ORDER OF THE COURT OF FIRST INSTANCE (Second Chamber) 12 November 1996 *

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1 ORDER OF THE COURT OF FIRST INSTANCE (Second Chamber) 12 November 1996 * In Case T-47/96, Syndicat Départemental de Défense du Droit des Agriculteurs (SDDDA), a farmers' union governed by French law, having its seat at Beaucaire, France, represented initially by Olivier Girard, of the Nîmes Bar, and subsequently by Maryse Joissains-Masini, of the Aix-en-Provence Bar, applicant, v Commission of the European Communities, represented by Denise Sorasio, Legal Adviser, acting as Agent, with an address for service in Luxembourg at the office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg, defendant, APPLICATION under Article 175 of the EC Treaty for a declaration that, by not initiating the procedure provided for in Article 169 of the EC Treaty against the French Republic, the Commission has failed to act, * Language of the case: French. II-1561

2 ORDER OF CASE T-47/96 THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Second Chamber), composed of: C. W. Bellamy, President, H. Kirschner and A. Kalogeropoulos, Judges, Registrar: H. Jung, makes the following Order Facts 1 By letter dated 28 August 1995, the Syndicat Départemental de Défense du Droit des Agriculteurs (SDDDA) submitted a complaint to the Commission alleging that the French Republic was in breach of its obligation to transpose properly into national law the provisions of Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC (OJ 1992 L 228, p. 1, 'the third non-life insurance directive') and Council Directive 92/96/EEC of 10 November 1992 on the coordination of laws, regulations and administrative provisions relating to direct life assurance and amending Directives 79/267/EEC and 90/619/EEC (OJ 1992 L 360, p. 1, 'the third life assurance directive'). 2 In its complaint, the applicant argued that those two directives established the principle that all monopolies were to be abolished in the areas which they covered, II-1562

3 thus allowing any person taking out insurance to do so with any insurer or assurer having a head office in the Community. It referred in support to Article 54 of the third non-life insurance directive, under which private or voluntary insurance may serve as a partial or complete alternative to health cover provided by the statutory social security scheme. The applicant claimed that the French authorities systematically refused to apply the two directives, even though they had been transposed into domestic law by Law No 94-5 of 4 January 1994 amending the Insurance Code and by Law No of 8 August 1994 amending the Social Security Code. They had interpreted Article 2(2) of the third non-life insurance directive, from which it was clear that insurance under a statutory social security scheme was not subject to prudential rules governing approval, as meaning that the directives apply only to optional cover supplementing that provided under a compulsory social security scheme. 3 In addition, the applicant claimed that the directives had not been transposed with regard to 'mutuelles' (mutual benefit associations), one of the restricted number of forms which may be adopted by an undertaking established in France in order to carry on an insurance activity, the others being 'sociétés anonymes' (public limited liability companies), 'sociétés d'assurance mutuelles' (mutual insurance companies) and 'institutions de prévoyance' (provident funds). 4 The applicant therefore called on the Commission to 'exercise its powers under Article 169 of the Treaty and issue a reasoned opinion on the serious and clearlyestablished failure by the French State to fulfil its obligations'. 5 By letter dated 29 September 1995, the Commission stated in reply to the applicant that the Community directives concerning indemnity insurance, such as the third non-life insurance directive, were not 'intended to alter the demarcation between private insurance and insurance under statutory social security schemes in each Member State, the way in which the Member States regulate their social security systems, or cover against risks which must fall under a compulsory social security system'. With regard to the scope of the third non-life insurance directive, the Commission stressed that the First Council Directive 73/239/EEC of 24 July 1973 II-1563

4 ORDER OF CASE T-47/96 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance (OJ 1973 L 228, p. 3) clearly excluded from its application 'insurance forming part of a statutory system of social security' and that that exclusion had been confirmed in the third non-life insurance directive, in particular Article 2(2) thereof, which provides that it 'shall apply neither to the types of insurance or operations, nor to undertakings or institutions to which Directive 73/239/EEC does not apply, nor to the bodies referred to in Article 4 of that Directive'. 6 The Commission added that 'since the statutory social security schemes in existence in the Member States are therefore not covered by the Community directives on indemnity insurance, the Member States remain competent, subject to the rules contained in the Treaty on European Union, to regulate such schemes in the way they consider most appropriate and to specify, inter alia, the extent of the cover provided, the classes of person or activity to which the schemes extend or the organization and structure of the social security scheme'. 7 The Commission considered that Article 54 of the third non-life insurance directive had to be interpreted in that context. Article 54 concerns the specific situation pertaining in certain Member States in the area of health cover, where the social security system provides that in certain well-defined cases certain classes of person may obtain health cover from a private insurer rather than from a sickness insurance fund forming part of a compulsory scheme. s With regard to the applicant's contention that the two directives had abolished the monopoly held by sickness insurance funds, the Commission pointed out that whilst under Article 3 of the third non-life insurance directive Member States were II-1564

