Mannesmann-Röhrenwerke AG v. Council of the European Communities

The United States (US) and the European Economic Community (EEC) entered into an agreement limiting the amount of steel pipes and tubes, including oil-country tubular goods (OCTG), that EEC member states could export to the US. In accordance with this agreement, the Council of the European Communities (council) (defendant) enacted EEC Regulation 60/85, which generally apportioned the EEC’s export quota among the EEC’s member states based on objective criteria. However, Regulation 60/85’s Annex III stated that the council would establish the OCTG allocation by January 31, 1985. Article 5 of Regulation 60/85 required each member state to issue export licenses corresponding to that state’s export quota and in compliance with other criteria, such as traditional export patterns and the possible impact of new market entrants. Effective August 20, 1985, the council enacted Regulation 2355/85, which inserted a table regarding OCTG into Annex III. This table replaced Article III’s OCTG entry and specified each EEC member state’s export allocation. Mannesmann-Röhrenwerke AG and Paderwerk Gebrueder Benteler GmbH & Company (collectively, Mannesmann-Röhrenwerke) (plaintiffs) were German OCTG purveyors. Mannesmann-Röhrenwerke sued the council in the European Court of Justice pursuant to Article 173(2) of the treaty that created the EEC (also known as the Treaty of Rome), seeking a declaration that Regulation 2355/85 was void. In the alternative, Mannesmann-Röhrenwerke contended that Regulation 2355/85 was not retroactive and thus was inapplicable between January 31 and August 20, 1985. The council responded that (1) Regulation 2355/85 merely supplemented Regulation 60/85 and the two regulations thus should be considered as a whole and (2) considering the two regulations together, Regulation 2355/85 was the kind of regulation that individuals could not challenge. The council further argued that Regulation 2355/85 did not directly affect Mannesmann-Röhrenwerke because the apportionment of Germany’s export quota among Germany’s undertakings (i.e., companies) was carried out by Germany and not by the EEC. Mannesmann-Röhrenwerke countered that it was directly affected by Regulation 2355/85 because (1) Germany’s export allocation allegedly was too small under Regulation 60/85’s objective criteria, thus requiring German would-be exporters to reduce US exports accordingly, and (2) barriers to entry and the unduly small German allocation effectively meant that Mannesmann-Röhrenwerke could not enter the German market.