Faites-vous opérer en France. AG Bobek on Article 18 TFEU

In 2006 a German patient received, in Germany, defective breast implants manufactured by Poly Implant Prothèse SA (‘PIP’), a French undertaking that is now insolvent. The patient seeks compensation before the German courts from Allianz IARD SA, the French insurer of PIP.

In France, manufacturers of medical devices are under a statutory obligation to be insured against civil liability for harm suffered by third parties arising from their activities (see Article L.1142‑2 of the Public Health Code). That obligation led PIP to conclude an insurance contract with Allianz, which contained a territorial clause limiting the cover to damage caused on French territory only. Thus, PIP medical devices that were exported to another Member State and used there were not covered by the insurance contract.

In this context, the Oberlandesgericht Frankfurt am Main enquires whether the fact that PIP was insured by Allianz for damage caused by its medical devices on French territory only, to the exclusion of that potentially caused in other Member States, is compatible with Article 18 TFEU and the principle of non-discrimination on grounds of nationality contained therein.

The referring court asked first whether Article 18 has a direct third-party effect; subsidiarily, it asked about an indirect discrimination on the basis of nationality on the side of the competent French authority – as an emanation of the State -, who did not object to the territorial clause mentioned above (two further questions followed, for the case of an affirmative reply to the first one).

AG’s Bobek opinion on the case (case C-581/18) was published on 6 February 2020. It contains principally reflections on the autonomous application of Article 18 TFUE. Additionally, in response to a first point of disagreement among the parties presenting observations, it explores the criteria determining whether a subject matter falls under the scope of application of EU.

Mr. Bobek rejects an interpretation of Article 18 TFEU as an autonomous provision creating enforceable obligations not already laid down by one of the four fundamental freedoms, or specifically provided for in any other instrument of EU law: and this, for structural reasons (as he says, in order to respect the regulatory logic of the internal market). According to Mr. Bobek (at 110), otherwise Article 18 TFEU would be turned

into a limitless provision, by virtue of which any issue, however remotely connected to a provision of EU law, could be harmonised by judicial means. It would furthermore turn regulatory competence within the internal market on its head, generating irreconcilable future conflicts of competence between the Member States.

He goes on to say (at 112) that

it is also clear from the discussion of the present case that if Article 18 TFEU were allowed to operate as a free-standing, substantive obligation in the way implied by the referring court in its questions, its reach would go beyond anything that the free movement case-law ever contemplated, including the case-law on goods pre-Keck. Interpreted in that way, there would be no limit to the scope of Article 18 TFEU: that provision would be turned into a Dassonville formula on steroids. In today’s interconnected world, sooner or later, there is inevitably some sort of interaction with goods, services or persons from other Member States. If that were enough to trigger the independent applicability of Article 18 TFEU, every single rule in a Member State would be caught by that provision.”

And adds later (at 114, 115)

the rules on free movement, as well as Article 18 TFEU, logically only cover the free flow of goods or services across borders, including exit and entry. Unless expressly harmonised by the EU legislature, the rules on their subsequent use are a matter for the Member States where they are used (…). In other words, the fact that goods once came from another Member State is not a sufficient reason to suggest that any matter later concerning those goods is covered by EU law.

From a legal point of view, the opinion is most probably correct (the practical outcome, “vous auriez dû aller vous faire soigner en France”, may be morally regrettable; but an expansive interpretation of Article 18 is not the appropriate way to avoid it). However, I have to admit I do not follow him when he seeks support on PIL arguments. This happens at 113, where he puts forward a possible consequence of an independent applicability of Article 18 TFEU:

To take just one example: imagine that, while drafting this Opinion, I am injured — hopefully not too seriously — because the computer I am typing on explodes. The various parts of the computer are likely to have been produced in a Member State other than Luxembourg, more likely even, in the age of integrated supply chains, in several Member States, if not also third countries. Absent any specific contractual terms concerning applicable law and jurisdiction between the producer of that computer and myself, therefore assuming normal rules on tort (delict) were to apply, the applicable law governing any damages claim is likely to be Luxembourg law, as the law of the State in which the accident occurred. Should I then, if I were to find Luxembourg law unsatisfactory for my damages case, have the possibility of relying on Article 18 TFEU in order to invoke the law of the place of production of the computer, or perhaps even the place of production of any of the components of the computer, and have my claim enforced before a Luxembourg court?

Nor do I understand either, at 115, why his recollection of the statutory doctrine:

If that logic were to be embraced, by a questionable interpretation of Article 18 TFEU, the movement of goods in Europe would become (once again) reminiscent of medieval legal particularism, whereby each product would, like a person, carry its own laws with it. Goods would be like snails, carrying their homes with them in the form of the legislation of their country of origin, to be applicable to them from their production to their destruction.

I was looking for conflict-of-law echoes in the Opinion, thus I was happy to find them; but (surely my fault) I fail to see the link of this line of argument with the case at hand. Anyway, one does not need to agree with each single point of an Opinion to approve of it. And it is always fun to read Mr. Bobek.