Case 120/86 Mulder [1988] ECR 2321

• C, Dutch dairy farmer, was paid a premium to not deliver milk products for five years.
• After C later applied for a reference quantity of milk, D rejected the application on the basis that there was no milk for the new levy scheme under Council Regulation 856/84.

• How should Council Regulation 856/84 be interpreted?
• Does Regulation 856/84 breach Community law?
• Has C violated Community law by following Regulation 1078/77 during a reference year?

• C’s claim allowed – Regulation No 856/84 does in fact violate legitimate expectations.

• In the case of Case 120/86 Mulder [1988] ECR 2321, the European Court of Justice ruled on whether there should be protection of legitimate expectations.
• This EU case is about agriculture, legitimate expectation and the principle of legal certainty.

Advocate General (Sir Gordon Slynn)

Legitimate expectation

• C was entitled to withhold the supply of milk until the agreement ended as per legitimate expectation.
• The court relied on Case 201/85 Kipgen (nee Klensch) v Secretaire d’Etat a l’Agriculture et a la Viticulture [1986] E.C.R. 3477 to support the ruling that provisions should be interpreted consistently with the Treaty.
• “Where such a producer, as in the present case, has been encouraged by a Community measure to suspend marketing for a limited period in the general interest and against payment of a premium he may legitimately expect not to be subject, upon the expiry of his undertaking, to restrictions which specifically affect him precisely because he availed himself of the possibilities offered by the Community provisions.”
• It follows that the regulations on the additional levy on milk were adopted in breach of the principle of protection of legitimate expectations. Those regulations must therefore be declared invalid on that ground, and it is unnecessary to consider the other arguments as to their invalidity put forward in the course of the proceedings.”

The Mulder case (Case 120/86), commonly referred to as the “Milk Quotas” case, is a critical ruling in European Union law, particularly in the context of the Common Agricultural Policy (CAP). This case’s judgment has far-reaching implications for agricultural law, administrative practices, and the rights of farmers within the EU. Here are the significant areas of impact:

• Establishment of Principles on Retroactive Legislation: The Mulder decision is pivotal in understanding how the EU handles retroactive legislation. The court found that retroactively applying milk quotas to farmers who had previously ceased production was unjust and violated the principles of legal certainty and legitimate expectations. This ruling influenced subsequent cases like P and Others v Commissions (C-68/95) and Kempter v Hauptzollamt Muenchen-Mitte (C-2/06) from the attached file, where the principles of non-retroactivity and protection of legitimate expectations were further clarified. These cases highlight the importance of these principles in ensuring that EU regulations do not unjustly penalize individuals or businesses after the fact.
• Impact on Agricultural Policy and Farmers’ Rights: Mulder significantly impacted the development of agricultural policy within the EU. By ruling against the imposition of quotas on farmers not actively producing at the time quotas were introduced, the CJEU upheld the farmers’ rights and influenced the formulation of more equitable agricultural policies. This case has been referenced in later decisions such as Hormann v Landwirtschaftskammer Weser-Ems (C-298/05), where issues of fair treatment in agricultural grants and subsidies were examined. The Mulder case thus continues to serve as a cornerstone for cases involving the balance between EU policy objectives and individual rights.
• Influence on Administrative Practices within the EU: The ruling in Mulder also prompted changes in administrative practices concerning the implementation of EU policies. The case stressed the need for transparency and fairness in administrative decisions, particularly those affecting the livelihoods of individuals. This influence is evident in cases like Commission v United Kingdom (C-530/11), where the Court scrutinized the administrative processes involved in the allocation of fishing quotas. These cases reflect the broader implications of the Mulder ruling on how the EU and its member states manage and implement policy decisions.