Clifford Chance

The German Federal Constitutional Court has recently ruled that the European Court of Justice has to decide whether a consumer can claim compensation for GDPR violations causing no financial harm. In Germany, the court of last resort unduly exceeded the scope of legal evaluation by ruling on the right of compensation and liability (Art. 82 GDPR) and interpreting European law without requesting a preliminary ruling.

The Case

Main proceedings

The original proceeding was argued before the district court of Goslar (AG Goslar, 27. September 2019 – 28 C 7/19). The Claimant, a lawyer, received an unsolicited advertising email to his business email account. He therefore filed a suit for injunction (amongst others) as well as an action for monetary compensation based on Art. 82 para 1 GDPR. He explained that his business email account was used in violation of Art. 6 GDPR because he did not give his consent. The district court decided that no compensation was owed based on Art. 82 GDPR due to a lack of material harm.

According to case law of the Federal Court of Justice, monetary compensation for infringement of personality rights in cases that are not influenced by Union law, can only be considered in the event of a serious encroachment that cannot be compensated in any other way. Whether this ratio also applies to the claim asserted here based on Art. 82 GDPR was considered questionable by the district court of Goslar in the light of sentence 3 of recital 146 GDPR.

However, the district court denied any claim to compensation based on Art. 82 GDPR and argued that the materiality threshold was not reached. The local court further stated that there was no damage caused by the advertising email sent at a reasonable time of day. Furthermore, its external appearance made clear, that it was an advertisement, which led to the conclusion that there was no necessity to deal with its content in a time-consuming manner.

The Claimant then filed a constitutional complaint to the German Federal Constitutional Court after his appeal of hearing was dismissed by the local court Goslar.

Preliminary ruling procedure

According to the case law of the ECJ, a national court of last resort must comply with its obligation to make a reference if a question of Union law arises in proceedings pending before it, unless the court has found that the question raised is not relevant to the decision, that the provision of Union law in question has already been the subject of an interpretation by the ECJ (acte éclairé) or that the correct application of Union law is so obvious that there is no room for reasonable doubt (acte clair). The facts to be assessed in the main proceedings raised the question under which conditions Art. 82 para 1 GDPR grants a claim for monetary damages and which understanding of this provision is to be given in particular with regard to recital 146 sentence 3, which requires a broad interpretation of the concept of damage in light of the case law of the ECJ that fully complies with the objectives of the GDPR. Pursuant to Art. 82 para 1 GDPR, any person who has suffered material or non-material damages as a result of a breach of the GDPR is entitled to compensation from the controller, which is, the natural or legal person, public authority, agency or other body which alone or jointly with others determines the purposes and means of the processing of personal data (see Art. 4 No. 7 GDPR).

No "acte éclairé"

The claim for monetary compensation has not been exhaustively clarified in the case law of the ECJ, nor can its individual requirements be determined directly from the GDPR. The details and the exact scope of the claim are also still unclear in the literature available to date, which in view of recital 146 argues in favor of a broad understanding of the concept of damages.

No "acte clair"

According to the German Federal Constitutional Court, the district court could also not assume the existence of an "acte clair". An "acte clair" requires that a correct application of Union law is so obvious that there would be no room for reasonable doubt. However, the national court may only assume this if it is convinced that the courts of the other Member States and the ECJ would be equally certain. Only then may the court refrain from a referral and resolve the question on its own responsibility. Since Art. 82 GDPR expressly includes non-material damages but does not determine the specific requirements for monetary compensation the German Federal Constitutional Court declines an "acte clair".

Obligation to ask ECJ 

The obligation to make a reference under Art. 267 TFEU to clarify the interpretation of Union law provisions is handled in an unconstitutional manner if a court of last resort does not consider a reference at all despite the (in its opinion) relevance of the Union law question for a decision, although it itself has doubts as to the correct answer to the question.

It is not the justifiability of the interpretation of the substantive Union law relevant to the dispute - in this case the GDPR – which is primarily relevant for the question of a violation of the right to the lawful judge pursuant to Art. 101 para 1 sentence 2 of the German Constitution (GG) by not submitting the case to the ECJ, but it rather is the observance or misapprehension of the requirements of the obligation to submit the case pursuant to the provision of Art. 267 para TFEU, which determines the lawful judge in the dispute. The answer to the question of how Art. 82 para 1 GDPR is to be interpreted against the background of recital 146 in cases of sending an email without consent was relevant to the decision on the claim for compensation asserted by the complainant.

Taking these principles into account, the district court violated Art. 101 para 1 sentence 2 GG by refraining from requesting a preliminary ruling on the question to be clarified as to whether, in the case presented by the complainant of the use of an email address in violation of data protection and the sending of an unwanted email to the complainant's business email account, a claim for damages by the complainant can be considered under Art. 82 para 1 GDPR.

The German Federal Constitutional Court therefore ruled, that the district court Goslar was obliged to submit the proceeding to the European Court of Justice (ECJ). In a proceeding, where an appeal is not permitted, the ECJ takes the role of one's lawful judge, if the district court breaches its obligation pursuant to Art. 267 para 3 TFEU. It may constitute a deprivation of the statutory judge if a national court fails to comply with its obligation to refer a matter to the ECJ for a preliminary ruling under Art. 267 para 3 TFEU.

The submission requirement was not met by the district court Goslar. The legal question to be clarified as to how Art. 82 para 1 GDPR is to be interpreted with regard to the recital 146 in cases where an email is sent without consent has not yet been the subject of an interpretation by the ECJ, nor is the correct application of Union law evident.

According to the German Federal Constitutional Court, the proceedings raise the question under which conditions Art. 82 para 1 GDPR grants a claim for monetary compensation. In addition, the ECJ would have to clarify how the provision is to be understood, particularly regarding sentence 3 of recital 146.

European court of justice must clarify requirements and scope of Art. 82 GDPR

As pointed out, the claim for monetary compensation has not been exhaustively clarified in the case law of the ECJ, nor can its individual requirements be determined directly from the GDPR. According to the German Federal Constitutional Court, the district court Goslar had indeed seen the problem and assessed it as relevant to the decision, but then incorrectly interpreted Union law itself.  Thus, it relied on the lack of materiality, although this feature is neither directly laid out in the GDPR nor advocated by the literature or used by the ECJ.

The German Federal Constitutional Court upholds the admissible constitutional complaint. The district court Goslar must now decide anew and will probably submit these questions to the ECJ in the context of a preliminary ruling procedure.

Looking to the future

If the district court Goslar submits these questions to the ECJ in the context of a preliminary ruling procedure, the two highly controversial issues in the context of non-material damages for data protection infringements, namely the de minimis threshold and the materiality threshold, could be clarified. However, it is rather questionable that the ECJ will take a position on all practically relevant questions.