Costa v. Ente Nazionale per L'Energia Elettrica

Flaminio Costa (plaintiff) was a lawyer living in Milan, Italy. Costa was a customer of electricity provider Messrs. Edisonvolta SPA (Edisonvolta). In May 1963, pursuant to Italian Law 1643 and related presidential decrees, which vested Ente Nazionale per L’Energia Elettrica (ENEL) with a monopoly over electricity supply, Edisonvolta transferred all its assets and undertaking (i.e., its business) to ENEL. Arguing that he never contracted with ENEL, Costa sought a judicial declaration that he did not have to pay the electricity bill that ENEL issued him. ENEL responded that it was entitled to payment because it performed its end of the bargain by supplying Costa with electricity. The Milan Conciliatore suspended the proceedings and referred the matter to both the Italian Constitutional Court and the European Court of Justice (ECJ). The ECJ ruled that Articles 37(1) and (2) of the treaty (EEC Treaty or Treaty of Rome) that created the European Economic Community (EEC) obliged national courts to protect individual rights against new measures that led to certain discriminatory monopolies regarding the supply of commercial products that lent themselves to competition and exchanges between EEC member states. Thus, per the ECJ, Law 1643 would violate Article 37(2) if it led to discrimination between Italy and other EEC member states in matters of the supply of electricity. The Constitutional Court ruled that Law 1643 and the related decrees were constitutional. The matter then returned to the Milan Conciliatore for decision regarding whether Italian courts were bound to follow EEC law if EEC law conflicted with Italian law and whether Law 1643 conflicted with EEC law.