Cannabis, Coffee Shops, Non-Discrimination and Public Policy: Case C-137/09

The Court of Justice has handed down an intriguing judgment in Case C-137/09 Marc Michel Josemans v. Burgemeester van Maastricht about the right to restrict the access of non-residents to places called "coffee shops" which sell dope legally in the Netherlands. The Court held it is possible to restrict entry to such places to residents and ban non-residents from them in order to combat drug tourism and what it calls the accompanying public nuisance.

Here's the story. In principle, the Netherlands bans the possession of and dealing in all manner of narcotic drugs. Yet, it has a policy of tolerance with regard to cannabis and in particular allows the establishment of coffee-shops. Don't be mistaken, you don't go to such coffee shops to sip a latte because their main activities are the sale and consumption of weed. Local authorities may authorize such establishments in compliance with certain criteria. In a number of coffee-shops, non-alcoholic beverages and food are also sold.

Maastricht is a pleasant town on the banks of the Meuse close to the German and Belgian borders. To try to prevent drug tourism the Municipal Council of Maastricht banned any coffee-shop owner from admitting to his establishment persons who do not have their actual place of residence in the Netherlands. So, if you lived over the border, you could not go and smoke up in a Maastricht coffee shop with your Dutch friends.

The plaintiff in the main case, Mr Josemans, runs the ‘Easy Going’ coffee-shop in Maastricht. He was denounced for allowing foreign residents to his coffee shop and so the local Mayor closed his place down. Mr Josemans challenged that decision, claiming the Municipal ban on foreign residents constitutes unjustified unequal treatment of citizens of the European Union and that, more specifically, people who are not resident in the Netherlands are denied the possibility of buying non-alcoholic beverages and food in coffee-shops, which is contrary to European Union law. The case reached the Dutch Council of State, which then referred a number of questions to the Court of Justice.

The first question referred to the Court of Justice was what provisions of EU law applied to the sale of cannabis and what provisions applied to the sale of non-alcoholic beverages.

The Court held that narcotic drugs which are not distributed through channels which are strictly controlled by the competent authorities to be used for medical and scientific purposes are, because of their very nature, subject to a prohibition on importation and offering for sale in all the member States (Case 221/81 Wolf [1982] ECR 3681, paragraph 10; Case 240/81 Einberger [1982] ECR 3699, paragraph 10; Case 294/82 Einberger [1984] ECR 1177, paragraph 15; Case 269/86 Mol [1988] ECR 3627, paragraphs 15 and 18; Case 289/86 Vereniging Happy Family Rustenburgerstraat [1988] ECR 3655 paragraphs 17 and 20 and Case C-158/98 Coffeeshop‘Siberië’ [1999] ECR I-3971 paragraph 14). As narcotic drugs which are not distributed through such strictly controlled channels are prohibited from being released into the economic and commercial channels of the EU, a coffee-shop proprietor cannot rely on the freedoms of movement or the principle of non-discrimination, in so far as concerns the marketing of cannabis, to object to municipal rules such as those at issue in the main proceedings.

As for the marketing of non-alcoholic drinks is concerned, the Court held that it appears to constitute a catering activity characterized by an array of features and acts in which services predominate as opposed to the supply of the product itself (Case C-491/03 Hermann [2005] ECR I-2025, paragraph 27). Consequently, the free movement of goods aspect is entirely secondary to that of the freedom to provide services. As a result the Court examined the rules at issue in the main proceedings only in the light of the freedom to provide services (Case C-275/92 Schindler [1994] ECR I‑1039, paragraph 22; Case C-71/02 Karner [2004] ECR I-3025, paragraph 46; Case C-36/02 Omega [2004] ECR I-9609, paragraph 26; Case C‑452/04 Fidium Finanz [2006] ECR I-9521, paragraph 34; and Case C‑233/09 Dijkman and Dijkman-Laveleije [2010] ECR I-0000, paragraph 33).

The Court also held Article 12 EC (now Article 18 TFEU), which lays down a general prohibition of all discrimination on grounds of nationality, does not apply in this case as it applies independently only to situations governed by EU law for which the EC Treaty lays down no specific rules of non-discrimination and the principle of non-discrimination has been implemented, in the area of the freedom to provide services, by Article 49 EC (now Article 56 TFEU) (Case 305/87 Commission v Greece [1989] ECR 1461, paragraphs 12 and 13; Case C-443/06 Hollmann [2007] ECR I-8491, paragraph 28; and Case C‑269/07 Commission v Germany [2009] ECR I-7811, paragraph 98). Similarly, Article 18 EC (now Article 21 TFEU), which lays down generally the right for every citizen of the Union to move and reside freely within the territory of the member States, finds specific expression in the provisions guaranteeing the freedom to provide services (Case C-92/01 Stylianakis [2003] ECR I-1291, paragraph 18; Case C-76/05 Schwarz and Gootjes-Schwarz [2007] ECR I-6849, paragraph 34; and Case C-56/09 Zanotti [2010] ECR I-0000, paragraph 24). As citizens of the EU who do not reside in the Netherlands and wish to go into coffee-shops in the municipality of Maastricht to consume lawful goods there are to be regarded as ‘persons for whom’ services ‘are intended’ within the meaning of Article 49 EC, it is not necessary for the Court to rule on the interpretation of Article 18 EC.

