Lawyers Warn Of “Pandora’s Box Of Unintended Consequences” After Advocate General Gives Opinion In European Court Of Justice Labeling Case

"If adopted, the Advocate General’s reasoning opens the floodgates to harmful litigation against EU companies, for it allows consumers to argue that any ethical consideration regarding any country of origin is relevant to product labeling laws. A CJEU ruling that politicized labeling must be applied to goods coming from territories involved in legal disputes will be a commercial disaster," says The Lawfare Project after Advocate General gives opinion in European Court of Justice labeling case

The Lawfare Project

The Lawfare Project

The Lawfare Project today reacted to the advisory opinion given by the Advocate General at the European Court of Justice in a landmark case regarding the discriminatory labeling of Israeli products. The case was referred to the European Court by the French Conseil d’État, having been brought by Psâgot Winery Ltd, an Israeli wine producer and exporter, together with The Lawfare Project, a civil-rights group and litigation fund that files cases against anti-Semitic discrimination around the world.

The case challenged an opinion published by the French Minister of Economics and Finance in November 2016, which stated that products from the Golan Heights or West Bank have to be labeled as coming from Israeli settlements (“colonies Israéliennes”) or equivalent terms.

In giving his advisory opinion, Advocate General Gerard Hogan endorsed the derogatory labeling for Israeli products, which many have criticized as not only a double standard against Israel but as entirely irrelevant to consumer choice and protection. In fact, polling has shown that consumer choice is unaffected by whether a product is labeled as coming from Israel or an “Israeli colony.”

According to the Advocate General’s opinion, EU law requires that products coming from territories under Israel’s control since 1967 are specifically labeled as coming from an “Israeli colony.”  Throughout his opinion, the Advocate General references the needs of consumers and what consumers might well want, as though those two things are the same and interchangeable. The Advocate General’s conclusion is predicated on the notion that any ethical consideration regarding a country of origin that may be relevant to a consumer must be relevant for labeling laws.

It is important to note that the Advocate General’s opinion is non-binding. The opinion of the European of Court of Justice will be decided by a Grand Chamber of 15 judges who will reach their decision at a later date, likely to be later this year. If the court’s decision corresponds with the Advocate General’s opinion, lawyers warn, then regardless of its consequences on the labeling of Israeli products, it could open the floodgates for litigation against EU companies involving the labeling of any and all goods imported into the EU.

The Advocate General argues in paragraph 51 of his opinion that consumers may object to “the purchase of goods from a particular country because, for example, it is not a democracy or because it pursues particular political or social policies which that consumer happens to find objectionable or even repugnant.” Yet if EU law was to be interpreted as requiring that all perceived violations of international law must be addressed by product labeling, it would be a vastly complex commercial disaster.

Lawyers acting for Psâgot and The Lawfare Project expressed concerns following the publication of the Advocate General’s opinion.

“If the court was to reach the same conclusion as the Advocate General it risks opening up a Pandora’s box of unintended consequences,” said François-Henri Briard, Attorney before the French Supreme Court and counsel for Psâgot. “EU rules are there to provide fair and relevant information to consumers, not to cater to political or religious prejudices. If such labeling is applied to Israeli products, surely it will also need to be applied to scores of other countries around the world who could be argued to be in violation of international law.”

Brooke Goldstein, the Executive Director of The Lawfare Project, said:

“The Advocate General’s opinion is non-binding. That means the European Court of Justice still has a historic opportunity to end this double standard against Israel. It is a flagrant act of discrimination that, despite hundreds of territorial disputes around the world, it is only Israeli businesses—and EU businesses working with them—that find themselves targeted by these unnecessary and politicized labeling requirements.

Further, we are deeply offended that products originating in the same territory would be subject to different labeling requirements depending on the nationality of those who produced them. This is the definition of discrimination and the Advocate General’s opinion seems to be endorsing a racist double standard.”

Pondering additional unintended consequences should the Court adopt a similar opinion to the Advocate General, Goldstein added:

“The Court cannot mandate that product labels become political billboards without the decision having dire precedential consequences that have not been thought through. Even if it was the intention of the legislator to have labels applied for violations of international law, the question remains as to why we only have such labels on products exported by Israel. If the politicization of labeling is indeed adopted as EU law, it will not be long until we see a myriad of lawsuits filed against EU businesses demanding that goods from China be labeled ‘products of human rights abuses,’ goods from Iran be labeled ‘products of women’s rights abuses,’ and goods from the Unites States be labeled ‘products of a country that institutes capital punishment.’ What will the labels say on products from Crimea? The consequences of such a precedent would be absurd.

Moreover, boycotts of Israel are unlawful under U.S. law. We will be looking into whether this discriminatory labeling constitutes a de facto boycott, as already warned by members of Congress at the time such labels were first adopted. If it does, this could have major consequences on the trading relationship between American businesses and the European Union, and have an enormously harmful effect on EU companies that avail themselves of the American market. There is no doubt that a decision in favor of politicized labeling will increase the costs associated with doing business in the EU, and will expose EU companies and importers to enormous liability, as well as demands from all sorts of groups based on ‘ethical considerations’ absent any checks and balances. In short, it will be a commercial disaster.”

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About The Lawfare Project: Headquartered in New York, The Lawfare Project, a 501(c)(3) non-profit organization, is a legal think tank and litigation fund committed to protecting the civil and human rights of Jewish communities around the world. To learn more, please visit www.thelawfareproject.org.