5 to take every step to ensure that monopolies in respect of the taking-up of the business of certain classes of insurance, granted to bodies established within their territories and referred to in Article 4 of Directive 73/239, were abolished by 1 July 1994, the classes of business referred to were those which did not form part of a statutory social security scheme. In the Commission's view, therefore, the directives did not concern Member States' compulsory statutory social security schemes. 9 Finally, the Commission added, the issue of whether the directives applied to bodies and institutions forming part of a statutory social security scheme was moreover pending before the Court of Justice in the context of a request for a preliminary ruling from a French tribunal (Case C-238/94 Garcia and Others v Mutuelle de Prévoyance Sociale d'aquitaine and Others). io The Commission therefore took the view that, on the basis of those considerations and until such time as the Court of Justice gave a ruling in that case, there was no cause to 'initiate the infringement procedure against France under Article 169 of the EEC Treaty on the ground that it has maintained the compulsory nature of cover against risks falling under its statutory social security scheme'. 1 1 As regards the failure to transpose the directives with regard to 'mutuelles', the Commission informed the applicant that it had already been in touch with the French authorities 'with a view to rectifying the situation and obtaining the necessary amendments to the Code de la Mutualité [the legislation governing "mutuelles"] as soon as possible'. i2 By letter to the Commission dated 24 October 1995, the applicant challenged the Commission's view that the directives did not concern statutory schemes, claiming that such a view was 'at least paradoxical', since Law No , which transposes II-1565

6 ORDER OF CASE T-47/96 the two directives in question for the purposes of the Social Security Code, provides that '"institutions de prévoyance" may henceforth transfer all or part of their portfolios [...] to one or more insurers whose State of origin is a Member of the European Community'. It therefore reiterated its call on the Commission to initiate the infringement procedure against the French Republic under Article 169 of the Treaty.» By letter dated 21 Novejnber 1995, the Commission stated in reply to the applicant that, as indicated in the letter of 29 September 1995, there was no cause to initiate the infringement procedure against France in the absence of any failure on its part to comply with the third non-life insurance directive. Nor, moreover, could such proceedings be initiated until the Court of Justice had ruled in the Garcia case, which concerned the issue of the application of the third non-life insurance directive to compulsory statutory social security schemes in France. u By letter dated 22 January 1996, the applicant informed the Commission: 'Your decision rejecting the complaint set out in detail in our letters of 28 August and 24 October 1995 does not comply with the obligation to state reasons as defined by the Courts of the European Union. You have manifestly failed to give a clear answer to each of the grounds set out in the complaint even though, as you are probably aware, it was incumbent on you to respond on your own initiative to the complaints which we could have raised if the information available to the Commission had been communicated to us. Consequently, in view of the inadequacy of the statement of reasons in your decision rejecting the complaint, many points of which have not been answered, it appears that we shall have to bring an action before the European Courts'. II-1566

7 is By letter dated 27 February 1996, a Director in the Directorate-General for the Internal Market and Financial Services replied to the applicant in the following terms: 'In my previous letters of 29 September and 21 November 1995, I set out the reasons for which the Commission considers that there is no cause to initiate that procedure against France, since in our view Council Directives 92/49/EEC and 92/96/EEC do not concern Member States' compulsory statutory social security schemes and may therefore not be relied on in order to require the abolition of the monopoly on which the compulsory statutory social security scheme is based in France. I also told you that the Commission is waiting for the Court of Justice to give a decision in Case C-238/94, pending before it, which should provide guidance on the scope of those directives, before taking a final decision on whether to initiate an infringement procedure against France in that regard. I can do no more than confirm my previous letters and state that, as soon as the Court of Justice has given its decision in Case C-238/94, the Commission will examine whether the French legislation conferring that monopoly on the bodies responsible for the statutory social security schemes is consistent with Community law and in particular with Council Directives 92/49/EEC and 92/96/EEC'. 16 The applicant accordingly brought the present action by application lodged at the Registry of the Court of First Instance on 28 March i7 By document lodged at the Court Registry on 7 May 1996, the Commission raised an objection to admissibility under Article 114(1) of the Rules of Procedure. The applicant lodged its observations on that objection on 11 June is On 23 August and 18 September 1996 respectively, the French Republic and the Kingdom of Spain sought leave to intervene in support of the Commission. II-1567

