German State of Baden-Württemberg Loses in Appeal

SEMA News—August 2011

German State of Baden-Württemberg Loses in Appeal

Court Cites EU Regulations That Provide Consumers the Right to Customize Their Vehicles

By Linda Spencer

 
The European Tuning Organization (ETO), comprised of national specialty-equipment associations from throughout Europe, has made enforcement of the mutual recognition laws a priority of the four-year-old organization. 
   

In a closely watched case, a German court has, for the second time in two years, sided with a consumer who sued for the right to install aftermarket carbon-fiber wheels on his motorcycle. The German state of Baden-Württemberg denied the consumer an operating license, with the following note in the appeal documents: “Upon retrofitting carbon fiber wheels, the motorcycle no longer conforms” and “the operating permit of the individual vehicle is forfeited pursuant to the German Road Traffic Admission Regulation….”

The enthusiast at the center of the case, who lives in the southern town of Ludwigsburg, had sued in court to force local government officials to renew his operating license, which had been withdrawn because of the presence of the aftermarket wheels. Agreeing that the consumer was wrongfully penalized, the administrative court of Stuttgart dismissed arguments, first in July 2009, and then most recently on May 31, 2011, refusing to hear the appeal by the southern German state of Baden-Württemberg. The court cited newly enhanced European Union (EU) mutual recognition regulations (EC) 764/2008 in its siding with the motorist. The regulations are designed to simplify cross-border trade, with the goal of building a long-elusive common market for the free flow of goods among its collective 500-million-plus people. The regulations, as approved by the European Parliament, limit the ability of the 27 EU countries from banning products already legally sold in one or more other European Union countries.

The 2009 regulation revisions are designed to especially address difficulties faced by manufacturers, such as Dymag, whose wheels are at the center of the court case. Dymag wheels were popular throughout Europe, having been used without problem in the United Kingdom and The Netherlands for a number of years and, according to the manufacturer’s website, having undergone extensive testing and meeting or exceeding key international standards. The courts ruled that Baden-Württemberg could not prove that the Dymag wheels are a safety concern, a prerequisite for the denial of products cross-border.

In fact, there was agreement on this point. Local government officials admitted that the denial wasn’t due to any known problems with the wheels. In court documents, Baden-Württemberg noted the denial and took the counter argument: How does the government know the wheels are safe? In the present case, no such current scientific investigations and assessments are available to prove they are not dangerous.

In other words, German government officials, as with officials in all EU countries, are to accept products imported from other EU countries even if they are manufactured to other than local requirements. In announcing its decision, the court noted that the local government did not have a justification in denying an operating license to the consumer, noting: “The long-lasting, unproblematic and accident-free use in Great Britain and the Netherlands in public road traffic and at international motorcycle racing makes such proof unlikely.”

The Roads/Use Are Different in Germany

In its appeal, local state officials protested the court’s decision, noting: “The Administrative Court has referred to road uses in the United Kingdom and The Netherlands. Apart from the fact that there are no official field reports from local authorities of the respective countries available for evaluation, it should not be forgotten that the differences in road traffic conditions between individual member states must also be taken into consideration. A product that can be used in one particular member state without risk because of the conditions of use prevailing in that country cannot necessarily be used without limitations in another member state where conditions are different. To give an example, if the authorities in charge in the United Kingdom, in consideration of the local conditions of use (maximum speed–112 km/h), conclude that motorcycles equipped with carbon wheels do not pose a safety risk, this does not mean that a motorcycle fitted with carbon wheels does not present a risk for the rider and other road users in Germany where the speed limit on highways is much higher (maximum speed for the relevant motorcycles is 281 km/h). At increased speeds, heat buildup in the tires increases significantly and persistently. While conventional wheels can dissipate the generated heat and expand when exposed to heat, this is not the case with carbon wheels. Whether these influences are without consequences for the wheel-and-tire combination is unknown.”

They further protested: “An unverifiable statement about a supposedly accident-free use of carbon-wheel-equipped motorcycles in the United Kingdom and The Netherlands, thus, does not warrant any conclusions applicable to the conditions of use in Germany.”

Notwithstanding the arguments brought by the local German officials, the court did not agree that German roads and use of motor vehicles are so unique as to be deserving of an exemption from European laws and regulations.

   
   

“This court case is important. The wheels were clearly safe, having been used in the United Kingdom and Netherlands for many years,” said ETO President Renato Gallo. “Additional testing or the outright denial of specialty products will do nothing to improve safety but will deny German consumers access to safe, popular products enjoyed worldwide. The free flow of goods throughout Europe might indeed become a reality once local governments understand that they don’t have the right to impose technical barriers without a proven need for such limitations.” Added Andrea Pinkerton, the association’s general secretary, “The recognition and ruling by the German court in respect of European legislation and free inner-community trade is highly welcomed by the ETO and sends out a positive signal for inner-community trade. The German court ruling can be used as a reference case to remove burdensome treatment in other European countries. This action is clearly a step in the right direction towards a functioning free inner-community trade within Europe.”

The industry welcomes the court’s decision, as the denial of use has been the largest problem identified by the industry. Since the enhanced regulations were implemented, government national barriers have become much more subtle. Rather than an outright ban of the sale or marketing of specialty products already legally sold in one country, which are clearly spelled out in the regulation, countries have taken to harassing consumers who purchase specialty products legally sold in local shops or over the Internet. Although such actions do not result in direct prohibition of sales of the specialty products in question, they indirectly hinder the use and reduce the potential sale opportunities of such specialty products through not allowing the vehicles modified with those products to be operated. In effect, that could lead to gradual withdrawal of those products from the market, constituting a violation of the mutual recognition principle.

The pro-industry ruling is expected to have the largest impact on countries that have the greatest government oversight over the industry, such as Germany and Spain, which require much more extensive testing and, in contrast to U.S. law, ban all customization unless it’s specifically allowed. Indeed, Baden-Württemberg noted in its court documents the significance of the finding: “If this opinion were to be followed…manufacturers of aftermarket parts could produce any accessories without providing proof of their road safety and, in the event of an approval being denied by the authorities, appeal by stating that the authority had not proven that their accessory was, in fact, hazardous.”

For more information on selling into the European market, contact Linda Spencer at lindas@sema.org.

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