The Court had then to deal with the second question posed by the referring national court, whether the rules on the freedom to provide services precluded the restriction of selling non-alcoholic beverages to non residents and whether such a restriction was justified on grounds of public policy.

The Court affirmed is consistent case law according to which the principle of equal treatment, of which Article 49 EC embodies a specific instance, prohibits not only overt discrimination by reason of nationality but also all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result (Case C-3/88 Commission v Italy [1989] ECR 4035, paragraph 8; Case C-388/01 Commission v Italy [2003] ECR I-721, paragraph 13; Case C‑28/04 Tod’s and Tod’s France [2005] ECR I-5781, paragraph 19; and Case C-147/03 Commission v Austria [2005] ECR I-5969, paragraph 41). Article 49 EC also precluded a measure which distinguished residents from non-residents, because it is liable to operate mainly to the detriment of nationals of other member States, since non-residents are in the majority of cases foreigners (Case C-224/97 Ciola [1999] ECR I‑2517, paragraph 14; Case C‑388/01 Commission v Italy, paragraph 14; Case C‑103/08 Gottwald [2009] ECR I-9117, paragraph 28; and Case C-73/08 Bressol and Others [2010] ECR I-0000, paragraph 45 - see our post about that case here).

The Court went on to examine the tricky issue whether such a restriction may be justified.

It held that the discriminatory rule was justified.

The Court accepted the finding of fact that the rules at issue in the main proceedings intend to put an end to the public nuisance caused by the large number of tourists wanting to purchase or consume cannabis in the coffee-shops in the municipality of Maastricht. According to the information provided by the Mayor of Maastricht at the hearing, the 14 coffee-shops in the municipality attract around 10 000 visitors per day and a little more than 3.9 million visitors per year, 70% of which are not resident in the Netherlands.

The Court also found that given the commitments entered into by the EU and its member Sates, there is no doubt that the objectives of combatting drug tourism constitute a legitimate interest which, in principle, justifies a restriction of the obligations imposed by EU law, even under a fundamental freedom such as the freedom to provide services. It also found that a prohibition on admitting non-residents to coffee-shops, such as that which is the subject-matter of the dispute in the main proceedings, constitutes a measure capable of substantially limiting drug tourism and, consequently, of reducing the problems it causes.

But there was the precedent of Joined Cases 115/81 and 116/81 Adoui and Cornuaille [1982] ECR 1665, concerning the right of residence or establishment of prostitutes. In that case, the Belgian authorities had adopted measures which were more repressive towards prostitutes from other member States working in Belgium than they had taken against the local ladies. The Court had held in that case that a member State cannot validly rely on grounds of public policy with regard to the behavior of a non-national inasmuch as it does not adopt repressive measures or other genuine and effective measures with respect to the same conduct on the part of its own nationals. The Court distinguished that case by pointing out that under international law and European Union law, a prohibition in all the Member States on marketing narcotic drugs, with the exception of strictly controlled trade for use for medical and scientific purposes. By contrast, prostitution, the behavior referred to in Adoui and Cornuaille, aside from trafficking in human beings, is tolerated or regulated in a number of member States (Case C-268/99 Jany and Others [2001] ECR I‑8615, paragraph 57). It cannot be held to be inconsistent for a member State to adopt appropriate measures to deal with a large influx of residents from other member States who wish to benefit from the marketing – tolerated in that member State – of products which are, by their very nature, prohibited in all member States from being offered for sale.

As regards the scope of rules such as those at issue in the main proceedings, the Court held that they apply only to establishments the main activity of which is the marketing of cannabis. They do not preclude a person who is not resident in the Netherlands from going into other catering establishments in Maastricht to consume non-alcoholic beverages and food. According to the Netherlands Government, there are more than 500 such places.

Finally, the Court accepted as a fact that other less restrictive measures such as a restriction on the number of coffee-shops or their opening hours, the implementation of a card system which allows customers access to them or even a reduction in the amount of cannabis per person which may be bought had proved insufficient and ineffective in the light of the objective pursued.

Is this the beginning of a trend of allowing member States to introduce measures discriminating against foreigners? Let us hope it is confined to reefers.

In the meantime, there is some confusion as to whether the "Easy Going" is actually shut down or not.

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Well, maybe there are reasons why this is restricted. I must say that the act is for the welfare of everybody. There are places also in other country wherein they restrict non residents to enter or use any establishment for the reason that they need safety and nonetheless monitor the spread of drug usage. This maybe a discriminative act yet we have to think only for the welfare of the majority. Thanks a lot for this enlightenment.

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Having a good name in terms of coffee and other meals, it is not appropriate to discriminate customers. This is a case that will definitely make the business loose its credibility. Customers satisfaction must be meet by the company. It is a must.

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