8 ORDER OF CASE T-47/96 Forms of order sought i9 The applicant claims that the Court should: uphold the application as justified and well founded; declare that the Commission has failed to act by not responding clearly to the problem of the applicability of Directives 92/49/EEC and 92/96/EEC to the monopoly held by the French statutory social security scheme in the fields of non-life insurance and life assurance; declare the said directives fully applicable; take all necessary measures and in particular order those directives to be transposed into the French Code de la Mutualité; order the Commission to pay the costs. 20 In its objection to admissibility, the Commission contends that the Court should: declare the action inadmissible; order the applicant to pay the costs. II -1568

9 21 In its observations on the objection to admissibility, the applicant claims that the Court should: declare the objection to admissibility unfounded; declare that the Commission has failed to act by not responding clearly to all the complaints set out in particular in the letters of 28 August and 24 October 1995; uphold both these and the previous claims. 22 Under Article 114(3) of the Rules of Procedure, unless the Court of First Instance decides otherwise, the remainder of the proceedings on an objection to admissibility are to be oral. In the present case, the Court (Second Chamber) considers that it has sufficient information from the documents before it and decides that there is no cause to open the oral procedure. Admissibility Arguments of the parties n The Commission makes the preliminary point that the application appears to seek two formally separate remedies, inasmuch as the applicant seeks a declaration that the Commission has failed to act both by not issuing a reasoned opinion and 'by not responding clearly to the problem of the applicability of [the directives]' with regard to the statutory social security scheme in France. II-1569

10 ORDER OF CASE T-47/96 24 The Commission submits that the application is manifestly inadmissible in so far as it seeks a declaration that it has failed to act 'by not responding clearly to the problem of the applicability of [the directives]', since no such form of action is provided for among the remedies available to individuals under the EC Treaty. The form of order sought is not available either in an action for annulment under the fourth paragraph of Article 173 of the EC Treaty or, in the absence of damage sustained, in an action for damages under Articles 178 and 215 of the EC Treaty. Nor, moreover, can such a claim be raised in an action for failure to act under Article 175 of the EC Treaty, since a failure to 'respond clearly' does not amount to a failure by the institution concerned to adopt a legal measure to be addressed to the applicant. 25 It submits that, whilst such a head of claim may be treated as a substantive plea in law raised in support of an action for annulment, for damages or, as here, for failure to act, the fact remains that the applicant has not put forward any factual or legal basis for establishing that it is well founded. 26 The Commission thus considers that the remedy sought in the application is in reality a declaration by the Court that the Commission has failed to act by not initiating the procedure under Article 169 of the Treaty and in particular to address a reasoned opinion to the French Republic on the ground that the directives have been incorrectly transposed into domestic law. Such a form of action is inadmissible too, for a number of reasons. 27 First, under the third paragraph of Article 175 of the Treaty, an individual applicant may complain that an institution has failed to act only if it has failed to adopt a binding legal measure which should have been addressed to that applicant. In the present case, however, the complaint is that a measure which could not have been addressed to the applicant, namely a reasoned opinion of the Commission concerning an infringement by a Member State, was not adopted. II

11 28 Secondly, it is clear from the relevant case-law that 'individuals are not entitled to contest a refusal by the Commission to take action under Article 169 against a Member State' in view of 'the discretionary power conferred on the Commission by Article 169 itself' (Case 48/65 Liitticke and Others v Commission [1966] ECR 19, Case 247/87 Star Fruit v Commission [1989] ECR 291; and the orders of 13 November 1995 in Case T-l26/93 Dumei, v Commission [1995] ECR , Case T-127/95 Société Auxiliaire d'entreprises v Commission, not published in the ECR, and Case T-128/95 Aéroports de Paris v Commission, not published in the ECR). 29 Thirdly, the admissibility of an action for failure to act must also be assessed 'in the light of the nature of the request', that is to say of the measure sought. Since the reasoned opinion provided for in Article 169 of the Treaty is, according to the case-law, merely a preliminary stage following which an action may be brought before the Court of Justice for a declaration that the Member State has failed to fulfil its obligations, it cannot be regarded as an act whose annulment may be sought; consequently, 'a refusal by the Commission to initiate an infringement procedure is likewise an act which cannot be challenged' (Aéroports de Paris, cited above, paragraph 36). 30 Finally, the Commission submits that, even if the conditions were met for the applicant to bring an admissible action for failure to act, the action has become, at least in part, devoid of purpose and thus inadmissible following the letter of formal notice which the Commission sent to the French authorities on 31 January 1996, in accordance with the procedure laid down in Article 169 of the Treaty, concerning the failure to transpose the directives into the Code de la Mutualité. 3i The applicant states that its action does not seek either the annulment of any decision of the Commission or a finding of liability against the Community, but only a declaration that the Commission has failed to act by not initiating the Article 169 procedure against the French Republic. II-1571

