First Appeal Decisions on the Admissibility of Actions Based on the Duty of Vigilance

On June 18, 2024, the new chamber 5-12 of the Paris Court of Appeal handed down its first three rulings on the admissibility of duty of vigilance claims in cases involving TotalEnergies, EDF, and Vigie Groupe (formerly Suez). The decisions provide important clarifications on the conditions for admissibility of these actions, in particular on the interest in bringing the action, prior formal notice, pre-litigation dialogue, and the possibility of combining the action with the action for cessation of ecological damage.

CONTEXT

The duty of vigilance was introduced by a law of March 17, 2017,[1] which introduced Article L. 225-102-4 into the French Commercial Code. The latter requires French public limited companies employing at least 5,000 employees in France (or 10,000 employees abroad) to draw up and implement a due diligence plan aimed at “identifying risks and preventing serious violations of human rights and fundamental freedoms, the health and safety of individuals and the environment, resulting from the activities of the company and those of the companies it controls, as well as from the activities of subcontractors or suppliers with whom an established business relationship is maintained.”[2]

As this obligation is relatively recent, there have not yet been many disputes concerning vigilance plans, and most of the cases brought before the Paris Court of First Instance (Tribunal Judiciaire de Paris)[3] have been dismissed.

Such was the case, for example, with the action brought by six French and Ugandan NGOs against TotalEnergies in relation to the Tilenga oil project in Uganda. The judge dismissed the case on the grounds that the demands made in the 2018 formal notice were different from those set out in the 2021 summons, which concerned a vigilance plan updated by the oil company between 2019 and 2021.[4]

To our knowledge, only the action brought by the Fédération des syndicats solidaires, unitaires et démocratiques des activités postales et de télécommunications (SUD PTT) against La Poste has been declared admissible.[5] In a decision dated December 5, 2023, the Paris Court of First Instance ordered La Poste to supplement its vigilance plan to bring it more into line with legal requirements.[6]

It is against this backdrop that the new[7] chamber of Paris Court of Appeal (Cour d’appel de Paris) dedicated to “emerging litigation” (duty of vigilance and ecological liability) has handed down three long-awaited decisions on the admissibility of actions brought on the basis of the obligation to draw up a vigilance plan.

BRIEF DESCRIPTION OF THE CASES

The court had to rule in three separate cases:

• A lawsuit brought against TotalEnergies, accused of not taking sufficient measures to reduce greenhouse gas emissions.[8]
• An action targeting EDF, suspected of violating the rights of indigenous peoples in connection with a wind farm project in Mexico.[9]
• Vigie Groupe (formerly Suez) sued for contamination of a drinking water network in Chile.[10]

In all three cases, the plaintiffs had failed at first instance, their claims having been deemed inadmissible (i.e., without the merits being addressed).

While the inadmissibility of the claim was confirmed in the Vigie Groupe case, the actions brought against EDF and TotalEnergies were this time declared admissible and will give rise to a trial on the merits.

CLARIFICATION OF ADMISSIBILITY CONDITIONS FOR INJUNCTION PROCEEDINGS

The Paris Court of Appeal has clarified the conditions governing the admissibility of actions for injunctions, i.e. actions to enjoin the company liable for the obligation to draw up a vigilance plan to comply with its obligations, and thus, for example, to amend an incomplete plan.[11]

First, the Paris Court of Appeal clarified the formal requirements relating to the formal notice, which is a prerequisite for bringing an action under Article L. 225-102-4 of the French Commercial Code.

More specifically, the court has reverted to the judge-made principle of requiring that the demands set out in the summons be identical to those set out in the formal notice. From now on, the court simply requires the existence of a "sufficient link" between the grievances raised in the formal notice and those presented in the summons.[12]

In addition, the court specified that the formal notice and the summons need not refer to the same vigilance plan.[13] This was a stumbling block for plaintiffs, who were obliged to draft multiple formal notices in order to preserve their rights, as vigilance plans were constantly being amended.

Second, the Court of Appeal refused to introduce a mandatory phase of pre-litigation dialogue, contrary to the orders of the pre-trial judge of the Paris Court of First Instance, which had made the existence of an exchange prior to any legal action a condition of validity of the formal notice.

The court simply refers to the three-month period provided for in Article L. 225-102-4 of the French Commercial Code, which is designed to enable the company to bring its plan into line with the demands set out in the formal notice, if it deems this necessary.[14] The pre-litigation dialogue is no longer a requirement. The argument is explicit: although dialogue can contribute to the effectiveness of the formal notice, its absence cannot call into question the admissibility of the action, in strict application of the aforementioned text.

Third, the Paris Court of Appeal accepted the possibility of combining liability for failure to comply with the duty of vigilance with an action based on Article 1252 of the French Civil Code, concerning the cessation of ecological damage.

In doing so, the court condemned the reasoning of the pre-trial judge (juge de la mise en état), who had ruled out this combination on the grounds of a potential objective circumvention of the formal notice requirement.[15] From now on, it will be possible to simultaneously file a claim under Article L. 225-102-4 of the French Commercial Code (in respect of the duty of vigilance) and a claim for cessation of ecological damage, based on the aforementioned article.

Fourth, the Court of Appeal clarified the notions of “interest in bringing an action” (intérêt à agir) and “standing to defend” (qualité pour défendre).

With regard to the notion of “interest in bringing an action” (“intérêt à agir”), the court has framed the possibility, for local authorities, to bring an action, requiring proof of a “local interest specifically affecting their territory”, which goes beyond the mere “general public interest.”[16]

As for the notion of “standing to defend” (“qualité pour défendre”), the court specified that, in the context of a group of companies, only the parent company is bound by the obligation to set up a vigilance plan, thus excluding any possibility of engaging the liability of a subsidiary.[17]

WHAT’S NEXT?

Ultimately, with these three decisions of June 18, 2024, the Paris Court of Appeal has initiated a harmonization of case law on the admissibility of actions based on the duty of vigilance.

Undoubtedly, these decisions reinforce the idea of a new impetus for the duty of vigilance, strengthened on a European scale with the adoption of a new European Directive on the subject on April 24, 2024.[18]

On the merits, the actions brought against EDF and TotalEnergies, the outcome of which is awaited, should also be instructive in this recent area and will undoubtedly be meticulously analyzed both by companies subject to the duty of vigilance and by those wishing to use this duty to support their actions.

Law Clerk Kostia Malanyuk-Lelan contributed to this LawFlash.