Paper envelopes: the SC dismisses two procedural infringement and cassation appeals

As we explained in a previous post, the now extinct Spanish Competition Commission (now the Spanish Markets and Competition Commission, or “CNMC,” in its Spanish acronym) imposed a €16 million fine on the main paper envelope manufacturing companies because of their participation in a price fixing and customer sharing cartel in the national envelope manufacturing market between 1977 and 2010.

In the civil area, in 2018, the Barcelona Commercial Court 7 partially upheld the claims that Bankoa and Manos Unidas had made against the envelope manufacturing companies for the damage their infringement of competition law had caused.

Subsequently, the sanctioned companies filed appeals, which the Barcelona Provincial Court partially upheld in January 2020. The Court of Appeals also considered the existence of overpricing to be fully accredited, and it ordered that compensation be paid. As regards its quantification, the Appeals Chamber started from the conclusions set out in the expert reports that the plaintiffs had provided. However, it used “an estimation criterion that differed from the one established in the parties’ expert reports,” by which it established a linear 20% overcharge during the whole period of the cartel.

The sanctioned companies filed extraordinary appeals for procedural infringement and cassation against the Barcelona Provincial Court’s sentences, which the Supreme Court recently rejected through orders dated July 6, 2022.

In the first ground articulated in the appeals, the appellants denounced the inappropriateness of extending the ex re ipsa doctrine (under which the damage would be inherent to the tort committed) to actions for compensation for damage caused by infringing competition law, as case law establishes that the plaintiff must prove the existence and quantification of the damage allegedly suffered.

However, after analysing the second instance judgments, the Supreme Court concluded that (i) the Barcelona Provincial Court fully accredited its consideration that the damage was caused by the infringement; and (ii) it did not, “at any time,” resort to the ex re ipsa doctrine.

In their second ground of appeal, the sanctioned companies alleged that the Court of Appeals had quantified the damage according to the EU Damages Directive, even though the provisions of that directive (which were transposed into Spanish law in 2017) cannot be applied retroactively.

However, the Supreme Court also rejected this ground of cassation because (i) the Barcelona Provincial Court had quantified the overcharge considering the expert reports on file; and (ii) it did not use, “at any time,” the provisions of the EU Damages Directive or its Spanish law equivalent; rather, it merely cited them to explain the legal situation after the facts.

Finally, the Supreme Court rejected the sanctioned companies’ third and fourth grounds of appeal because, in violation of the Spanish Civil Procedure Act, the appellants did not cite the legal precepts they considered to have been infringed.

The inadmissibility of the cassation appeal entails the inadmissibility of the extraordinary appeal for procedural infringement. Therefore, the Supreme Court has agreed to (i) reject the extraordinary appeals for breach of procedure and cassation that the envelope manufacturers had filed in the proceedings that Bankoa and Manos Unidas had started, and (ii) declare the Barcelona Provincial Court’s decision final.