What situation are we in after the Lugo Judgment that dismisses the lawsuit against the milk cartel?

Recently the media reported on the Judgment of the Court of First Instance no. 2 of Lugo, with commercial jurisdiction, dated June 3, 2022, which completely dismissed the lawsuit filed by a cattle farm against several companies sanctioned by the CNMC for the milk cartel, with express imposition of costs to the plaintiff.

This new Judgment has caused a significant furor among the media and in the agricultural sector due to the relevance and important economic consequences of a cartel that has lasted for almost 14 years.

The plaintiff cattle ranch requested among its claims that the joint and several liability of the cartel companies be declared, and must respond for an amount of almost one million and a half euros, for damage caused and revaluation update, plus interest and costs of the procedure.

The plaintiff ranch based its claims on the fact that the defendant companies had engaged in anti-competitive practices in accordance with the provisions of article 1 of the Competition Defense Law and in article 101 of the TFUE . The plaintiff alleged that the defendant companies, in their capacity as main operators of the Spanish dairy industry, had developed restrictive practices contrary to free competition since 2001.

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It is true that the behaviors carried out by the operators of dairy industries in Spain have already been sanctioned by the National Market Commission and the Competition in the Resolution dated July 11, 2019.

In the case of follow-on actions, jurisprudence is unanimous in determining that the date of publication of the CNMC Resolution intervenes as the start date of the calculation of the annual term prescription. From the moment the plaintiff party has reasonable knowledge of the existence of the infringement, perpetrators, purpose, circumstances and its presumed extent, with an estimated assumption of the damage suffered derived from the conduct that was found to be unlawful there.

The lawsuit filed by Ganadería de Lugo, according to the first instance judgment, sought, without ever having interrupted the prescription, to jointly declare the liability and the claim of damages, regardless of the Resolution of the CNMC which, as of today, is pending resolution by the National Court.

It should be clarified that the trial judgment does not assess the merits of the matter, that is, whether there has been economic damage to the livestock or not. The court dismissed the claim, understanding that the action is time-barred as it was based on an administrative resolution (which is not final today), and without ever having interrupted the limitation period.

However, after the date of the Lugo Judgment, the Court of Justice of the European Union extended the term to interrupt the prescription to 5 years in cartels, which means that all those farmers who have not interrupted the prescription period can still initiate their claim. In accordance with the provisions of the CNMC Resolution, all those farmers who were affected during the period from 2000 to 2013 can claim their compensation, regardless of whether the farm continues active, has been terminated or retired, or even that there has been a change of ownership of the CEA.

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This criterion established by the CJUE opens the possibility that many farmers can claim, despite never having interrupted the limitation period.</p >

In any case, it is important to interrupt the prescription within the legally applicable deadlines, to have the option of legally claiming against the sanctioned dairies.

The truth is that, despite what it may seem, the Judgment handed down by the Court of First Instance no. 2 of Lugo, the situation does not change regarding the damages caused by the milk cartel; but it does have to influence the importance of correctly interrupting the limitation periods, counting for this on professionals who are experts in this type of claim.

Any questions you have, contact us, we will offer you the advice you need in this type of situation.

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Patricia Prendes
Director of the Department of Agrarian Law

12/09/2022