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The Volkswagen Scandal at the CJEU: Defeat Devices between the Conformity Guarantee and Environment Law
Published online by Cambridge University Press: 08 November 2022
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- © The Author(s), 2022. Published by Cambridge University Press
References
1 See the contributions gathered in the Mini-symposium on the Volkswagen Scandal, (2016) 1 European Journal of Risk Regulation.
2 The context is well documented: see, among many others, N De Sadeleer, “Reinforcing EU Testing Methods of Air Emissions and the Approval Processes of Vehicle Compliance in the Wake of the VW Scandal” (2016) 17 ERA Forum 467, L Krämer, “Dieselgate and the Protection of the Environment by Public Authorities” in E Maître-Ekern, C Dalhammar and HC Bugge (eds), Preventing Environmental Damage from Products – An Analysis of the Policy and Regulatory Framework in Europe (Cambridge, Cambridge University Press 2018) p 153.
3 Based on para 25(2) of the German Verordnung über die EG-Genehmigung für Kraftfahrzeuge und ihre Anhänger sowie für Systeme, Bauteile und selbstständige technische Einheiten für diese Fahrzeuge (EG-Fahrzeuggenehmigungsverordnung). For a synthesis of the event in Germany, see C Schmid, “Germany” in M Frigessi Di Rattalma (ed.), The Dieselgate – A Legal Perspective (Berlin, Springer 2017), who underlines that the legal basis for such recall was not product safety law, but the framework that surrounds type-approval law (at p 33).
4 A first judgment of the CJEU handed down in the context of French penal procedures under Art 213-1 of the Code de la consommation against “X”, an actor of the diesel car industry, qualified as such the mechanism: see X (Defeat device on diesel engines), Case C-693/18, EU:C:2020:1040, followed by order of the Court in joint Cases 690/18, 691/18 and 692/18 of 6 May 2021, ECLI:EU:C:2021:363.
5 It adopted Regulation 2018/858 of the European Parliament and of the Council on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles, amending Regulations (EC) No 715/2007 and (EC) No 595/2009 and repealing Directive 2007/46/EC, OJ L 151, 2018, p 1.
6 The reasons for the use of software are not clearly explained, nor is the identity of the person(s) who actually ordered its use: see Krämer, supra, note 2, at p 154.
7 CJEU, 14 July 2022: Case C-128/20, GSMB Invest GmbH & Co. KG v Auto Krainer GesmbH (“C-128/20”); Case C-134/20, IR v Volkswagen AG (“Case 134/20”); Case-C-145/20, DS v Porsche Inter Auto GmbH & Co. KG, Volkswagen AG (“C-145/20”). Advocate General (AG) Rantos delivered on 21 September 2021 a joint opinion on these cases. The Court, however, delivered single judgments for each of them.
8 Under Art 267 TFEU. The questions were brought about in Austria by the Landesgericht Klagenfurt, the Landesgericht Eisenstadt and the Oberster Gerichtshof (Austria).
9 Regulation 715/2007 of 20 June 2007 on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information, OJ 2007 no. L 171, p 1.
10 Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees, OJ 1999 no. L 171, p 12 (“Directive 1999/44/EC”). As we know, this Directive was repealed in 2019 by Directive (EU) 2019/771 of 20 May 2019 on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC and repealing Directive 1999/44/EC (OJ 2019 L 136, p 28), with effect from 1 January 2022. Nevertheless, in view of the date of the dispute in the main proceedings, Directive 1999/44 remains applicable to that dispute.
11 Under paras 871 (1), 879 (1), 922 (1), 932 (1) and 4, Allgemeines bürgerliches Gesetzbuch (General Civil Code, “ABGB”).
12 Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles (Framework Directive), OJ 2007 L 263, p 1, as amended by Commission Regulation (EC) No 1060/2008 of 7 October 2008 (OJ 2008 L 292, p 1). For a definition of the EC type approval, see Art 3 (5): “procedure whereby a Member State certifies that a type of vehicle, system, component or separate technical unit satisfies the relevant administrative provisions and technical requirements of this Directive and of the regulatory acts listed in Annex IV or XI”. Annex IV further refers to Regulation 715/ 2007, which itself integrates emissions thresholds stemming from Euro 5 and Euro 6 (see also Case 145/20, at para 49).
13 See AG Rantos, at para 81; Case 128/20, at para 19; Case 134/20, at paras 24–25; Case 145/20, at para 34. The defendants sought to better define the technical contours of the temperature window: see, eg, Case 134/20, at para 35.