12 ORDER OF 12. II CASE T-47/96 32 It submits that the Commission has persistently failed to respond both to the various heads of complaint set out in its correspondence with that institution concerning its complaint of 28 August 1995 and to the heads of claim set out in its application and that by choosing to object to the admissibility of the action the Commission merely confirms that it is well founded. 33 It claims that the Commission has exhibited culpable inertia and inaction vis-à-vis its members, who were and remain the true 'addressees' of the failure to act. In so doing, the Commission has failed to comply with certain fundamental principles, including equal treatment, the right to a hearing, legal certainty and the prohibition of discrimination on grounds of nationality, and has thus prevented the individuals concerned from being able to exercise the full rights conferred on them by the two directives. 34 The applicant notes that the Commission itself, in its objection to admissibility, accepts that the action is at least partly justified. In reply to the Commission's claim that the applicant has not put forward any factual or legal basis for establishing that its action for failure to act is well founded, it submits that it is necessary merely to refer to the letter of formal notice sent by the Commission to the French Government on 31 January 1996 to see that it matches perfectly the terms of the complaint of 28 August The Court, it claims, must thus see that the Commission did not examine the complaint with the necessary diligence and thoroughness. 35 The Commission's obligation to respond clearly to each of the heads set out in its complaint, and even to respond on its own initiative to the complaints which it could have raised if it had possessed all the information available to the Commission, is, in the applicant's submission, a matter of general principle whatever the type of legal proceedings involved. II-1572

13 36 In the applicant's view, the Commission's arguments are incoherent in so far as it submits that the action is, on the one hand, inadmissible because it was not obliged to initiate the Article 169 procedure against the French Republic and, on the other hand, devoid of purpose following the sending of a letter of formal notice to the French Government on 31 January In any event, the applicant considers, that letter, of which it has never been shown a copy, cannot render the present action devoid of purpose. 37 Finally, by ignoring for several months the merits of its complaint, the Commission has prevented the applicant from exercising its full rights before the national courts, even though in October 1995 it had taken the initiative of bringing infringement proceedings against Greece for failure to transpose the directives. The Commission thus failed to comply with the fundamental principles enshrined in Articles 48, 52, 59, 67 and 90 and in particular in Article 7 of the EC Treaty, in that French nationals are discriminated against on the basis of their nationality. Findings of the Court 38 It must first be noted that, although in the second head of claim in the application, to the effect that the Court should 'declare that the Commission has failed to act by not responding clearly to the problem of the applicability of Directives 92/49/EEC and 92/96/EEC to the monopoly held by the French statutory social security scheme in the fields of non-life insurance and life assurance', the applicant does not refer explicitly to the Commission's failure to initiate the Article 169 procedure against the French State, it does none the less express such a claim in the last paragraph of Part II of its application, headed 'Discussion', where it asks the Court to 'note the European Commission's failure to act by not addressing a reasoned opinion on each of the complaints raised and make an appropriate finding in that regard'. II-1573

14 ORDER OF CASE T-47/96 39 The applicant's second head of claim, as it appears in the application, must therefore be interpreted, as it has been by the parties in their pleadings, as seeking a declaration by the Court that the Commission has failed to act by, first, not responding clearly to the problem of the applicability of the abovementioned directives and, secondly, not addressing a reasoned opinion to the French Republic on the ground that the directives had been incorrectly transposed into domestic law. 40 As regards the Commission's alleged failure to respond clearly to the grounds put forward by the applicant in its complaint, it must first be pointed out that a natural or legal person may rely on the third paragraph of Article 175 of the Treaty only in order to seek a declaration that, in infringement of the Treaty, there has been a failure to adopt an act of which that person is a potential addressee (Case T-3/90 Prodifarma v Commission [1991] ECR II-l; Joined Cases T-479/93 and T-559/93 Bernardi v Commission [1994] ECR , paragraph 31; Case T-277/94 AITEC v Commission [1996] ECR , paragraph 58). In the present case, the applicant cannot be regarded as the potential addressee of an act of the Commission concerning the justification of its complaint, since there is no provision in the Treaty or any secondary legislation obliging the Commission to address to an individual an act embodying a finding as to the compatibility of national legislation with Community law. In any event, moreover, it has consistently been held that once the Commission has in fact responded or defined its position in response to a request made by an individual, there is no failure to act within the meaning of Article 175 of the Treaty. The fact that the measure adopted or the position defined by the institution concerned does not satisfy the applicant is of no relevance in that regard since, as is clear from the case-law, Article 175 refers to failure to act in the sense of failing to take a decision or to define a position, and not that of adopting a measure different from that desired or considered necessary by the applicant (Case 8/71 Komponistenverband v Commission [1971] ECR 705, at p. 710; Joined Cases 166/86 and 220/86 Irish Cement v Commission [1988] ECR 6473, paragraph 17; Joined Cases C-15/91 and C-108/91 Buckl and Others v Commission [1992] ECR , paragraph 17; and Case C-25/91 Pesqueras Etchebastar v Commission [1993] ECR , paragraph 12). In the present case, in its letters of 29 September 1995, 21 November 1995 and 27 February 1996, the Commission defined its position as regards the legal issues raised in the applicant's complaint, and there was thus no failure to act within the meaning of Article 175 of the Treaty. II -1574

