suggests that all jurisdictional rules of the Regulation apply regardless of third State domicile:

2. Where the defendant is not domiciled in a Member State, and this Regulation does not otherwise confer jurisdiction over him, the provisions of Chapter II shall apply as if the defendant was domiciled in a Member State. Article 35 shall apply even if the courts of non-Member States have jurisdiction as to the substance of the matter.

Chapter II includes all jurisdictional rules: including the basic rule of domicile of the defendant (the new Article 4, previously Article 2).

This prima facie conclusion is supported by the (proposed) newly inserted sentence in recital 14:

“Uniform jurisdiction rules should also apply regardless of the defendant’s domicile in cases where courts common to several Member States exercise jurisdiction in matters coming within the scope of application of this Regulation”

The newly proposed Article 71b (3) however then would seem to contradict this by stating

3. Where the defendant is not domiciled in a Member State and no court of a Member State has jurisdiction under this Regulation, the defendant may be sued in the common court if:
a) property belonging to the defendant is located in a Member State party to the agreement establishing the common court;
b) the value of the property is not insignificant compared to the value of the claim;
c) the dispute has a sufficient connection with any Member State party to the agreement establishing the common court.

Now I am getting very confused: if, per Article 71b (2), jurisdiction shall be determined ‘as if the defendant was domiciled in a Member State’, how then can there still be a calling for Article 71b (3)? Is it because the proposal aims to introduce a reflexive application (meaning one which also works where the exclusive jurisdictional ground points away from the EU) of Article 22(4) [Article 24(4) in the new Regulation] – i.e. the exclusive jurisdictional ground for registration or validity of intellectual property rights?

Interestingly, Article 71b(3) (proposed) reinstates, for the common courts and whence for patent disputes only, the ‘assets’ rule vis-a-vis third State defendants which the European Commission had failed to introduce as a general rule in the recast Regulation (these are the dead pigeons of the title of current posting).

It is also noteworthy that the proposal acknowledges that courts in third States may have jurisdiction, and that in that case EU (common) courts may still issue provisional measures.

No doubt there may be some kind of explanation for my confusion. I should be glad to hear it.

Geert.

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Let them stop eating pollution – The European ban on beaching of EU ships

When teaching International Environmental Law, I tend to at some point in the proceedings have the students ponder Lawrence Summers’ 1992 ‘Let them eat pollution‘ memo. It is a document most wonderful to teach basic economics, internalisation (or lack thereof) of externalities, morality in international trade, comparative advantage etc etc. As well as some history (remember Marie Antoinette, anyone?) and the myths surrounding quotes (qu’ils mangent de la brioche).

The EU have recently decided no longer to let developing countries recycle EU-registered ships through ‘beaching’: basically, one towes a discarded ship, typically with plenty of toxic substances on board or integrated in the ship’s build, unto a beach in a developing country, where subsequently the ship is dismantled without much regard to environmental control of occupational health and safety issues.

The long struggle to regulate the trade is a good example of the challenges of positive harmonisation in international environmental law. For instance, the definition of ‘waste’ as applied to a disused ship long differed between the EU (waste as soon as it is no longer used for its original purpose), the International maritime organisation (no waste as long as it can float) and the Basel Convention (reference to ‘discard’ and to national law). The 2009 Hong Kong Convention aims to address the challenges. This Convention has now been implemented by the EU, who have reportedly ‘gold plated’ it: i.e. the EU have gone beyond what is required under the Convention.

Some details of the scheme may be found here (Irish Presidency of the EU) – the text itself is not yet available. The regime uses a core element of the regime of the Basel Convention on the transboundary shipments of hazardous wastes and their disposal: i.e. employ export authorities in the ‘developed’ world, to only allow exports to ‘developing’ countries when conditions in the latter are deemed sufficiently safe from the workers’ and the environment’s point of view. In the case of the ship recycling regime, this is done by only allowing export of EU-flagged waste ships if they are to be dismantled in facilities that have been approved by the EU.

Plenty of complications remain: this includes the compatibility of the regime with the Basel Convention, and with international trade law; the problem of enforcement and inspection; and the possibility of circumvention by switching flag state.

Geert. Postscript July 2014: the Regulation was eventually adopted as Regulation 1257/2013.

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