14 Directive 2007/46/EC, which provides that it “establishes a harmonized framework containing the administrative provisions and general technical requirements for approval of all new vehicles within its scope and of the systems, components and separate technical units intended for those vehicles, with a view to facilitating their registration, sale and entry into service within the Community” (Art 1).
15 ibid, 3rd Recital.
16 Regulation 715/2007, Arts 3 (6) and 4 (2).
17 Regulation No 83 of the Economic Commission for Europe of the United Nations (UNECE) – Uniform provisions concerning the approval of vehicles with regard to the emission of pollutants according to engine fuel requirements, OJ 2006, L 375.
18 1st Recital, Regulation 715/2007.
19 4th and 6th Recitals, Regulation 715/2007.
20 Art 1 (1), Regulation 715/2007.
21 See Regulation 715/2007, Art 4 (1): “1. Manufacturers shall demonstrate that all new vehicles sold, registered or put into service in the Community are type approved in accordance with this Regulation and its implementing measures. Manufacturers shall also demonstrate that all new replacement pollution control devices requiring type approval which are sold or put into service in the Community are type approved …. These obligations include meeting the emission limits set out in Annex I and the implementing measures referred to in Article 5.” Further requirements were set by Regulation (EC) No 692/2008 implementing and amending Regulation No 715/2007 (OJ 2008 L 199, p 1), later amended by Commission Regulation 566/2011, OJ 2011 L 158, p 1 (no longer in force).
22 Art 4 (2), Regulation 715/2007 (emphasis added). See also Art 5 (1): “[t]he manufacturer shall equip vehicles so that the components likely to affect emissions are designed, constructed and assembled so as to enable the vehicle, in normal use, to comply with this Regulation and its implementing measures”.
23 Defined as “any element of design which senses temperature, vehicle speed, engine speed (RPM), transmission gear, manifold vacuum or any other parameter for the purpose of activating, modulating, delaying or deactivating the operation of any part of the emission control system, that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use” (Art 3 (10), Regulation 715/2007, emphasis added).
24 Art 5 (2), Regulation 715/2007.
25 ibid, Art 5 (2) (a).
26 Art. 2 (1), Directive 1999/44/CE (emphasis added).
27 ibid, Art 3 (1) (a).
28 ibid, Art 2 (2) (a).
29 ibid, Art 2 (2) (b).
30 ibid, Art 2 (2) (c).
31 ibid, Art 2 (2) (d).
32 ibid, Art 2 (3).
33 ibid, Arts 3 (2) and (3), Directive 1999/44/CE. See also the 10th Recital: “consumers should be entitled to have the goods restored to conformity with the contract free of charge, choosing either repair or replacement, or, failing this, to have the price reduced or the contract rescinded” (Directive 1999/44/CE, emphasis added).
34 Delivered on 23 September 2021 (“AG Rantos conclusions”). The Court approved on almost all grounds the opinion delivered.
35 “Article 3(10) of Regulation No 715/2007, read in conjunction with Article 5(1) of that regulation, is to be interpreted as meaning that a device which, under real driving conditions of a motor vehicle, ensures exhaust gas recirculation in full only when the outside temperature is between 15 °C and 33 °C and the driving altitude is lower than 1000 m, whereas, outside that window, per 10 °C, and above an altitude of 1000 m, per 250 m, the exhaust gas recirculation rate decreases in a linear way down to zero, with the result that NOx emissions increase beyond the limit values laid down in the regulation, constitutes a ‘defeat device’” (AG Rantos conclusions, at para 81), inspired by first and third questions, Case C-128/20; first question, Case 134/20; and first part of the second question, Case C-145/20,.
36 CJEU, judgment of 17 December 2020, CLCV and Others (Defeat device on diesel engines), C-693/18, EU:C:2020:1040, at para 64 (“CLCV and Others (Defeat device on diesel engines)”).
37 In this regard, the CJEU stated “[t]hat broad interpretation of the concept of ‘element of design’ is borne out by the objective pursued by Regulation No 715/2007, which consists, as is apparent from recital 6 in the preamble thereto, in considerably reducing NOx emissions from diesel vehicles in order to improve air quality and comply with limit values for pollution” (ibid, at para 67).