15 4i As regards the allegation that the Commission failed to act by not addressing a reasoned opinion to the French Republic on the grounds set out by the applicant in its complaint, it is settled law that a natural or legal person has no standing to bring an action under Article 175 of the Treaty for a declaration that, by not initiating an infringement procedure against a Member State, the Commission has, in infringement of the Treaty, failed to act. 42 The Commission is not bound to initiate an infringement procedure against a Member State; on the contrary, it has a discretionary power of assessment, which rules out any right for individuals to require it to adopt a particular position. Moreover, as pointed out in paragraph 40 above, a natural or legal person may rely on the third paragraph of Article 175 of the Treaty only in order to seek a declaration that, in infringement of the Treaty, there has been a failure to adopt an act of which that person is a potential addressee. In the context of the infringement procedure laid down by Article 169 of the Treaty, the only measures which the Commission may have to take are addressed to the Member States (Case C-371/89 Emrich v Commission [1990] ECR , paragraphs 5 and 6; Case C-72/90 Asia Motor France v Commission [1990] ECR , paragraphs 10 and 11; Case T-5/94 J v Commission [1994] ECR , paragraph 16; Bernardi, cited above, paragraph 31; Dumez, cited above, paragraphs 43 and 44; Aéroports de Paris, cited above, paragraphs 42 and 43; and Société Auxiliaire d'entreprises, cited above, paragraphs 43 and 44). 43 Furthermore, a natural or legal person requesting the Commission to initiate a procedure under Article 169 is in fact seeking the adoption of an act which is not of direct and individual concern to it within the meaning of the fourth paragraph of Article 173 of the Treaty and which it would not in any event be able to challenge in annulment proceedings (Case T-13/94 Century Oils HelUs v Commission [1994] ECR , paragraph 14). II

16 ORDER OF CASE T-47/96 44 It follows that both parts of the applicant's second head of claim are inadmissible. 45 With regard to the third and fourth heads of claim, to the effect that the Court should 'declare the said directives fully applicable' and 'take all necessary measures and in particular order those directives to be transposed into the French Code de la Mutualité', it has consistently been held that the Community judicature is not entitled either to issue directions to the Community institutions or the Member States or to rule, on application by a natural or legal person, whether the conduct of a Member State is compatible with the Treaty (Century Oils Hettas, cited above, paragraph 17, and Case T-575/93 Koelman v Commission [1996] ECR II-1, paragraphs 29 and 30). Nor, consequently, is it entitled in the context of such an action to rule on the applicability of provisions of Community law to the facts of the dispute. 46 The applicant's third and fourth heads of claim are therefore also inadmissible, and the application must thus be declared inadmissible in its entirety. 47 There is consequently no need to take a decision on the applications to intervene submitted by the Kingdom of Spain and the French Republic. Costs 48 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the II

17 costs. Under Article 87(4), Member States which have intervened in the proceedings are to bear their own costs. If the Kingdom of Spain and the French Republic have incurred any costs as a result of their applications to intervene in the present case, they must bear those costs. On those grounds, THE COURT OF FIRST INSTANCE (Second Chamber) hereby orders: 1. The application is dismissed as inadmissible. 2. There is no need to take a decision on the applications to intervene. 3. The applicant is ordered to pay the costs. The Kingdom of Spain and the French Republic are each ordered to bear their own costs. Luxembourg, 12 November H. Jung Registrar C. W. Bellamy President II

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