38 Case 134/20, at paras 39–41 and Case 128/20, at para 36. The latter had been qualified as such an “element of design” in a famous French case that had brought the matter to the attention of the CJEU in a similar context: CLCV and Others (Defeat device on diesel engines), at para 68.
39 Art 3 (10), Regulation 715/2007 (emphasis added).
40 See, eg, Case 134/20, at para 25.
41 ibid, at paras 47–50.
42 ibid, at para 46; Case 128/20, at para 36.
43 AG Rantos, at para 92.
44 Case 134/20, at paras 53–54.
45 Second referred question, Case 128/20, at para 25. See also Case C-134/20 (second and third questions) and second part of the second question, Case C-145/20 (AG Rantos conclusions, at para 105 ss).
46 Case 128/20, at para 50; Case 145/20, at para 61.
47 Commission Regulation no. 692/2008 implementing and amending Regulation No 715/2007, OJ 2008 L 199, p 1.
48 Case 128/20, at para 51.
49 ibid, at para 52. See also AG Rantos, at para 115ff.
50 ibid, at para 54. See also AG Rantos, at para 110ff (emphasis added).
51 The defendant’s arguments are summarised by the Court at paras 59–63.
52 Case 128/20, at para 63 (emphasis added).
53 ibid, at para 65 (emphasis added).
54 ibid, at para 66 (emphasis added).
55 ibid, at para 67 (emphasis added).
56 ibid, at para 68.
57 ibid, at paras 64 and 70.
58 The question reads: “[i]s Article 2(2)(d) of Directive [1999/44] to be interpreted as meaning that a motor vehicle that falls within the scope of Regulation [No 715/2007] shows the quality which is normal in goods of the same type and which the consumer can reasonably expect if the vehicle is equipped with a prohibited defeat device … but the vehicle type nevertheless has a valid EC type approval, meaning that the vehicle can be used on the road?” (Case 145/20, at para 45. See also AG Rantos conclusions, at para 140 ff, and note that the contractual dimension is absent from Case 128/20 and is partly absent from Case 134/20).
59 Para 879(1) of the Allgemeines bürgerliches Gesetzbuch (Austrian Civil Code).
60 See Case 145/20, at para 47.
61 ibid, at para 48 (emphasis added).
62 ibid, at para 54 (emphasis added). See also AG Rantos, at para 611.
63 ibid, at para 55 (emphasis added).
64 ibid (emphasis added). See also AG Rantos conclusions, at para 152ff.
65 AG Rantos conclusions, at para 159.
66 Case 145/20, at para 88.
67 AG Rantos conclusions, at para 154.
68 ibid, at para 158.
69 ibid, at para 155.
70 Case 145/20, at para 85.
71 AG Rantos, at para 157.
72 Case 145/20, at para 86 (emphasis added).
73 ibid., at para 94; AG Rantos, at para 160.
74 ibid., at para 32. See also AG Rantos conclusions, at para 132ff.
75 ibid., at para 86; see similarly AG Rantos, at para 134.
76 ibid, at para 94.
77 See, eg, QB v Mercedes-Benz Group AG, formerly Daimler, C-100/21, Advocate General Rantos’s Opinion delivered on June 2, 2022, JO L 2022, p 420 and pending case Volkswagen Group Italia SpA, Volkswagen Aktiengesellschaft v. Autorità Garante della Concorrenza e del Mercato, C-27/22, JO L 2022, p 420.
78 So it is often called, although this is no legal category, nor is it scientifically sound. The word is rather loosely used by the media in a polemical, political fashion. Interestingly, it is used in opposition to corporate social responsibility: see BJ Richardson, The Art of Environmental Law: Governing with Aesthetics (Oxford, Hart Publishing 2019) at p 182.
79 ibid, at p 183.
80 The AG sets the scene around the protection of the environment at the very first paragraph of its opinion. Following this path, the Court, too, evokes the recitals of Regulation 715/2017.
81 1st Recital, Directive 1999/44/EC; 2nd Recital, Directive 771/2019/EC on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC, and repealing Directive 1999/44/EC, OJ L 136, 2019, p 28 (“Directive 771/2019/EC”).
82 Road transportation causes more than 28 percent of NOx emissions in the EU: see K Pedrose and B Vanheusden, “EU Air Pollution Law: Comprehensive but Insufficient” in M Peeters and M Eliantonio (eds), Research Handbook on EU Environment Law (Cheltenham, Edward Elgar 2020) at p 296.
83 Outside “discretionary windows”, the level of harmonisation it achieves is total regarding the aspects it covers: “Member States shall not maintain or introduce, in their national law, provisions diverging from those laid down in this Directive, including more, or less, stringent provisions to ensure a different level of consumer protection, unless otherwise provided for in this Directive” (Directive 771/2019/EC, Art 4).
84 ibid, 2nd and 10th recitals (emphasis added).
85 See Art 4, Directive 771/2019/EC, and further examples at 18th and 19th Recitals.
86 Directive 2019/771 on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC, and repealing Directive 1999/44/EC, OJ 2019 L, 136.
87 ibid, Art 6 (a) (emphasis added).
88 ibid, Art 2 (10).
89 Richardson, supra, note 78, at p 182.
90 For a comparative account of the dieselgate, see the contributions gathered by Frigessi di Rattalma, supra, note 3.
91 See M Faure, “Regulatory Strategies in Environmental Liability” in F Cafaggi and H Muir Watt (eds), The Regulatory Function of European Private Law (Cheltenham, Edward Elgar 2009) at p 129; and, more recently, B Geebelen, “Ability of EU Legislation to Deter: The Volkswagen Case” (2017) 26 European Energy and Environmental Law Review 102.
92 See OO Cherednychenko, “Regulatory Agencies and Private Damages in the EU: Bridging the Gap between Theory and Practice” (2021) 40(1) Yearbook of European Law 146, at pp 147–48.
93 K Reiners and E Verluis, “NGOs as new Guardians of the Treaties? Analysing the Effectiveness of NGOs as Decentralised Enforcers of EU Law” (2022) Journal of European Public Policy.
94 See G Pedrazzi, “Civil and Consumer Law” in M Frigessi Di Rattalma (ed.), The Dieselgate – A Legal Perspective (Berlin, Springer 2017), at p 119.
95 See, eg, Proposal for a Directive on representative actions for the protection of the collective interests of consumers, and repealing Directive 2009/22/EC, COM/2018/0184 final 2018/089 (COD).
96 Regulation (EU) 2017/2394 on cooperation between national authorities responsible for the enforcement of consumer protection laws and repealing Regulation (EC) No 2006/2004, JO 2017 L 345.
97 See, in the Dieselgate context, K Van Elten and B Rehder, “Dieselgate and Eurolegalism. How a Scandal Fosters the Americanization of European Law” (2022) 29 Journal of European Public Policy 281. However, contextual differences must be considered in the comparison: see, eg, E Mujkic and D Klingner, “‘Dieselgate’: How Different Approaches to Decentralization, the Role of NGOs, Tort Law and the Regulatory Process Affected Comparative U.S. and European Union Outcomes in the Biggest Sandal in Automotive History” (2019) 43(7) International Journal of Public Administration 611.
98 One is indeed sufficient, as the mutual recognition principle then grants market access to the entire EU territory.
99 7th Recital, Regulation 715/2007 (emphasis added).
100 De Sadeleer, supra, note 2, at p 474. He adds: “[i]n fact, the aim of the EU environment law model is not to eliminate pollution, but rather to contain its most serious consequences” (at p 484). For a very thorough theoretical analysis of standards and the law, see H Schepel, The Constitution of Private Governance (Oxford, Hart Publishing 2005) at p 6.
101 S Poier, “Clean and Green – The Volkswagen Emissions Scandal: Failure of Corporate Governance?” (2020) 15(2) Problems of Sustainable Development 33, at p 38.
102 See, besides the diesel car regulatory framework, Regulation (EU) 2017/2394 of the European Parliament and of the Council of 12 December 2017 on cooperation between national authorities responsible for the enforcement of consumer protection laws and repealing Regulation (EC) No 2006/2004, OJ L 345, 27 December 2017, p 1. Some authors remark that the practice was documented years before: see C Coglianese and J Nash, “The Law of the Test: Performance-Based Regulation and Diesel Emissions Control” (2017) 34 Yale Journal on Regulation 33, at p 36.
103 QB v Mercedes-Benz Group AG, formerly Daimler, supra, note 77.
104 See, eg, pending case Volkswagen Group Italia SpA, Volkswagen Aktiengesellschaft v. Autorità Garante della Concorrenza e del Mercato, supra, note 77.
105 H-W Micklitz, A-L Sibony and F Esposito, The Bright and Adventurous Future of Consumer Law Research (Cheltenham, Edward Elgar 2018) at p 1.